DEFINITION of 'Foot Traffic'

Foot traffic is the presence and movement of people walking around in a particular space. It is important to many types of businesses, particularly retail establishments, as higher foot traffic can lead to higher sales. Landlords also care about the volume of foot traffic because their own fortunes are tied to the success of retail tenants.

BREAKING DOWN 'Foot Traffic'

Before a business even decides to set up shop in an area, it will gather research on the amount of foot traffic during different segments of the day. If it's a mom-and-pop business, maybe the owner will sit in a chair with a pencil and notebook and count throughout the day the number of people walking by a particular spot. If it's a larger business that owns a chain and is interested in the area, it will contract out the work, if it chooses to do physical counts, or hire a consultant to conduct a survey and analysis of foot traffic patterns on weekdays and the weekends at different times of the year. Street-level retail establishments, naturally, depend heavily on foot traffic, but businesses on a second or third floor of a building find foot traffic beneficial to get noticed. Offices for small law firms, financial advisers, accountants and other professionals are common just above street level.

The area with higher amounts of foot traffic tends to command higher rents. Any given city or suburban town has a popular area where foot traffic is bustling. These are desirable spots for shops and restaurants, but once they have set up operations there, they have to compete with one another for that foot traffic. Large numbers of people will not guarantee profitability for these retailers and restaurateurs. First, as previously mentioned, rent will be at a premium, and second, the competition to attract customers will be fierce.

Foot traffic is also an important consideration in urban planning. If an area is or is expected to become popular with pedestrians, planners will want to ensure proper aesthetic design and placement of buildings along with safety factors to protect pedestrians from vehicles. Street trees, crosswalks and extended curbs are integrated into space planning. Urban planners can play a role in determining whether an area will be popular with shoppers.

Foot Traffic Trends

Foot traffic at shopping malls and strip malls are on the decline in the U.S., leading to a wave of mall and store closings, particularly in secondary and tertiary locations. The cause, according to widespread belief, is the rise of e-commerce, which offers convenience, plenty of selection, and competitive prices. Landlords are scrambling to keep up with the changes. Retailers and landlords collaborate to find ways to fight downward trends in foot traffic. The key is to come up with a plan to give people reason to walk around and enjoy the shopping experience instead of staying home and tapping buy buttons from a sofa.

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