What is Alternative Data?
Alternative Data refers to data used by investors, corporations, or analysts to evaluate a company or trend that is not within their traditional data sources (financial statements, SEC filings, management presentations, press releases, etc.).
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WHO IS USING ALTERNATIVE DATA TODAY?
Top Firms in Every Industry Use Alternative Data
With 2.5 quintillion bytes of data being produced everyday by humans; it’s no surprise that market and investment research are undergoing tectonics shifts. Alternative Data is the industry harnessing this new wealth of information and insight that is transforming how businesses are making decisions.
Alternative Data Insights & Answers
Discover more about alternative data, how it can uncover powerful insights and trends in consumer spending, and how to leverage it for competitive benchmarking, financial forecasting, better decision-making, and more.
Then, find out why Facteus is leader among the best alternative data providers around — and why more investors, analysts, hedge funds, researchers, retailers, and others trust Facteus for better alternative datasets and insights.
Alternative Data FAQs
Alternative Data Meaning: What Is Alternative Data?
Alternative data describes non-traditional datasets that can shed light on consumer spending, corporate trends, new markets, bigger industry shifts, and so much more.
While traditional data can include items like financial statements and SEC filings, alternative data can cover an array of unconventional datasets from a variety of sources, including (but not limited to):
App usage
Satellite imagery
Social media and/or web traffic
As such, alternative data can be invaluable to researchers, analysts, investors, retailers, and many others by:
Revealing novel patterns, trends, insights, and relationships that traditional data simply cannot capture or divulge
Helping key decision-makers make more prudent choices, refine current strategies, and discover all-new opportunities to advance growth
Uncovering potential risks and major industry shifts before they’re widely known or on competitors’ radars
Gaining or sharpening a competitive edge within a given market or even across entire industries
To do that, alternative data insights unveil critical findings related to:
Consumer behavior: Customer shopping and spending trends can clearly emerge from transaction data, credit card data, and several other forms of alternative data. From dialing into consumer sentiment and preferences to discovering consumer spending trends by generation, these alternative data insights can help top players and companies keep their fingers on the pulse of consumer behaviors. That can fuel the ability to get ahead of demand, stay ahead of the curve, and identify potential winners in certain sectors right out of the gate.
Supply chain analysis: The transportation, logistics, and manufacturing sectors can access real-time insights into practically every point in their supply chains with shipping data, satellite imagery, and other alternative data. That can deliver game-changing awareness and understanding of bottlenecks and disruptions, as well as inventory levels, production capacity, shipment statuses and timelines, and so much more.
Company “health” and performance: Before financial statements and quarterly reports are released, alternative data sources can share useful indicators of an organization’s growth, financial health, and overall performance, both in a specific market and across wider landscapes. With that, business leaders, investors, and others can assess brand sentiment, gauge consumer interest, identify growth trends and opportunities, and better understand the “health” of a company in real time. Some alternative datasets also empower robust competitive benchmarking for next-level insights.
Bigger economic trends: Hiring trends, industry developments, and macroeconomic shifts can emerge from alternative datasets, providing a bird’s-eye view with actionable information and insights. These can be applied to specific sectors and strategies while highlighting best-fit options for wider-reaching objectives and longer-term needs.
Ultimately, alternative datasets can deliver the information, awareness, and insights needed to effectively navigate the increasingly complex landscape of the data-driven business world.
What Is Alternative Data In Finance?
Alternative data in finance describes unconventional information that is used to glean financial insights, devise investment strategies, run forecasting models, and more.
This nontraditional information can include credit card transaction data, customer spending data, online search trends, satellite imagery, and more, providing novel ways of:
Conducting investment research
Evaluating financial risks and opportunities in real time
Enhancing quantitative models, algorithms, and predictions
Devising and optimizing trading strategies
Assessing the financial health of organizations
Unpacking and harnessing the incredible value of transaction data, consumer spending data, and so much more
Notably, alternative data in finance can expand outlooks, offer novel perspectives, and enrich the decision-making process in ways that are simply not possible with traditional datasets.
What Are Some Examples Of Alternative Data?
Alternative data refers to information outside of conventional financial filings, earnings calls, investor PR departments, and other traditional data sources. As such, alternative data examples include (and are not limited to):
Satellite images: Parking lots, shipments, agricultural yields, and more can be captured in satellite images, creating a better understanding of customer spending trends, supply chains, and major industry-wide trends, like holiday shopping trends.
Credit card transaction data: Sales trends, transaction data, and spending patterns can enhance revenue forecasts, retail planning, investment strategizing, financial health auditing, and more. In fact, check out what the latest alt data reveals about Amazon Prime Day in Oct. 2023.
Geolocation data: Commutes, day-to-day visits, and travel habits can crystallize with GPS data, mobile device data, and other geolocation data.
Digital footprints and shadows: Online traffic trends, social media use, brand reviews, media features, and other data can spotlight evolving trends, customer behavior, and changing preferences. This type of alternative data may also offer opportunities for competitive benchmarking, which can be integral to setting pricing, creating promotions, optimizing customer experiences, and more.
Other data: Weather data, employment data, sensor data, news data, regulatory information, and other available datasets can add to the dynamic and ever-evolving landscape that comprises the alternative data space.
Leading alternative data providers like Facteus are at the forefront of the industry, offering the most comprehensive data panels and unmatched intelligence and insights.
What's the Difference Between Different Alternative Data Providers?
No two alternative data providers offer the exact same datasets or insights, with differences arising in:
Data types and sources: Providers can specialize in one or more datasets, with insights specific to those datasets. For example, providers specializing in satellite imagery will offer different types of data, with distinct sourcing, than alternative data providers that focus on credit card data, transaction data, share of wallet, and similar data types.
Data coverage and granularity: Regional, industry-specific, or more global data may be available from one provider to the next, with some offering more frequent data updates and more extensive datasets than others.
Data quality: Data reliability can vary with different data collection methodologies, quality assurance protocols, data cleaning processes, and more. That can mean that not all alternative data providers are offering the same level of accuracy or reliability with their datasets and insights.
Additionally, different alternative data providers can offer different tools, with their own dashboards or integration capabilities, at varying price points, backed by varying levels of industry expertise. All of that can come with varying privacy policies, different price points, and unique customer support options.
How Can the Retail Industry Leverage Alternative Data?
The retail industry leverages alternative data in several ways, gaining key insights and information to optimize offerings, operations, decision-making, strategic planning, and more. Specifically, alternative data in the retail industry can power novel or richer:
- Consumer insights, revealing customer preferences, sentiments, and behaviors
- Demand forecasting to better understand and address consumer demand, product assortment, pricing strategies, inventory, and more
- Market research and competitive benchmarking to identify opportunities to gain a competitive edge, open up new markets, and get ahead of pricing trends
- Store performance audits, with analyses on foot traffic, store layouts, customer behavior, and the overall customer experience
- Supply chain insights, with the ability to pinpoint bottlenecks, optimize logistics, better manage inventory, lower shipping costs, and more
- Customer experiences, including loyalty programs, website experiences, and other engagement to cultivate greater brand loyalty
With the right partner, like Facteus, there are more ways than ever to leverage alternative data in the retail industry and beyond, giving decision makers and companies unmatched access to real-time information when it matters most.