With snow covering much of the U.S. and wreaking havoc in many southern states, we looked at consumer behavior in Texas, where the cold snap triggered widespread power outages and acute hardship. As the mercury dropped in Texas so did spending: down 19% YoY a full 14 points lower than the rest of the country in mid-February. With all sectors except Big-Box retailers and Grocery trending down double digits in Texas, even usually buoyant Online Marketplaces and Food Delivery Aggregators underperformed there by over 25 points.
It seems that not even a global pandemic can keep people off dating apps – as female-marketed Bumble lands an $8B valuation in its IPO. In the last four years Bumble has grown from low single digits to capture 13% of the dating market by sales, while eharmony, Zoosk, and other* smaller services saw their shares decline.
In the ongoing fight against the COVID-19 pandemic, an additional $900B of stimulus relief funds were signed into law on December 27th, exactly nine months after and at roughly half the size of the original $2.2T stimulus package that Congress passed in March 2020. The new funds include direct stimulus payments of $600/$1200 to individuals/couples (vs. the first round’s $1200/$2400) plus an additional $600 per child (vs. the first round’s $500).
With Warner Bros. announcing plans to release new movies on HBO Max in 2021 for no additional fee, we looked at how the news impacted subscriptions and the Video On Demand space more broadly.
With COVID-19 vaccinations just beginning, alongside a further wave of the virus spreading across the globe, Earnest partnered with Fable Data, a European transaction data provider, to assess consumer spending trends across the US, UK, and Germany. We have compared performance across countries and within various sectors since the start of the pandemic, and assessed a ‘current-state-of-affairs’ (Dec ‘20) as consumers exit the holiday season of a global pandemic.
Aggregate consumer spending for the months of November and December declined \~5 and 6% YoY respectively, driven by foot traffic declines of \~14%, a drastic slowdown relative to the \~2% to 6% YoY sales growth exhibited in the same period in the last two years.
As consumers navigate through a pandemic-defined holiday season, we took the opportunity to dig into the start of this season’s behavior utilizing our spend, foot traffic, and retail pricing data, as well as our newly launched income data. Our analysis is an overview of sales data to date* this season. We will be evaluating the full holiday performance after the New Year.
Black Friday is traditionally associated with shoppers flocking to brick and mortar stores for blockbuster deals. However, this year online sales as a percentage of total purchases surged, suggesting shoppers mostly stayed home. Notably, 57% of Apparel & Accessories and Department Store sales occurred online during the Thanksgiving shopping period ended the following Wednesday, up from 46% in 2019.
In anticipation of DoorDash’s IPO, we reviewed statements made in the company’s S-1 and compared them with our spend data of millions of de-identified US consumers. In-line with what’s referenced in the S-1, our data shows DoorDash captured nearly 50% of the food delivery market, an impressive \~35 point increase since January 2018. Grubhub was the primary victim, with its share going from 49% to 19% over the same period.
In anticipation of Airbnb’s IPO, we reviewed statements made in the company’s S-1 and compared them with our spend data of millions of de-identified US consumers. We’ve also added an appendix with a backtest of our data against the company reported GBV. Please reference for detail on biases and alignment with our data.
As we head into the holiday season, the health of the newly acquired COVID shopper is top of mind. With the pandemic driving shoppers online, the retention and significance of this newly acquired cohort has become an increasingly important question.
November 16, 2020
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Business
Petco’s IPO
With news of Petco planning to IPO (again) we looked at how they’ve performed against their main competitor, PetSmart. It’s interesting to note that the overlap of Petco shoppers also shopping at PetSmart’s online-only brand Chewy—while doubling from Jan’18 to Oct’20—is still relatively small at 16%
The COVID-19 pandemic has done more than change consumer habits; it has resulted in a mass migration out of urban centers across the country. Using our Foot Traffic data, we analyzed migration patterns in and out of cities before and during the pandemic to understand just how this exodus occurred.
In anticipation of Academy Sports & Outdoors’ upcoming IPO, we analyzed the retailer’s market share, channel performance, the impact of its geographic profile, and shopper cohorts including recipients of the federally granted stimulus check. Additionally, we looked at sporting goods’ wallet share among Academy’s most vs. least loyal customers. Here’s what we found.
We have refreshed our back to school (B2S) analysis (read Part One) now that the full season is behind us, and added a detailed analysis on discounting and average selling price (ASP) trends utilizing our newest Retail Pricing data. This web-sourced sku-level dataset will be featured in our upcoming product Earnest Retail Pricing, which tracks retailers’ pricing and discounting trends, providing insight into gross profit margins.
The overall distribution of consumer traffic (inclusive of all sectors) during COVID has seen morning and evening activity slow, picking up by midday. Midday (11am-3pm) share of traffic has increased about 400 bps to 33% since the middle of March. As a result of this shift to the middle of the day, weekday visits to restaurants now more closely align with visitation patterns previously seen during weekends.
Earnest continues to monitor the consumer response to the resurgence of coronavirus cases across parts of the U.S. In this refresh, we take a look at spending and foot traffic in the first half of July across states and categories, and drill-down into Restaurant and Home categories in Florida and New York. Additionally, we provide a brief check-in on Amazon’s delayed Prime Day, and review how alcohol sales are performing in light of the resurgence.
After months of wild spending patterns, June saw some signs of normalization with Restaurants, General Merchandise, and Grocers returning to growth profiles of low single-digits. But the virus has now resurged. The last week of June saw a material slowdown in spending growth, particularly in the lockdown-driven sectors; Ecommerce and Home categories slowed 20 points WoW, and General Merchandise and Grocers slowed 10 points to a 5% YoY decline.
After two months of closure from coronavirus concerns, Las Vegas officially opened back up on June 4. Using Earnest Foot Traffic data, we examined the first two weeks since the city’s reopening to better understand its road to recovery, regional dynamics, and local vs. tourist behavior. In aggregate, foot traffic to Nevada casinos remains down 60% YoY, and while still improving, the data is seeing growth plateau.
Along with the Nasdaq, many eCommerce and online focused businesses soared during quarantine. The thinking was that these businesses were either gaining new customers or were getting existing customers to spend in new ways. The belief was that when quarantine ends these gains would become permanent. If these gains aren’t permanent and the sales bump was only driven by hoarding behavior or other one-time purchases, this shouldn’t drive stocks higher since it will not add to long term company earnings.
