Imagine you're a T.J. Maxx analyst, and in every business publication, you read about store closures, defection to e-commerce and the struggle of the American retailer to survive. Many are panicking, and yet, your business feels stable. Since the 1990s, T.J. Maxx has had consecutive years of comparable-store sales increases. So you look around and wonder: is my confidence warranted? What am I missing? How is our market share trending against our core competitors, and in this challenging market, what can I do to understand and hold on to our most loyal shoppers?
Today, we're unveiling Foursquare Analytics, a clean, simple dashboard that puts the power of our proven location intelligence in the hands of brands.
Foursquare Analytics allows brick-and-mortar retailers and restaurant chains to understand how their own company and an entire category are performing based on actual, measurable, real-world visits — and much more quickly than any option out there. It's a dashboard for insights on chain-level foot-traffic performance that can be easily compared to a competitive set and to the broader industry. It provides unprecedented metrics that measure loyalty, reveal demographic insights, and uncover sources of acquisition and loss. It allows analysts to have a precise understanding of changing store visit patterns and share of visits from a competitive set. Like every product within the Foursquare suite, Foursquare Analytics is powered by our industry-leading location intelligence.
I've said this before: Oftentimes a company sets out to solve one particular problem and builds technology to do it, and then later realizes that the solution has much wider applicability. That's what happened here. We built our location tech so we could provide timely recommendations to Foursquare City Guide users about the best places to go, and then with passive location detection, we could serve up tips based on their journey. We then realized that being able to recognize when phones walk in and out of 93 million public places worldwide created an incredible data set for aggregate and anonymous analytics. It turns out, this capability can solve many business problems outside of our own.
Starting today, customer insights pros and shopper analysts who drive innovation at data-driven retailers and restaurant companies can have their own line of sight into real-world trends.
Our roster of Foursquare Analytics beta partners is a who's who of industry-leading restaurant chains from Taco Bell to TGI Fridays and also includes retailers H&M and Lowe's as well as luxury lifestyle brand Equinox. Each company recognizes the power of foot traffic data (92% of commerce still happens in the real world), and the common thread among early partners is that they critically understand how foot traffic patterns impact their business results. It's another key input in their marketing matrix.
“TGI Fridays is focused on evolving along with our guests to continue giving them the fun and carefree experience they've come to expect from our restaurants. The Foursquare Analytics dashboard allows us to react faster to category trends and get a much deeper understanding of our guests, their preferences and behaviors outside of Fridays." — Sherif Mityas, Strategy and Brand Initiatives, TGI Fridays
Foursquare Analytics: Better data, deeper insights
Built on top of Foursquare's industry-leading location technology, which includes an always-updating map of 93M locations worldwide, Foursquare Analytics accurately measures visits to thousands of retail brands each month. This complements a company's existing marketing cloud — all without the need for any in-store hardware or the necessity of setting up geofences. It is an improvement on available solutions: retailers no longer have to rely on consumer recall-based surveys with very small sample sizes or insights that arrive 1–3 months after a reporting period.
Watch the Foursquare Analytics video here.
So, how does it work?
To understand foot traffic patterns to millions of brick-and-mortar places around the country (shops, restaurants, bars, airports, and the like), we rely on our world-class Places database — which powers over 100K mobile apps including Snapchat, Twitter, and Apple — as well as aggregated and anonymized in-store visit data from our mobile panel who have opted in to always-on location sharing. Our foot traffic data then undergoes a rigorous data normalization process to ensure it accurately reflects the U.S. population.
Now, let's get back to our T.J. Maxx scenario…
As we reported last month, the closures of hundreds of Macy's and Sears stores will have a lasting impact on the American retail landscape. One chain's loss isn't always another's gain, but Foursquare Analytics reveals that in this case, T.J. Maxx is not only surviving, but thriving. And Foursquare Analytics helps a T.J. Maxx analyst understand why.
[Note: T.J. Maxx is not a Foursquare Analytics client. We went in search of a retailer that was bucking industry trends, and T.J. Maxx is a clear outlier.]
So, who shops T.J. Maxx? What can we learn about them?
T.J. Maxx shoppers are passionate consumers. They're more likely than the average American to visit department stores, accessories shops and clothing stores — stops at T.J. Maxx are often preceded or followed by visits to other retailers. T.J. Maxx shoppers love finding designer items at low prices (Nordstrom Rack and DSW are also popular with this group).
Perhaps more importantly, they're high frequency shoppers. Five percent of customers visit T.J. Maxx nearly every other week, and 80% of T.J. Maxx shoppers shopped at the retailer at least twice in the past 12 months. Last month, more than 40% of T.J. Maxx foot traffic came from high frequency T.J. Maxx shoppers (up from ~30% a year ago). These customers are especially valuable to the TJX portfolio, as they also dramatically over-index at sister retailers HomeGoods and Marshall's. It's in TJX's best interest to hold on to this segment with thoughtful merchandising, promotions and targeted advertising campaigns.
Where are the areas of opportunity?
T.J. Maxx has a robust customer base spread across Millennials, Gen X and Boomers. The chain has historically been particularly strong with Boomers but recent growth has been driven by younger generations. Meanwhile, Target has taken some of the Boomer market share from T.J. Maxx. If Target is able to continue its conquest of T.J. Maxx's loyal, high-frequency shoppers, it'll have an outsize impact.
Though T.J. Maxx is especially strong with loyal shoppers, the retailer can accelerate growth by bringing in new customers. Market penetration among the broader category — comprised of department stores, outlet stores and other comparable retailers — hovers below 15%. Converting a fraction of new customers could be hugely valuable to T.J. Maxx, particularly if these new consumers evolve into medium- or high-frequency shoppers.
Lastly, using city filters and category comparisons in the Foursquare Analytics dashboard, we notice that in Los Angeles, Target is gaining category visit share where T.J. Maxx and Kohl's are both lagging. As our data shows that Los Angeles is the biggest market for the category overall, there is tremendous growth potential for T.J. Maxx, perhaps with a combination of improved product assortment and regional campaigns.
If this sounds enticing to you, you're not the only one.
Business intelligence pros, industry analysts, even the media can't get enough of our robust foot-traffic analytics capabilities. Just last month, we took home Fast Company's Most Innovative Companies in Data Science award, in addition to other recent accolades. But our goal here at Foursquare isn't to take home the honors — though that does feel great and the team is thrilled — it's to create new and innovative opportunities for leading companies to leverage location intelligence in their business plans and marketing clouds.
Three weeks ago, we took a big step forward when we launched Pilgrim SDK — our “superpower" — and opened up location awareness to app developers and brands so they can implement it in their own apps and products. Our vision and plan is to continue the rate of innovation and further showcase how, in the future, location intelligence will be a central tenant of every engaging mobile experience, smart app, and strategic business decision in retail, QSR, health, travel, finance and beyond.
For more on Foursquare Analytics, visit enterprise.foursquare.com/analytics. Soon we'll be adding new features such as advanced filtering and the ability to drill down into foot traffic by week. Reach out and we'll be in touch with details.
T.J. Maxx case study methodology: The Foursquare Analytics dashboard analyzes anonymized and aggregated foot traffic trends to brick-and-mortar retailers, restaurant chains, airports, hotels and millions of other venues. Our analysis looks at explicit and implicit visit data collected via Pilgrim, Foursquare's proprietary location awareness technology, built on our understanding of 93M global venues and based on a panel of U.S. users who have opted in to always-on location sharing. The T.J. Maxx case study reviewed shopping patterns of people who visited a T.J. Maxx as well as analyzed market patterns of a broader retail category that includes selected department stores and off-price retailers in the past 12 months.