Negative Inflections – RW Financial - Identifying Inflections in Consumer Trends

Holiday Promotional Outliers

Posted at 01 Dec 2022 , Greg Robin Random Walk, Negative Inflections, Positive Inflection

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:

AEO, COUR, CROX, CURV, GME, HIBB, LOVE, PVH, NKE, RH, SCVL, SONO, TPX, TSCO, URBN, VFC

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

Rising Discounts, Promotions Predict Reduced Guidance

Posted at 15 Jul 2022 , Negative Inflections, Positive Inflection

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.

BBBY, DASH ,GPRO

Weak Email Order Confirmations Signal Miss

Posted at 14 Jul 2022 , Negative Inflections, Positive Inflection

Tracking more than 1 million consumers, our ensemble has been successful at identifying severe slowdowns in demand for key goods and services.

(12) Our current list contains outliers that have shown dramatic deceleration in demand online.

Updated Slowing List

Coinbase: Email Intelligence Detects Collapsing Customers, Orders

Posted at 11 May 2022 , Greg Robin Random Walk, Negative Inflections

> 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.

EMAILS PROMOTING SUBSCRIPTION, NFT PRODUCTS DELETED

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.

Download the full Coinbase PDF here

Largest Inflections: Strongest Growth & Worst Decliners

Posted at 17 Feb 2022 , Negative Inflections, Positive Inflection

Updated weekly, our industry leading email intelligence tracks consumers in near real-time. Identify trends and inflections before earnings, and ahead of the street.

UPDATED: Improving Detailed List

UPDATED: Slowing Detailed List

Random Walk Email Intelligence: Inflections Identified EBAY, ETSY

Posted at 06 May 2021 , Negative Inflections, Reopening Trends

EBAY: More aggressive discounts in certain product categories

Our email intelligence uncovered a subtle, but critical change in the email sending patterns of EBAY.

During COVID as demand had risen to unprecedented levels, EBAY throttled back the frequency and intensity of their email campaigns and discounting. However, this March our proprietary systems detected a reversal, with EBAY ramping up a specific type of email campaign containing discounting language unseen before. As management began to see COVID demand wane, they began using steeper promotional language in specific product categories. We identified this and warned our clients. In ETSY our tracking of order confirmation volumes showed a significant sequential slowdown in April.

Our ensemble has detected incredible, all-time high demand for car rentals(CAR) this spring as locked up Americans return to travel. This has resulted in less time and interest than a year ago for stocking up the home on small electronics(BBY), home décor (BBBY, ETSY), at home fitness (NLS).

GameStop (GME) Squeeze: Proves demand for online “games” strong, not brick and mortar stores.

Posted at 15 Feb 2021 , Negative Inflections

In the COVID era Americans are spending more time indoors hovering over their laptops, ipads, iphones looking for entertainment. With only so much Netflix (NFLX) content available for binging, consumers are ramping their COD, GTA and other gaming activity. The recent Reddit GME casino hysteria perhaps the most intense form of “online gaming” seen in history.

Using our proprietary email intelligence, we investigated whether there was any evidence of actual demand increases for the stale brick and mortars dinosaur GameStop.

Below our promotional ensemble quantifies exactly how desperate GameStop was in attempting to generate sales surrounding the critical holiday period. Compared with a year ago incentive email offers have risen an astounding 1300%. Also alarming, is our classification has tagged substantially more steep discounts than a year ago. Upon closer inspection these are from increasing coupons such as “up to 50% off games”, “$40 off used games”. Increasing discounts for core product offering bode poorly for demand.

Often times with the focus on online, management teams are shifting sales from in-store to online in an effort to show evolution. However, our promotional data reveals much of this increased e-commerce activity is from pushing out steep , never seen before discounts to their existing customer base.

Category Archives: Negative Inflections