Pier 1 Closures - Who Stands to Gain?

Pier 1 is set to shutter nearly half of its offline footprint in 2020.  While this isn’t great news for the brand, it could be good news for surrounding stores that have the potential to gain significant foot traffic from these closures. 

We analyzed four different states, California, Florida, New York and Pennsylvania, to see which stores stand to benefit the most.  To do this, we analyzed Cross-Shopping patterns - how many visitors overlapped with both stores over a given period of time. Some studies have used proximity as the primary indicator, but we believe location data provides a much more in-depth perspective. While the patterns may already be influenced by closures that happened in 2019, they still provide a powerful indicator of who stands to gain most.

Let’s take a closer look to see what the ultimate impact could be. 

Biggest Beneficiaries 

When we look at Florida and analyze the period from June 2019 through December 2019, we see that 10.6% of Pier 1 visitors also visited a Target on the same day.  It’s important to note that this is the percentage of Pier 1 visitors that also went to Target. Obviously, Target, like Walmart, benefits from having a much wider stock thereby increasing the likelihood of cross-shopping. However, considering both brands stock goods that one would find at Pier 1, the patterns point to a powerful opportunity. HomeGoods is also well-positioned to receive value from the closures.

In California, Target and HomeGoods again see a huge potential gain.  9.9% of Pier 1 customers also visited Target on the same day and about 7.6% visited a HomeGoods. 

Results didn’t vary much when we looked at New York and Pennsylvania.  Target saw 8.3% and 9.2% Cross-Shopping in those states respectively, while HomeGoods saw 7.4% and 7.3%. 

Wild Cards

Yet, the wild cards are almost as interesting as those most likely to see short term gains. Bed Bath & Beyond, Home Depot and Lowe’s are all positioned to see elements of their business enjoy a bump. However, none provide a direct competitor to Pier 1, and will therefore likely only see a fraction of new traffic.

Which turns our attention to Walmart. With massive stores, huge distribution and the ability to quickly fill in stock, there may be a huge opportunity for the retail giant. This would obviously require a fairly significant shift in how the brand is perceived by this new audience, alongside merchandising challenges. However, with a retailer that has proven both innovative and fast-moving, it remains one of the more interesting players to watch., 

What percentage of these shoppers will continue to shop at HomeGoods or Target with Pier 1 out of the picture?  

Check back in with us at the Placer.ai blog to find out!