Updated weekly, our industry leading email intelligence tracks consumers in near real-time. Identify trends and inflections before earnings, and ahead of the street.
Greg Robin Insights
OCTOBER 2021 UPDATE
Bed Bath & Beyond (BBBY) Our system uncovers steep discounts, increased promotional campaigns, revealingly tepid demand foretelling, reduced earnings, guidance.
Dicks Sporting Goods (DKS) Promotional ensemble captured reduced significant incentive emails, steep discounts, translating into continued robust revenue growth, improved margins.
Promotional Index Our first data product has launched providing the most robust and quantitative view of nearly 300 brands promotional cadence dating back 4 years.
While most “home” related retailers were reducing their promotional campaigns and email sending volumes due to strong demand and supply chain constraints BBBY’s was doing the opposite. For much of 2021 Bed Bath and Beyond crafted the narrative of a revamped, growing e-commerce platform and a turnaround with new in-house products. While management sold the turnaround tale, our email intelligence detected they were ramping up “push” email offers to all-time highs in the face of stalling organic demand. With a long history of blasting out never ending 20% off coupons, our systems tracked an increase in the maximum discount implied and more frequent pushing of the same offers to leads.
The Random Walk Promotional Ensemble enables investors to quickly compare email discount campaign cadence on weekly basis with prior periods. As seen below both total promotional emails as well as our significant incentives category have been tracking at higher levels than any period over the past 3 years.
For Dick’s Sporting Goods (DKS) our promotional ensemble revealed the opposite situation as Bed Bath. As demand for sporting goods and a return to youth team sports accelerated this summer, DKS dramatically reduced nearly every form of promotion. Our systems tracked a 65% reduction in incentive promotions.
In both BBBY and DKS. investors focused on proxying revenues with expensive transactional failed to capture the extent of the inflections.
BBBY missed revenues by 3% with revenue guidance just 2% below expectations. The explosive 300% growth in promotional activity provided a clearer picture of the dramatic decline in organic demand consistent with the 25% drop in share price that ensued.
For DKS, while revenues did blast by consensus, our ensemble correctly tracked higher merchandize margins translating to bottom line improvements with a blowout $2 earnings beat and a 25% increase in earnings guidance for the year.
The newly launched Random Walk promotional index data product provides the most robust quantitative view of promotional cadence available. Uncover demand changes as management responds to them weekly.
With more than 6 years of historical data tracking email promotional activity from nearly 300 consumer brands we are excited to launch our first data product!
This fall select clients can access structured weekly data for this first time.
Investors will be able to quantify and help answer the following:
- Changes in campaign frequency
- Did a brand run more marketing campaigns in order to drive sales?
- Did a brand reduce campaigns as demand increases?
- Growth in customer and lead lists
- Has a business grown its lead list?
- Intensity of promotional offers and discounts
- Did the size of discount increase as a seasonal sale progressed?
- Did the coupon specify a higher discount than prior periods?
- Changes in promoted products
- Are there changes in which products are being discounted?
- Changes in targeting strategy
- Is a brand struggling to hit sales quotas engaging in more “blasts” to its entire list?
Our promotional email ensemble helped investors better understand and quantify the magnitude of changes in the intensity and aggressiveness that apparel brands such as Abercrombie & Fitch (ANF), American Eagle (AE) and Guess (GES) are sending. As weather has warmed, our promotional ensemble reveals robust demand growth as consumers previously stuck at home load up on “going out” summer apparel.
Our promotional ensemble quantifies the changes such as key declines in the volume of email campaigns, the distribution discounts offered.
Successfully channelling rebounding demand for swimwear, AEO’s Aerie has further throttled back its promotions.
AEO’: 80% drop in indentive emails
Our tracking on an sector basis reveals AEO has become one of the least aggressive promotors compared with its peers compared with just a year ago.
AEO: Sharp decline in total promotional activity compared to peers
For Guess, our email intelligence allows investors to quantify the exact campaign frequency and intensity. As can be seen below, Guess is pushing out significant promotions and discount coupons much less frequently than a year ago as organic demand has rebounded.
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).
AEO, CWH ELY, LE, NLS, PTON, SEAS, SEAS
To start April our email intelligence is indicating potentially significant changes in consumer shopping behavior. Temperatures are warming, and coincident with a COVID positivity rate in California sinking to 1.5% the state is relaxing restrictions and Americans are looking to get out.
Our ensemble indicates sharp decelerations in ‘garage’ fitness equipment such as Bowflex, Nautilus and even Peloton. Have we finally maxed out our kettlebell collections? Our email intelligence tracking various order confirmations shows volumes near 6 month lows.
On the positive side, our email intelligence tracking ticket confirmations indicates the broader reopening of Sea World and Magic Mountain has generated explosive demand in getting out to the theme parks.
Our ‘Spotlight’ report focuses on identifying the bullish combination of declining promotional email activity coupled with rising organic online traffic. The names with the biggest strength share a common threat of getting outside. These include: AEO’s swimsuit line Aerie, ELY and Calloway’s new ‘Epic’ drivers and irons, LE with Land’s End outerwear and swim and CWH camping gear.
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.
Tracking New Customer Acquisition: 2020 was our most successful year in uncovering demand changes undetected by ‘big data’ credit card and transactional sellers. As COVID forced Americans inside, consumers discovered existing virtual solutions were superior to legacy in person dependent platforms.
For Docusign (DOCU), Fiverr (FVRR), Upwork (UPWK), Wix (WIX) our email intelligence captured exponential explosive growth in new customer acquisitions a full quarter ahead of pricy ‘big data’ transactional providers. By focusing on unique leading indicators such as “Welcome to Docusign” and “Your Wix site is published” instead of chasing coincident revenue proxies such as receipts we provided our investor subscriber parters a big jump on their competition. Docusign (DOCU) shares have appreciated more than 150% since growth in consumers receiving these confirmations triggered our identification in MARCH. Similarly, our methodology identified Upwork(UPWK) to start May with shares quadrupling.
If consumer preferences changes again as Americans leave their homes our investor partners will be the first to know.
EXPE- Hotels.com email booking confirmations fail to stabilize into 2021.
We recently made substantial upgrades to our email categorization system. As as result of this, we can now better understand which brands and businesses are changing how they communicate with consumers and leads.
Our weekly ‘Promotional Spotlight’ report highlights the brands whose discounting and promotional activity have diverged the most since the prior year. We can provide custom analysis for investors in brands of interest. Which brands increased their steep discounts? Which brands are sending their seasonal sale related email offers more frequently? Are brands slowing their sending pace based on strong demand.
