Working Paper: NBER ID: w27042
Authors: Avi Goldfarb; Catherine Tucker
Abstract: This paper seeks to answer the simple question of what category of retail outlets generates the most physical interactions in the regular course of life. In this way, we aim to bring a marketing perspective to discussions about which businesses may be most risky from the standpoint of spreading contagious disease. We use detailed data from people's mobile devices prior to the implementation of social distancing measures in the United States. With this data, we examine a number of potential indicators of risk of contagion: The absolute number of visits and visitors, how many of the visits are generated by the same people, the median average distance traveled by the visitor to the retailer, and the number of customers from Canada and Mexico. We find that retailers with a single outlet tend to attract relatively few visitors, fewer one-off visitors, and have fewer international customers. For retailers that have multiple stores the patterns are non-linear. Retailers that have such a large number of stores that they are ubiquitous, tend to exhibit fewer visits and visitors and attract customers from a smaller distance. However, retailers that have a large enough footprint to be well known, but not large enough to be ubiquitous tend to attract a large number of visitors who make one-off visits, travel a long distance, and are disproportionately international.
Keywords: COVID-19; Retail; Physical Interactions; Contagion Risk; Marketing Analytics
JEL Codes: M38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| number of retail outlets (L81) | number of visits (Y10) |
| number of retail outlets (L81) | number of visitors (Z30) |
| large number of stores (over 5,000) (L81) | number of visits (Y10) |
| large number of stores (over 5,000) (L81) | number of visitors (Z30) |
| mid-sized brands (100-1,000 outlets) (L68) | number of visits (Y10) |
| mid-sized brands (100-1,000 outlets) (L68) | number of visitors (Z30) |
| single outlet retailers (L81) | number of visits (Y10) |
| single outlet retailers (L81) | number of visitors (Z30) |