We used the newly launched RW Claude Connector to ask if Shake Shack (SHAK) was modifying their email marketing strategy in recent months. Typically, brands present the narrative to investors that they are never discounting, but the Promotional Ensemble goes under the covers to detect if any sneaky changes in messaging or offers to key cohorts is occuring.
Using our RW MCP Claude connector, we inquired as to if there were any unusual marketing campaigns from Nike. The response, while complex, is not surprising. Nike is still struggling to connect with its lead base and is engaging in unusual discounts to push sales.
Our new Random Walk Claude MCP leverages our best in class proprietary data repository containing millions of email campaigns dating back to 2018 for leading brands. Our process classifies and categories these emails turning images to readable text enabling investors to uncover stuble changes in the marketing message from management.
Many times brands do now offer or change their explicit discount, but tweak the language or send more campaigns than the past. This typically indicates diminished organic demand.
With rampant inflation continuing to chew into consumers purchasing power, we continue to see a shift away from demand for discretionary knick-knacks towards critical household staples including food and clothing. The diverging promotional growth patterns in BBWI and WMT make this trend apparent.
> BBWI forecast high single digit declines for the critical Q4 holiday quarter, noting a challenging start to holiday shopping beginning in Q3 … highly competitive environment”.
>. BBWI management’s final comment directly aligns the the email campaigns we tracked “…our customers are waiting for deeper discounts before making purchases.”
> Gross Profit Rate declined 220 basis points as management noted “increased promotional activity to clear inventory”.
> Walmart (WMT) vs Bath & Body Works (BBWI) Not all retailers are exploding their promotional campaigns and email volumes. As seen below WMT total volumes actually declined into peak shopping season as consumer preferences shifted towards cost effective core needs and away from discretionary scented candles and bubbles..
We captured explosive growth in 75% off campaigns from BBWI
Additionally BBWI was forced to grow BOGO campaigns by nearly 300%
>. Our promotional ensemble was successful in detecting the revenue miss and underwhelming guidance.
> In recent weeks total campaign volume has accelerated to new all-time highs.
>Our index for dollar amounts off and high dollar incentives have been above or near Black Friday levels for the past quarter.
Our promotional ensemble was successful in detecting the inflection in Chipotle and Cava. As organic demand slowed both ‘bowl’ sellers began offering more and more freebies to their most loyal customers. Additionally, “new” product promotions and deals were send to a higher percentage of their lists. Instead of select targeted campaigns, massive blasts triggered our promotional ensemble.
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.
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.
COVID Masks and Crafts vs. Feeding the Family
ETSY: Ensemble revealed new discount campaigns ahead of reduced outlook.
WMT: Ensemble tracked fewer email campaigns, and declining promotional discounts before improved inventory position and strong outlook.
While our competitors focus on precisely tracking revenues our promotional ensemble provides a more predictive gauge of organic demand. Our technology can uncover changes in how brands communicate with customers and leads.
With the holidays in the rear-view mirror, it appears demand receded, and management responded by ramping up the implied discount language in emails. We captured more campaigns using 40% off language for specific categories. These campaigns and language had never been used before.
Persistent declining sales for the mature marketplace provides clues that consumer preferences have shifted. Gone are the lockdown and stimulus-related tailwinds driving interest in at-home crafts, masks mini calendars, dog sweaters, cute cocktails mixology and other unessential at-home items.
As food costs have spiraled out of control consumers have shifted to the perceived value provided by Walmart.
Wall Street’s ‘silo’ style of coverage creates the opportunity as one analyst covers ‘internet’ with Etsy and entirely different team covers consumer staples and Walmart. Both are now technology companies. Our sector agnostic data driven approach makes it easy to compare the two. As seen in our composite, Walmart is clearly responding to improved inventory levels and robust demand by reducing their email campaigns and discounts
