Meet 2024’s consumer

How has the retail landscape shifted over the past five years and what characterizes consumers in 2024?

Placer.ai's new report, titled "Meeting 2024's Consumer" answers these questions and more.

The company noted that consumer preferences have shifted over the past five years. COVID-19 and inflation impacted shopping habits and behaviors across the retail space—and while some of the changes were short-lived, others appear to have more staying power. Now, with memories of the lockdowns fading, and as the inflation that plagued much of 2022 and 2023 wanes (hopefully), placer.ai analyzed location intelligence data to understand what the retail and dining landscape looks like today. 

The new report leverages historical and current foot traffic data and trade area analysis to better understand the current retail and dining landscape and reveal consumer trends likely to shape 2024 and beyond. Which segments have benefited most from the shifts of the past five years? How are legacy brands staying on top of current shopping and dining trends? Where are people shopping and dining in 2024? And what characterizes the modern consumer?

[Read more: Generation next: Capturing millennial, Gen Z shoppers]

One of the major retail stories of the past five years has been the rise of discount and dollar stores. Category leaders such as Dollar General and Dollar Tree expanded significantly before the pandemic, which helped these essential retailers attract large numbers of customers during the initial months of lockdowns. 

During this period, many discount and dollar stores invested in more than just their store count—several chains also expanded their grocery selection, allowing these companies to compete more directly for grocery and superstore shoppers. As discount and dollar stores continued growing their store fleets—and as the pandemic gave way to inflation concerns—shoppers looking for more affordable consumables options gravitated to this segment. 

Location intelligence shows that the rapidly opening stores and stocking them with fresh groceries is working—since 2019, discount and dollar stores have slowly but steadily grown their visit share relative to the Grocery and Superstore sectors.

In 2019, discount and dollar retailers captured 15.1% of the visit share between the three categories analyzed. This number grew by a full percentage point between 2019 and 2020 and the trend has continued, with the category enjoying 16.6% of the relative visit share in 2023. Meanwhile, Superstores’ relative visit share decreased during the same period, dropping from 41.7% in 2019 to 40.0% in 2023, while the relative visit share of Grocery Stores remained mostly stable. 

Still, consumers are not giving up their regular grocery or superstore run quite yet—over 80% of combined visits to grocery stores, superstores, and discount and dollar Store sectors still go to grocery stores and superstores. But the data does indicate that some shoppers are likely choosing to shop for groceries and other consumables at discount and dollar stores. And CPG companies and category managers looking to reach customers where they shop may want to consider adding discount and dollar stores to their distribution channels. 

[Read more: Forecasting the future]

The key question that remains is how much of the gained visit share can the discount and dollar leaders maintain as the economic environment improves. This metric will be the strongest sign of whether the short-term gains made within a favorable context drove long-term value.

Superstore Segment Shifts

Superstores’ visit share may be shrinking somewhat in the face of discount and dollar stores’ growth. But diving into the superstore leaders reveals that these macro-shifts are having a different impact on the various sub-categories within the wider Superstore segment. 

Walmart remains the undisputed superstore leader thanks to its 61.8% share of overall visits to Walmart, Target, Costco, Sam’s Club and BJ’s in 2023. But 61.8% is still lower than the 66.3% relative visits share that the superstore behemoth enjoyed in 2019. Meanwhile, Target grew its relative visit share from 17.3% in 2019 to 19.3% in 2023, while the combined visit share of the three membership club brands increased from 16.5% in 2019 to 18.9% in the same period.

Some of the shift in visit share can be attributed to Walmart closing several locations while Target, Costco Sam's Club and BJ's expanded their fleet—but other factors are likely at play. 

Costco and Target attract the most affluent clientele of the five chains analyzed, which could explain why these chains have seen significant growth at a time when many consumers are operating with tighter budgets. The success of these companies also suggests that there are enough consumers willing to spend beyond the basics—as shown with Target’s Stanley Cup success (more on that below)—to support a varied product selection that includes higher-priced options. It also speaks to a high upside on a per customer basis for chains that have proven effective at providing higher-end products alongside those with a value orientation. This speaks to a unique capacity to effectively address “the middle”—an audience that is defined neither solely by value-seeking nor by high-end product proclivities.

Sam's Club and BJ’s also give shoppers an opportunity to save by buying in bulk and cutting down on shopping trips—and related gas expenses—which may also have contributed to their success. The increase in the relative visit share of wholesale clubs indicates that today’s consumer might react positively to more options for bulk purchases in non-warehouse club chains as well.

The beginning of 2024 was marked by an Arctic blast and plunging temperatures. Consumers, unsurprisingly, hunkered down at home—and foot traffic to many retail categories took a dip. But the declines were short-lived, and by the fourth week of January 2024 foot traffic had rebounded across major categories. 

Still, zooming into weekly visit performance for key retail and dining categories for the first eight weeks of the year reveals that the cold did not impact all segments equally—and the subsequent resurgence boosted some sectors more than others. 

Discount and dollar stores had the strongest start to 2024, with YoY visits up almost every week since the start of the year, and the category showing even more substantial growth once the cold spell subsided. The grocery category also succeeded in exceeding 2023 weekly visit levels almost every week, although its visit increases were more subdued than those in the Discount & Dollar Store segment. 

Superstore and C-Store experienced relatively muted YoY declines in early January and saw significant weekly visit growth as Q1 progressed, with C-Stores outperforming superstores by late January 2024. And dining—which suffered a particularly heavy blow in early 2024—also rebounded with gusto, offering another strong indicator of the resilience of today’s consumer.

Perhaps the most significant sign that today’s consumers are still willing to spend money on non-essentials is the recent success of the Starbucks X Stanley “Pink Cup”. The cup has caused such a sensation that re-sellers ask for up to six times the original $50 price—and for those unwilling to shell out the big bucks on the cup, enterprising cup owners offer photo shoots with the product for $5. 

The Starbucks X Stanley “Pink Cup” was released on Jan. 3, and could only be bought at Starbucks kiosks located inside a Target. Viral videos of the release circulated on social media, showing eager crowds lining up early in the morning for the chance to be first to grab their cup. Location intelligence reveals that these early morning visits were significant enough to change Target’s typical hourly visit pattern.

Foot traffic between 7:00 a.m. and 9:00 a.m. on Jan. 3 accounted for 4.4% of daily visits, compared to 2.6% of daily visits occurring during that time slot on a typical Wednesday in January or February. And demand for the pink Stanley cup drove a spike in daily visits as well—overall daily visits to Target on January 3rd were 18.7% higher than the average Wednesday visits in January and February 2024.

The visit trends to Target on Pink Cup Day are particularly impressive given the freezing weather in some regions of the country and because consumers were coming off the holiday shopping season. And the success of the cup shows that 2024’s shopper is willing to show up— especially for a viral product. Creating buzzy marketing campaigns, then, may be the key to driving retail success. 

The retail changes of the past few years have left their mark on how people shop, eat and spend. And keeping ahead of these changes allows companies and product managers to ensure they can tailor their offerings—whether product selection or marketing campaigns—to the right audience. 

Key Takeaways:

Discount and dollar stores are gaining market share over superstores. Customers are increasingly seeking out value, and discount and dollar stores are reaping the benefits. Although visits to Superstores and Grocery Stores still significantly outnumber discount and dollar store visits, the value-focused category is seeing its relative visit share rise, perhaps thanks to its recent emphasis on affordable grocery offerings. 

Membership clubs are growing in popularity. Within the superstore segment, membership clubs like Costco saw an uptick in visit share, a reminder that the space is highly competitive—and that customers are looking for more bang for their buck. 

C-Stores are becoming dining destinations—and gaining in visit shares. Convenience stores are emerging as a bona fide dining destination. As C-Stores continue to invest in their food offerings, they are seeing their relative visit share grow—indicating a strong demand for food that is both fresh and convenient. 

QSR chains that cater to larger households are seeing visit growth. Though the dining space has experienced some ups and downs in 2024, some chains thrived—and their appeal among larger households may be why. 

Mid-afternoon is emerging as a popular time for steakhouse chains. Texas Roadhouse, LongHorn Steakhouse, and Outback Steakhouse all saw their share of mid-afternoon visits grow between 2019 and 2023. This newfound interest in dining earlier—or having lunch later—may provide new opportunities for merchandising and for restaurant operators to gear product selection towards this cohort.

Viral products bring in the customers. Stanley Cups are having a moment, and customers eager to get their hands on a tumbler are helping boost traffic at stores that stock the cup. This can serve as a reminder of just how powerful viral marketing is—and how receptive today’s customers are to the product du jour.