Random Walk email intelligence through our promotional ensemble delivers the most quantitative and predictive tracking of implied discounts and promotional cadence available. When brands are struggling to generate organic demand they ramp up sending volume to their leads and customers. We capture these potential inflections in near real-time and alert our investor partners ahead of the street.
Abercrombie & Fitch (ANF)
TOTAL PROMOTIONAL VOLUME + 9% GROSS MARGIN +460bps
TOTAL PROMOTIONAL VOLUME +650% GROSS MARGIN: -550bps
Petco (WOOF)
STEEP DISCOUNT VOLUME +780% GROSS MARGIN: -140bps
Ulta Beauty (ULTA)
STEEP DISCOUNT VOLUME +107% GROSS MARGIN -110bps
Walmart Inc. (WMT)
STEEP DISCOUNT VOLUME-37% GROSS MARGIN 40bps
ANF: Sharply declining total promotions translate to gross margin gains of 460bpsOLPX: Exploding total promotional volumes translate to forecast gross margin delcines of 600bps
Random Walk New Keyword Tracker Launched. Our new technology helps investors instantly detect changes in the promotional intensity brands are using to communicate with leads. Detect inflections in core demand through tracking of desperation keywords in emails such as “extra”, “extended”, and “one more day”.
Keyword tracker uncovered the largest ever spike in “Nike” related keywords from key wholesale partner email correspondance over the past two weeks.
PREVIEW: Promotional Outlier Focus: Nike Partners Sending Record Volume of Discount Campaigns ASO, DKS, FL, M, NKE, SCVL
Last quarter, Nike reported slowing revenue growth as consolidated revenue increased year-over-year by 5%, down from 14% year-over-year growth in the prior quarter. While total promotional activity direct from Nike is stable, we are capturing record breaking volumes of Nike coupons from wholesale partners implying lagging organic demand. We also anticipate a weak quarter for Foot Locker, which purchased 65% of its athletic merchandise from Nike during the most recent fiscal year.
NIKE PARTNER PROMOTIONAL HIGHLIGHTS Foot Locker (FL) sent record volumes of “Nike” focused promotions in July. We have tracked a 67% year-over-year increase in email volumes containing “Nike” for the May-July period
.Academy Sports & Outdoors (ASO) sent greater volumes of “Nike” focused promotions this Summer. We tracked a 49% year-over-year increase in email volumes containing “Nike” for the May-July period.
Shoe Carnival (SCVL) Shoe Carnival “Nike” focused promotion volume increased by 2,783% on a year-over-year basis for the May-July period.
Macy’s (M) We captured a rare “Special 20-25% off from Nike”.
Mattresses experienced the fastest total promotional email volume growth last week.
Live entertainment continues to see the biggest decline for the past quarter in term of significant discounts.
Petcare is seeing fast rising significant discounts over the past quarter.
Footwear remains one of the more promotional subsectors in our coverage with 11 of 15 tickers recording substantially higher significant promotional volume YoY last week.
For the first time since March, Home Depot and Lowe’s both stayed out of “red” in the same week for increases in significant promotional volume. Both HD and LOW exhibited stable YoY total promotion volume.
Our Department Store index has captured a divergence between several well-known retailers with some ramping promotions and others now easing. Earlier this summer we tracked largely “worsening” trends.
Outdoor Apparel remains a longstanding member on the “worsening” list as all tickers in our index recorded increased total promotional volume YoY over the past two weeks.
Furniture demand continues to lag as total promotional volume is ~40% higher YoY and significant promotional volume was up 122% YoY in the week ended June 12.
We recently launched a new product that examines trends of promotional activity within subsectors.
Highlights:
Footwear promotional volume continues to accelerate higher. 9 of the 13 tickers in our footwear index exhibited a “worsening” promotional trend last week with 12 of 14 worsening on a monthly basis.
Luxury Retail demand appears weak as significant promotional volume has worsened on a YoY rate of change basis at several major companies in our subsector index.
The Sporting Goods subsector has emerged as another addition to the worsening list. All 8 companies in this index have sent out substantially higher promotional volume in the most recent week compared to the prior year.
Outdoor Apparel promotions continue to stand out as significant promotion volume YoY growth for this subsector exceeded 100% in three consecutive weeks recently.
Demand doesn’t appear to be returning at home improvement retailers. Promotional volume is substantially higher at all 5 companies in our index compared to the prior year.
APRIL 20, 2023 Random Walk Email intelligence suggests management is responding to fading organic demand in home furnishings and home improvement with more aggressive pushed offers to their leads lists this spring
Home and home furnishing related names have been more aggressive in sending promotions to leads this April compared to last, with Wayfair (W) and Pottery Barn(WSM) as standouts on our slowing list. Each had more faster ramps year-over-year promotion growth in significant discounts.
Home improvement retailers Home Depot (HD) and Lowe’s (LOW) are dealing with declining demand in part by sending new and more frequent email promotions to leads. We also recently captured new spring holiday language unseen in prior years.
In terms of fastest growers of total email volumes Floor & Decor (FND) stands out. Total promotional volume is a good way to measure concerns from brands that do not discount such as Restoration Hardware(RH). As can be seen above, RH is sending more communications to leads, despite no significant discounts outside of the outlet.
Our updated promotional ensembles provide the most robust, quantitative and rigorous views of how brands are communicating with leads.
Our promotional ensemble identified the biggest outliers of the period from several weeks before Black Friday through Cyber Week for our investor partners.
Standouts with previously unseen promotions, largest risers in discount campaigns, or those with robust organic demand that were able to reduce email volumes include:
Our email intelligence systems have been capturing tracking and classifying emails from leading brand for nearly 7 years providing the most robust, quantitative insight into email promotional activity. i
The quickest and cheapest method for management to respond to demand inflections is to adjust its cadence and intensity of email discounts.
AMERICAN EAGLE OUTFITTERS (AEO) Both total promotional email volume and significant discounts nearly 30% lower than a year ago.
GAMESTOP (GME) Meteoric rise in BF related promotional activity with “$50 off x box” and “up to 60% off video games”.
HELLO FRESH (HLFF) Total promotional email volumes up nearly 300% driven by “$180 off Thanksgiving” and “get up to 70% off” discounts.
LOVESAC (LOVE) Steeper than year ago and higher volume significant discounts driven by “35% off Bundles”.
NIKE (NKE) Sequential and YoY declines in steep and significant discounts
VF CORP (VFC) Both North Face and Vans saw sharp rises in all categories of email promotions. Total inbox volumes, significant discounts, steep discounts and storewide promotions all rose to record highs.
contact us for to see the entire Holiday Promotional Outlier List
Within our universe of nearly 300 names, our email intelligence identified several brands relying on record setting promotions and discount to drive traffic both online and in stores. Compared with prior years, total promotional volume, total steep discounts, total significant discounts were all at least 100-200% higher than year ago levels.
Our systems alert investors to these situations which have often signaled dramatically reduced guidance.
> Email Intelligence successfully detected the collapse of one of the biggest FOMO driven manias in US history: “crypto trading”.
> Random Walk ensemble alerted investor partners to sharp deceleration in orders, new account “welcome” confirmations, as well as a higher deletion rate for new product offerings.
> Wall Street bankers and analysts, motivated to sell the management “narrative”, extrapolate unsustainable growth rates into the future, but RW data can help uncover inflections
In 2020 and into 2021 our data indicated strong, but likely transient growth in new “Welcome to Coinbase” email confirmations. This unsustainable growth was driven by a ‘Black Swan’ mosaic of factors: bored locked down Americans, unprecedented Uncle Sam stimulus checks, and social media FOMO pictures of teens in pajamas getting rich trading Crypto Kitties.
After lockdowns and free money ended in late 2021 our ensemble uncovered slowing in new customer confirmation emails, and we added COIN to our slowing list.
‘GENIUS’ SUPER BOWL QR AD GENERATES CLICKS NOT CUSTOMERS
Above: Super Bowl Ad fails to generate customers, but drove worthless clicks due to its nebulous nature
Several additional data driven trends revealed themselves earlier this year. The inability for a $14 million Super Bowl ad to attract new customers was apparent as our data detected no spike in new accounts. While the media focused on worthless “clicks” our data showed a lack of actual new customers. Management hubris led to equivocating marketing a crypto-trading platform with proven consumers products such as alcohol/beer, quick service restaurants, auto, apparel etc.
In March, our email intelligence indicated very high delete rates for new products marketed with email promotions such as Coinbase One, and Coinbase NFTs. With gas at $6 a gallon and $25 hamburgers and rising rates, consumers had lost interest, as they prioritized getting to work and feeding their families over possessing digital unicorn.
BITCOIN SPIKES, TRADING VOLUMES DON’T
The lack of interest in trading “cryptos” despite a spike in bitcoin after Putin invaded Ukraine showed in our data and confirmed the slowing trend.
AS BROADER EQUITY MARKETS CORRECT, CUSTOMER GROWTH ENDS
Once the high growth equity tech bubble began to collapse and consumers saw their 529 plans, 401ks, and brokerage accounts decline, they quickly shifted their preferences away from crypto trading.
Updated weekly, our industry leading email intelligence tracks consumers in near real-time. Identify trends and inflections before earnings, and ahead of the street.
