What the Eras Tour Taught Us About Event-Driven Retail Traffic
If Q3 retail earnings aren't terrible, we can thank Taylor Swift
Taylor Swift’s Eras tour, a 146-show, five-continent spectacle of 44 songs spanning 10 acts, was America’s summer sensation. The economics are staggering. The 33-year old pop artist is personally making $13 million a night, according to Bloomberg.
And last night, “The Eras Tour” film debuted in Los Angeles. So in case you missed the concert when it came to your city this summer, you can catch the nearly three-hour highlights reel at your local theater. Pre-sales of movie tickets soared to over $100 million. Let’s hear it for the 33-year old moneymaking machine.
There’s no denying the artistry of Tay Tay. Yet her rise to the highest heights in pop music and global culture is visibly charted by the average resale ticket price of her shows. In 2018, Swift’s Reputation tour ticket resale price was $191. This summer? The average resale price of an Eras ticket was $1,607 according to a CNN story citing SeatGeek data. No one will forget the media attention on Ticketmaster when its tech stack couldn’t stand up to the 14 million fans that showed up on the first day of the Eras tour US pre-sale. Ticketmaster claims that they prepared for 1.5 million fans.
Last month, RetailNext, a retail analytics company used by brick-and-mortar stores, released data showing that store traffic increased an average of 7% across a sampling of Eras tour cities including Nashville, Santa Clara, Atlanta, Minneapolis, and Pittsburgh. The effect was strongest in Nashville (up 14% from the store traffic in the 3 weekends leading up to the concert), where Taylor began her career, and in Pittsburgh (up 10%) where Taylor was born. According to the Federal Reserve, the effect was also observed in hospitality, where record occupancy levels and hotel room revenues set records. In some cities, like my hometown of Minneapolis, traffic was down on concert days (versus the same day of week and week of the year, the year prior) but it was down less than in the lead up trend, implying a net positive effect.
When I reviewed the data under embargo, I was initially nonplussed. Any major event brings surges of people to metropolitan areas in the days before and after occasions like sporting events, anniversaries, municipal observances and the like. Thanks to the Eras Tour, 20 destinations in the US had their equivalent of a small-scale Super Bowl this year.
Our world is becoming increasingly event-driven. Unless we have a very special occasion, we’ve become creatures that seldom leave home. The best proof I have for this is statistics from the National Retail Federation about returned goods. In 2012, 8.8% of items purchased (both in-store and online) were returned. By 2022, that figure had almost doubled, at 16.6%.
I am biased, because I’ve operated brick-and-mortar retail locations. From a post-purchase satisfaction standpoint, an in-store experience is generally going to perform better than an online experience. Why? Because there are opportunities for try-on (fit/size validation), and the likelihood of cognitive dissonance between ordering and receiving an item collapses when it’s coveted and collected in the same interaction. The variables that can be difficult to qualitate through a screen - like color, stretch, texture and quality of construction - become apparent with a tactile experience. This is particularly important with expensive and low-frequency purchases.
When I operated retail locations, our team relied heavily on events to bring people in. We hosted well over 50 events per year, ranging from dog dinner parties to paint-and-sip and holiday wreath-making. Our biggest event was a wine club pick up party with Banshee, a winery based in Healdsburg, California.
As visits to stores generally wane following a post-pandemic pick up, retailers are ever more reliant on special occasions to get people to the store. This is why you see special offers on buy online, pick up in store (an extra 20% off at World Market!) and 2-hour store pick up options for those who want their merchandise on the same day and are willing to take on the “last mile” delivery obligation, themselves. Using stores to process online returns also reduces shipping costs and offers customers easier exchanges when suitable replacement inventory is in-stock.
What might the world be like as we skew towards an increasingly event-driven economy? One that panic-buys before inclement weather and outbreaks of disease. One where most routine goods are now transacted via Amazon and brought to our homes by FedEx. And one where we don’t go shopping very often, unless we’ve already invested hundreds if not thousands of dollars in a special experience? Something for stores to reckon with, and a dynamic that is continuing to shape the future of American storefronts. The Eras tour provided economic lift across the US this summer but what will take its place in 2024?