FORT WORTH—As has been widely reported, Pier 1 is facing the endof its road. Foot traffic analytics firm, Placer.ai, recentlyanalyzed pre-COVID performance and post-pandemic implications todetermine Pier 1's closure beneficiaries.

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When attempting to identify the brands with the highestlikelihood to gain from these closings, one effective mechanism isto look at cross-shopping patterns. To do so, Placer.ai analyzedcross-shopping percentages between January through May in 2018,2019 and 2020 to create a rough idea of which brands may be bestpositioned to take in Pier 1's former customer base.

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Pier 1 has a significantly higher proportion of visitors comingfrom another retail location before visiting and a higherpercentage of visits going to another retailer after. Thesecross-shopping patterns can be especially important for this typeof brand, which shows a strong element of being part of amulti-trip journey.

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Averaging out data from those periods in 2019 and 2020 showsthat 30% of Pier 1 visitors are coming from another retailerdirectly before visiting a Pier 1 while more than 33% visit oneimmediately after. So whether this is a unique particularity ofPier 1 or a wider statement about those other stores, the closingof these stores has some significance for competitors.

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The obvious starting point is Walmart and Target, though thesenumbers are clearly buoyed by the fact that many people shop ateither Walmart or Target during a five-month period. However, itdoes further indicate the power and somewhat endless opportunitiesof these brands, says Placer.ai.

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The next group is dominated by the kings of the DIY hill in HomeDepot and Lowe's which both have more than 40% cross-shopping withPier 1. Though the ready-made element of Pier 1 isn't the corefocus for these brands, there is still something to be said for apotential uptick in traffic.

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The next tier may be the most interesting. Home Goods and Bed,Bath & Beyond have very high levels of cross shopping with theaverage actually weighed down by pandemic closures and shoppingpatterns in 2020. As a result, both brands have a powerfulopportunity to leverage these closures by targeting Pier 1audiences to attempt to fill the gap Pier 1 will leave, accordingto the report.

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And the same holds true for brands with lower cross shoppingthan the national giants, but still relatively high levels ofoverlap. In other words, there are opportunities that can beleveraged. On a local level, looking at the True Trade Area for anyPier 1 should create ready-made targeting tool through a variety ofchannels to help bring these customers into the mix for a Pier 1replacement, says the Placer.ai report.

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The point is further reinforced when looking at how closely theaudiences resemble each other. Analyzing household incomebreakdowns shows the tremendous similarity in audiences betweenseveral of these brands and Pier 1. The result is an opportunityfor those brands that move fast enough to take it.

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"Pier 1′s struggles don't remove the fact that they did have aloyal and fervent customer base, and that this audience is going tolook to purchase these products elsewhere," Ethan Chernofsky, vicepresident of marketing at Placer.ai, tells GlobeSt.com. "Obviously,the overlap with a Target or Walmart is highest, but there is asignificant opportunity for a multitude of players including Bed,Bath & Beyond, Home Goods and others. The real question is whois going to take advantage of the vacuum. From understandingexactly who the Pier 1 audience is on a store-by-store basis toexamining how to best capitalize on this closure, brands in thisspace are being presented with a chance to drive real value byfilling the gap for these consumers."

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.