Millennials are a thrifty bunch, Foursquare has discovered. It recently conducted a study to see what happens to the retail ecosystem when a Kmart or Macy’s closes. The report found that millennials tend to be opportunists: They’re not the typical shopper at these stores, but they will show up in greater numbers for closeout sales. In fact, competing retailers in the area—like Kohl’s and Target—end up losing business because shoppers defect for these sales.
But after a store is closed, a good chunk of customers tend to be loyal. Foursquare found that after a Kmart location closed, remaining stores saw a 39% surge in visit share from Typical Shoppers, while the Macy’s stores that remained open saw a 36% boost in share from their own group of loyalists. Eventually, though, competing retailers geographically close to the closed store began to successfully lure their customers. T.J. Maxx saw a 47% gain in market share following these closures, while Walmart saw an 8% gain.
Macy’s and Kmart have been plagued by store closures, and following a lackluster holiday, the companies are expected to shutter a combined 176 locations in the next year.
[Photo: Flickr user Nicholas Eckhart]