FEBRUARY 13, 2025
Are your research dollars allocated to detecting real inflections or have your overspent on predicting the present?
> Explosion in alternative data has led increased precision in predicting KPIs such as current quarter revenues and same store sales.
> Sudden share revaluations in brands such as DASH, MTCH, BROS, SIG, MODG and PLAY indicate significant opportunities remain in detecting organic inflections.
Missing the Forest
The above advertisement from 1996 was prescient, but our promotional ensemble data can help investors better understand the tidal wave of changes that are occurring in real-time.
Institutional investors’ thirst for edge has led to overconsumption of complex ‘information’ that often misses the bigger shifts in preferences. Random Walk focuses on uncovering more actionable inflections based on changes in core demand for products and services through our Promotional Ensemble.
Stay Home and Swipe.
Perhaps mostly driven by 5G and engineered addiction of smart phones consumers are moving away from activities popular in the past. Dating, courtship, buying engagement rings and the products of Signet and marriage appear to be substituted by ordering Wingstop delivery on DoorDash and betting on sports with Draftkings.
Getting together and going out for in person entertainment at Topgolf or Dave & Busters is being replaced by swiping through Insta.
Random Walk Promotional Ensemble
When brands are struggling to generate demand the easiest and most cost effective band-aid is to blast out email discounts. This is where the Random Walk process provides unique edge. We have been capturing, categorizing and classifying millions of email promotions from leading brands for more than 7 years. If decaying inventory isn’t moving quick enough, without spending much on advertising, brands just push out escalating discounts to leads. Conversely, when organic demand is growing brands slow email campaigns.
Random Walk has been serving investors for 14 years. After years of focusing on clicksteam, foot traffic data and other online measurement, in 2017 we shifted to focusing on creating the most quantitatively accurate promotional ensemble in the industry. As others used tractional data to incorrectly assess demand in department stores such as JC Penny, our process alerted investors that these sales were just a result of liquidation coupons.
Listen to learn more about our methodology is different than other big data providers below:
Greg’s chat with Mark Fleming-Williams on Apple Podcasts
Below: skyrocketing steep discounts and a rise in the effective discount uncover the inflection.
Promotional Ensemble for JC Penny: 2017 Liquidation coupon explosion inconsistent with a rebound in organic demand.
Uncover gross proift and gross margin inflections
Our promotional ensemble indices are now available through Maiden Century. For many brands spikes in email promotional activity have meaningful relationships with gross profit and gross margin.
Acceleration in nearly every promotiponal email index conveys a change in strategy. Ulta appears increasingly reliant compared to past periods on ‘push’ discounts to beauty shoppers.
Random Walk Desperation Index, Steep Discount Index and Significant Discount Index are all either approaching or setting new highs this Spring.
New campaigns attempting to drive online engagement and conversion include:
“Open this email for FREE gifts and 50% off”
“FREE 4PC MAC Gift”
“FREE 17 PIECE SET”
Desperation Index. Our new desperation index tracks growth in certain keywords within email campaigns such as “extended”, “free shipping”, “urgent” and “one more day” to name a few.
Steep Discount Index Our systems classify any coupon with an implied discount 40% off or steeper as steep. Recently Ulta has used much more 50% off language.
Significant Discount Volumes Our significant discount index tracking any coupon impacting the price has also shown acceleration beyond seasonal norms.
All three of our datasets tracking ABNB confirmations were weak in September. The “reservation confirmed” dataset turned negative Y/Y during the last week in September after displaying strong Y/Y gains earlier in the month. Our tracking of “receipts” slowed as the month progressed, however the Y/Y trend remained positive. The “Welcome” dataset also displayed a consistent negative Y/Y trend.
Based on these confirmation datasets and slowing web traffic, we believe it’s likely that ABNB’s business slowed in September.