Data Trends for Investment Professionals


Black Friday Surprise: E-Commerce Intelligence from Quandl

Quandl’s newest dataset: 1000+ brands, $15bn revenue, 250+ e-tailers

Every year, after a day of poultry-themed festivities, millions of Americans follow their tryptophan rush with the biggest days in retail: Black Friday and Cyber Monday. And, every year, the proportional amount of online shopping increases. Following the trend, Black Friday 2019 should see yet another decrease in foot traffic and yet another increase in digital sales.

As online purchases become a larger segment of total retail, e-commerce activity becomes more representative of overall company performance. For the data-driven investor, this means that access to e-commerce sales data is an increasingly powerful tool.

Quandl’s newest data product, E-Commerce Intelligence (ECI), presents this data right down to the product level in near-real time for over 1000 brands. In this post, we’ll take a look at the power of ECI through a few of Black Friday/Cyber Monday 2018’s most prominent brands.

The dance of the toasters and toys

In the world of e-commerce, particularly on Black Friday, no two retail categories are created equal. You may prefer to shop for clothing and cars in person, but toasters and toys? Definitely from the comfort of your home.

For instance, sleep-deprived parents and gamers buying the season’s newest console or hottest game are migrating to online retail for their holiday purchasing. To wit, look at the spike in Activision [ATVI] sales through Black Friday:

Gaming data from Quandl's e-commerce intelligence shows a spike in Activision's sales on Black Friday 2018.
Tracking e-commerce sales with ECI, we can see that Black Friday and Cyber Monday play a pivotal role in Activision’s online sales.

Gaming powerhouse Activision sees a huge influx of sales specifically on Black Friday. Further, with a 5% increase in reported digital revenues from 70% in Q4 2017 to 75% in Q4 2018 [1] it’s likely that Black Friday’s e-commerce sales will track even more closely with Activision’s overall performance in 2019.

If practical gifts are more your style, you’ll be part of the large cohort driving online sales in household appliances. Purchases typically reserved for big box stores, like toasters from Hamilton Beach [HBB] and vacuums from iRobot [IRBT], have been swept up (ha) in the digital migration.

Quandl's E-Commerce Intelligence data shows Hamilton Beach seeing just under 50% of annual sales on Black Friday and iRobot seeing just under 70% of annual sales on Black Friday.
Where monthly and quarterly revenues tend to be delayed, Quandl’s ECI data allows us to see sales spikes (such as Hamilton Beach) in near real-time.

People still wear UGGs?

Apparently, yes. The apparel industry hasn’t yet figured out how to make online shopping feel like the in-person experience, but certain brands – such as UGG – see a disproportionate uptick in online sales over the Black Friday and Cyber Monday period.

UGG's % of annual sales by demographic sees a jump from approximately 2% to nearly 12% on Black Friday
The swell in holiday sales at the end of November drives a large percentage of UGG’s annual revenue.

To further accentuate the spike, we look to an earnings call from Deckers Outdoor [DECK] (UGG’s parent company) for their fiscal Q3 2018, which ended on December 31, 2018. Addressing positive performance in their direct-to-consumer channel, CEO David Powers cites “stronger-than-expected e-commerce results,” pointing out “strong online demand and a shift in consumer purchasing patterns.” [2]

With this in mind, we can look back to UGG sales with a keen eye. Quandl’s ECI data reflects a similar trend as noted by Powers, with dollars spent on e-commerce purchases tracking closely with its direct-to-consumer segment. Over the holiday season these patterns approach parity, indicating that the UGG data captured by ECI provides an accurate snapshot of consumers writ large.

UGG brand sales as visualized in both ECI and UGG direct-to-consumer shows that ECI tracks closely with reported DTC sales, with spikes every Black Friday.
Purchases made through electronic retailers provide a representative sample of buying patterns for UGG’s broader consumer base.

Typically though, access to brand performance is gated by earnings reports and quarterly updates. The above wasn’t publicly noted by Deckers Outdoor until the earnings call on January 31st, 2019… over two months after Black Friday 2018. However, with Quandl’s E-Commerce Intelligence, you can stay up-to-date with these shifts as they happen.

With ECI, data-driven insights into performance for over 1000 brands are available in near real-time. View sample data about Black Friday and Cyber Monday now.

Rolling through the holidays

Perhaps instead of the holiday rush you prefer to take a few weeks of vacation abroad after the new year. Understandably, you might be looking for a deal on a new suitcase while you roll through December. In the online retail space, you’re in good company.

ECI data shows us that online purchases of the popular luggage brand, Samsonite [SMSEY], tend to track well with total reported sales throughout the year in North America.

Tracking with Samsonite's quarterly sales in North America, Quandl's ECI data tracks closely over the 2016 to 2019 period, with particularly strong correlations around the holidays
For those looking for insights behind the brands, holiday shopping with ECI yields strong prospects.

To dig deeper, we need to understand how Quandl’s E-Commerce Intelligence is built. ECI transaction data is structured based on online retailer cohorts identified as “malls”. For comparability over time, we can look at a set of brands or products within a “mall”.

Let’s look at ECI data for 3 luggage brands within the North American “Mall 1” over three separate time-periods in 2018.

Within Mall 1, three brands are displayed in a table. The Y-axis is 2018, Q4 2018, and Black Friday 2018. The X-axis is Delsey, American Tourister, and Samsonite. Delsey saw growth of 31.8%, 34.5% and 24.% respectively, American Tourister 73.5%, 67.0%, and 51.5%, and Samsonite 19.0%, 11.1%, and -0.3%
Looking at “Mall 1” we can see Samsonite’s growth in 2018 despite a slightly underwhelming Black Friday.

In 2018, Samsonite International S.A. reported 13% sales growth for its North American DTC channel driven largely by a 27% growth in e-commerce [3]. Our ECI data pointed to a weakening Samsonite brand throughout 2018 and this was confirmed during quarterly earnings calls. Conversely, we see that the firm’s downmarket brand American Tourister (also owned by Samsonite International S.A.) had an exceptional 2018. Importantly, ECI affords us access to this data in near-real time, well ahead of earnings reports and press releases.  This makes the data actionable: investors can buy or sell [SMSEY] based on this early intelligence on its market share and product mix.

Switching focus once more

Hearkening back to the gaming crowd, we see another powerful application of ECI’s data in Nintendo [NTDOY]. While we’ve already covered Black Friday/Cyber Monday’s broad-based impact on the gaming market, Nintendo’s data demonstrates the growing correlation between e-commerce product sales and top line revenue. Note the proximity of the two over 2018’s holiday season:

ECI data tracks closely with Nintendo's top line revenue over the 2016 to 2019 period.
With more shoppers turning to e-commerce, the correlation between Nintendo’s online sales and top line revenue tightens.

Using ECI to tunnel down to the product level, we discover that online sales of the Nintendo Switch – which accounts for two-thirds of Nintendo’s top line revenue – moves in near-unison with total reported console sales.

Looking at ECI data for sales of the Nintendo Switch, the dataset tracks almost perfectly with Nintendo's total reported sales
ECI data for the Switch, Nintendo’s flagship console, has been in lockstep with Nintendo’s actual product sales over the past few years.

The bottom line on top line revenue

For those adopting a data-driven approach, a quantitative understanding of e-commerce’s impact on company performance is a tremendous resource. Access to those insights over the course of the year, with near-real time data down to the product level, provides an extra dimension of intelligence to leverage.

Whether you’re forecasting companies’ performance ahead of quarterly reports, or deriving consumer trends in online retail, robust E-Commerce Intelligence data is available exclusively on Quandl.

Click or tap to explore Quandl's E-Commerce Intelligence dataset

Quandl’s exclusive E-Commerce Intelligence (ECI) dataset empowers investors to monitor product-level sales on a near real-time basis. With daily transaction data from over 1000 brands and 600 linked companies across 250 online stores, ECI serves as a window into financial statements and share prices for Black Friday and Cyber Monday 2019 and beyond.

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