This is perhaps the most widely used buzzword in the business world today. It is also something no company can efficiently function without. If you happen to be the head of your own firm, you will realize that you spend the better part of your day dealing with data.
Data for business comes in all shapes and sizes. Right from historical sales record to the feedback your consumer give, it’s all important information capable of actionable insights. While your BI program might be working wonders for your company, there is a new buzzword in town called Alternative Data which is disrupting data analytics.
Alternative data is catching a lot of attention from data analysts and companies. It can be typically defined as the form of data drawn from non-traditional data sources. When this data is combined with traditional data during analytics, they yield additional insights. These insights enhance decision making and complement the information you receive from traditional sources.
Initially, the number of data sources a company could use to drive business decisions were limited. The majority of decisions were based on internal business data and research reports brought from market research companies. This data was extremely helpful but sadly didn’t give a complete picture of the potential business opportunities.
That’s where alternative data comes in. It collects data from non-traditional sources and correlates it with other data sources to come up with useful insights.
Suppose you are the CEO of Starbucks and are planning to expand by opening an outlet in a new location. How do you find which location is most viable for your outlet? Initially, you would have been wise to go through the market research reports, but in today’s time, everyone has them. Where is your cutting edge strategy? Let us help you a bit.
Here are a few alternative data sources companies can use to make better decisions. Identify which sources you can leverage as a Starbucks CEO can use to identify the viability of a new store.
- Measure the amount of traffic in an area: The explosion in the number of mobile devices has made it possible to measure the traffic in a particular location.
- Advancements in satellite imaging technologies have made it cheaper to access high-quality satellite data. Companies can now analyze these images to make better business decisions.
- Leaps in image processing technologies provide speedy and easy image analysis today. The analyzed images can reveal the density of people in a particular location. Retailers like to use this data when expanding to new location
- The amount of user generated content on social media websites and other websites has increased exponentially over the last few years. This data is particularly interesting for consumer companies to understand what the customer really wants.
- Advancements in sensor technologies have made it cheaper to get weather information and location data. You can predict whether conditions which certain accuracy by analyzing sensor data. There is a ton of applications for this data.
- The volume of online transactions has increased exponentially. Transaction data allows companies to better understand the consumer’s purchasing power.
- Public internet data is now easily accessible. Data as a service (DAAS) providers like Datahut eliminate the technical barriers to obtaining web data. In turn, helping analysts to be more productive.
Going through the above alternate data sources, it is easy to figure out the best ones which can benefit your business. In our Starbucks CEO’s case, assessing the mobile traffic data and the foot fall rate of the potential locations can enable him to make the best decision to open a new outlet. Combine this data with the already existing demographics, the most appropriate places can be shortlisted.
For any further queries on alternative data, contact us at Datahut, your big data experts.