For months prior to yesterday’s massive 45% inflection, our promotional ensemble revealed sharp behavioral changes in how Victoria’s Secret was connecting with leads. Our systems were tracking sharp reductions in email campaigns and sending volumes typically associated with robust organic demand.
When brands see strong responses to new product offerings, they can reduce reliance on push email campaigns. Our systems tracking volumes of promotional emails to real VS customers and leads tipped our investor partners toward to soon to be announced massive beat and raise.
Specifically our steep discount index declined over 35% as VS sent fewer 40% off discounts. Our ‘desperation’ index also retreated lower as VS needed fewer incentives such as “extra 10%” or “free”. In the first half of the year VS send nearly 200 fewer email campaigns than PY!
Not to our surprise, this promotion shift resulted in a 240 basis point expansion in the gross margins with notable strength in merchandize margins and greater full priced selling . At Random Walk, our investor partners have been alerted to this outlier but through our data feeds and specific call outs.
Victoria’s secret further validated our conclusions by specifically citing a “promo detox” strategy that reduces promotions and markdowns in favor of “compelling emotional messages” to drive a healthier, brand-led
