Coresight Research

Data scientists at location intelligence and consumer app provider Foursquare analyzed the foot traffic of a statistically representative portion of its U.S. users to build a forecast for this year’s Black Friday. As a result, Foursquare is predicting a 3.5 percent decline in foot traffic for Black Friday, which the company describes as an improvement from the declines seen in prior years of double-digit declines.

The researchers also expect dollar stores and “big box” retailers to excel this year with discount chains also performing well. For the department store segment, Foursquare predicts a year-over-year “lift in foot traffic” at Dillard’s, Macy’s, Marshalls, Lord & Taylor, Neiman Marcus and Saks Fifth Avenue.

“All six of these brands have seen stronger foot traffic patterns than their competitors in the past two months and should anticipate strong year-over-year performance,” the researchers said in their report today.

Foursquare’s data analysis echoes what other companies and retailers have been noting: Black Friday isn’t as big as it used to be — due in part to changes in consumer behavior, which includes growth of online shopping. “In 2015, Black Friday saw significant decrease in foot traffic compared to the year before; instead of wildly peaking on Black Friday, the shopping season is flattening out a bit, and other days later in the season like Super Saturday are rising in popularity,” Foursquare researchers said in their report. “In 2014, Black Friday was the third most popular shopping day of the year. In 2015, it ranked fifth.”

The company’s analysis included looking at traffic data from September 1 to October 31, “to assess what the holiday season might look like for 2016.” As a result, the 2016 trend line “reveals that this year, retailers have not suffered the same losses leading up to the holidays.”

Foursquare said that higher real wages is one factor for the expected improvement this year. But not all retailers will see the same lifts. “In 2015, big-box stores experienced a relatively minor year-over-year dip in foot traffic compared to retail overall, and this year, the category is seeing foot traffic increases,” Foursquare said. “Looking ahead to Black Friday, we expect this category to continue outpacing retail in general and to see an increase of over 5 percent year-over-year.”

Meanwhile, discount stores, to include dollar stores, “are gaining in foot traffic compared to last year. Historically, discount stores haven’t seen a huge Black Friday boost, but they do gain momentum later on in the season.” In this segment, Foursquare is betting on Big Lots and Dollar Tree to see the biggest spikes in traffic.