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
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.
Random Walk Email Intelligence has never identified more unusual promotional activity than over the past 30 days. In June alone our systems have captured nearly 100 never seen before campaigns as consumer preferences shift.
HOME FURNISHING PROMOTIONS ACCELERATE TO NEW HIGHS
BIG, LOVE, W, WSM
In home furnishings our data indicates COVID pulled forward, not just several quarters but year’s worth of demand. Now, with the backyard, garage space and wallets maxed out, consumers are shifting away from creating the perfect Instagram worthy at-home backyard oasis.
Random Walk Email Intelligence indicates record growth the discount campaigns in Q2 from Pottery Barn.
DEMAND FOR CASUAL ‘AT HOME’ FOOTWEAR FADING?
CROX, FL, SCVL
During COVID, Americans gobbled up footwear for the outdoors or comfort around the house casual footwear retailers benefitted and throttled back promotions. However, this summer with consumers more spartan due to gas prices and $20 hamburgers they don’t appear to need so many sandals.
Crocs and Crocs retailers such as Foot Locker and Shoe Carnival have been blasting an all-time high volume of Croc’s specific discounts.
GET OUTDOORS ON THE ROAD MEETS $6 GAS
CWH, WGO, YETI
Without COVID checks, a free pass from work, and with $6 gas it appears road trip RV, van and mega SUV trips could be stalling. Our email intelligence has tracked growth in promotional volumes for outdoor camping accessory related businesses such as Camping World, Winnebago, and Yeti.
Into summer camping season Camping World has blasted out an all-time high volume of significant and steep discounts.
Our data visualizations allow quick identification of outliers within a specific sector. Find out which brands are losing organic demand and responding with increased “push” discounting campaigns to their leads
Download the pdfhttps://ranwalk.com
> 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
Updated weekly, our industry leading email intelligence tracks consumers in near real-time. Identify trends and inflections before earnings, and ahead of the street.
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:
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.
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.
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.
