Store Brands: First, could you describe Placer.ai's methodology.
Ethan Chernofsky: There are 30 million devices in our panel. We then use machine learning and AI algorithms on top of that to make estimations of visits to retail locations across the country. It is estimates, so there is always a margin for error with what we’re looking at, and we’re looking at visits… the amount of peak time a location, the amount of visitors to [a location]. It’s not like sales data or something like that.
SB: Based on Placer.ai's foot traffic data, which retailers were among the most popular in 2022?
EC: Overall, grocery was a bigger winner than we give it credit for as a category. The context here really matters, because if you think of where we were in 2019, there was this feeling that restaurants were grabbing more and more share, grocers were kind of losing some of their value or not innovating enough. I think what we actually saw was that grocers innovated incredibly quickly, there’s huge demand there, and some of these shifts are likely to have long-lasting value.
We can look at visits for example compared to a year ago or compared to three years ago. Compared to a year ago they’re down slightly, largely because of group size. When we compare to pre-pandemic, it [grocery store visits] went way up. I think that speaks to a segment that filled a real void during the unique nature of the pandemic and the year that followed, and that now is benefitting from that extended boost that it’s gotten during that period.
SB: Several discount retailers like Aldi and Lidl, as well as dollar stores, have benefited during the current inflationary period. Does preference between discount retailers change over time?
EC: I think a lot of it is location and proximity, and a lot of it is people finding brands that they love. Grocery Outlet is amazing and they’re doing very, very well. The same is true for Aldi or Lidl or others. What makes that process really interesting is that they’re very national in how they do things, so they can kind of scale out to where there is demand. I think they’ve proven that they’re able to grow total visits but also unique, per store location visits, which is really important.