It’s time to get smarter with data to inform investment decisions

Every second of every day, each of us creates 2MB of data, adding up to 2.5 quintillion bytes per person, per day. 90% of the data available to us now was created over the last two years. With this abundance of information, it’s incredibly valuable to be able to cut through the noise and understand what is really happening in the markets... and understand the reasons behind these trends.

And for investors and those in the financial sector, this is truer than ever; better insight could mean the difference between a bad investment and one with a sustainable return.

The benefits and strengths of panel data for investors

Traditional data sources used by financial analysts might include a company’s financial results announcements and press releases, but these have their limits – using inconsistent time periods and relating only part of the story. Alternative data sources based on real consumer behaviour can complement and enhance these, giving a true view of not only what is going on in the market – how retailers and brands are performing – but also, crucially, the reasons behind that performance.

Based on over 100,000 nationally representative panellists reporting every item they purchase, Kantar’s alternative data illuminates top-line market trends, and retailer and brand performance down to granular detail on individual products, categories and SKUs.

This breadth of information removes the bias seen in traditional EPOS methodologies, where different retailers and brands allow varying levels of transparency. It also removes the challenges with credit and debit card methodologies – resulting from consumers owning multiple cards with different issuers and joint accounts. Bias may also be present in terms of ‘data sources available’; using Kantar data driven by consumers’ actual spending and consumption behaviours removes this bias, providing a true view of performance without the quirks of mixed methodology solutions.

A granular view for better investment decisions

A clear understanding of an individual retailer or brand’s performance removes the skew shown by analysing data at sector or total market level. In the fashion market for example, sector performance masks underlying retailer growth trends. So whilst a sector may be growing, in some cases this is fuelled by only one retailer, and in other areas the decline of a whole sector can be caused by a handful of poorly performing players. Understanding not only the top line, but performance at a brand and retailer level, allows investors to make the best possible decisions.

The ongoing continual collection of purchase data from our panellists also allows a better understanding of the drivers behind a retailer’s performance. Taking a recent example of Arcadia, our data uncovers the long-term trends that influenced the retailer’s performance, giving an insight into its future potential. This principle can be applied to a broad range of investment decisions, giving the information needed to make a qualified assessment of the long-term viability of a retailer, brand or market.

Our panel data from 2018 and onwards clearly laid bare the challenge Arcadia was facing. Whilst on the surface, it was declining at the same rate as the wider market and therefore holding market share, this was a result of average prices increasing. Looking deeper, it was clear Arcadia’s customer base was shrinking and those who remained were shopping less often. These two trends were ones the retailer couldn’t reverse, and whilst average price increases helped to offset some of these challenges in the short term, it may well have exacerbated shopper attrition.

In this case, while company reports would have shown the performance out of context of the overall clothing market, and other data sources may have pointed to Arcadia’s performance declining at a similar rate to the overall market, only consumer panel data could have illuminated the underlying factors at play – and that customers had started to turn away from the retailer more than five years prior.

Find out more about how our City Research capabilities can help you to make better investment decisions and get in touch with one of our expert team. 

Questions we can answer: 

• How are retailers performing between official results publications?
• Which categories are shoppers moving spend to – where is the opportunity for investment?
• What is driving performance in a sector, market or retailer? 
• Why is a certain retailer or brand declining, and do they present a viable target for acquisition or investment?
• What are the implications of changing consumer behaviour, and how does this affect the long-term outlook for particular markets and brands?
• How likely are penetration shifts in retailers, industries or categories, and what is the implication of this?
• Who is currently ‘winning’ and ‘losing’ across all categories and why?
• How is spend moving in the market, who is winning spend from competitors, and who is losing?
• How stable are the main categories and products focussed on by particular retailers and brands?