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
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.
TOTAL PROMOTIONAL VOLUME + 9% GROSS MARGIN +460bps
STEEP DISCOUNT VOLUME +75% GROSS MARGIN: -480bps
SIGNIFICANT DISCOUNT VOLUME +127% GROSS MARGIN -370bps
STEEP DISCOUNT VOLUME +79% GROSS MARGIN: -460bps
STEEP DISCOUNT VOLUME +108% GROSS MARGIN: -160bps
TOTAL PROMOTIONAL VOLUME +650% GROSS MARGIN: -550bps
STEEP DISCOUNT VOLUME +780% GROSS MARGIN: -140bps
STEEP DISCOUNT VOLUME +107% GROSS MARGIN -110bps
STEEP DISCOUNT VOLUME-37% GROSS MARGIN 40bps
| 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”. |
June 28
We recently launched a new product that examines trends of promotional activity within subsectors.
Highlights:
BIG, FND, HD, LOW, LOVE, LZB, OSTK, RH, W, WSM
| Matt Gordon Greg Robin 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:
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