Alternative data has quickly become the hot new area in data science. As the world is becoming more transparent and digital, the number of virtual footprints increases, as does the availability of data. Satellite imagery, social media posts, geolocation tracking – they all make for new, exciting sources of information that contain all sorts of insights. But alternative data is still a new(ish) area in the world of data. That’s why we compiled a five question-explainer to understand the basics.
So, what is alternative data?
Alternative data is data retrieved from non-traditional, alternative information sources. It yields additional insights that complement the information users receive from traditional sources, like censuses, surveys or institutions.
It’s data that comes from literally everywhere in our digital world. Think: satellites, wearables, search engines, etc.
But it also consists of seeing old data in a new way. For example: using cable subscription cancellations as a real estate market indicator. Or measuring the amount of paper being recycled to see how much business activity is taking place in a city.
One of the benefits alternative data holds over more traditional data is its frequency. Oftentimes it is not measured once every few years, but monthly, daily or sometimes even every minute. Collecting this data allows for more dense and precise analysis, giving a competitive advantage to businesses, institutions and other decision makers.
What sources are used for alternative data tracking?
All sorts of data. Some examples of data we’re exploring include:
- Retail data about transactions in stores and on-line
- Images from satellites, aircrafts and drones
- Startups which track the most popular items
- Real estate figures about sales, leases and rentals
- Data from the Internet of Things (IoT), like sensor data and scraped data from websites
- Geo-location data, like location tracking from mobile devices
- Shipping data about vessels, volumes and positioning
These are just a handful of examples. For a more complete list, check our website.
Who can use alternative data? And why?
Everyone, really. To name a few parties:
- Investors and hedge funds can use it to better calculate and manage risks, and thus boost their investment edge.
- Journalists looking for trends and stories as soon as they start
- Citizens can make use of it to hold governments accountable for the accuracy of traditional data sets.
- Contractors can apply it to predict growth and opportunities in specific areas.
- Businesses can use it to examine consumer behaviour and preferences for goods.
- Governments can use it for policy making, climate tracking and to ensure aid is being used in the right places in the right way
How can alternative data help?
Using alternative data helps to make better informed decisions and generate deeper insights.
When you’re buying a house, you first want to investigate real-estate prices over time, the supply of houses or even the number of organic coffees sold to see if this is a neighborhood you want to live in..
When signing a contract for a new job, you first want to compare wages and labour supply for different professions in your industry.
Or when starting a business, you want to map out as much information as possible about consumer preferences for particular product types and investigate public sector trends that might affect the business cycle.
Any success stories?
Yup, plenty. Here’s a case study about business opportunities arising from shipping data:
Commercial ships across the world transmit their location hourly, generating huge datasets that are difficult to process. Suburbia turned this data into a time series, showing exactly how many ships entered certain ports at certain times. Then we drew this into a line chart.
What we learned is that there is a peak in ships entering the port of Rotterdam around November 15th, when retailers gear up for the holiday season.
Business opportunities that arise as a result include:
- Warehouse owners around the port offering deals on storage space mid-November
- Those looking to finance inventories could offer their services around this time of increased port traffic
- Companies whose goods are imported through the harbour can calculate demand fluctuations and take measurements upfront.
- Insurance companies offering insurance against delays during times of high activity and thus congestion.
This is just one example of datasets we collect, analyze and translate into business opportunities. At Suburbia, we partner with startups and corporates to enrich their data and help them understand it. From exploring commodity demand to tracking clothing sales, Suburbia helps you gain the insights you need to better engage customers. We help to deliver clean, ready-to-consume formats and visuals for companies and institutions. Like this. Or this.
The data in our systems is always aggregated and Suburbia does not work with identified data or data about identifiable living individuals (personal data).
So, do you sit on a pool of data you’d like to enrich and monetize? Let us help you. Are you looking for data to solve a problem? Let us help you find what you’re looking for, so you can make better business decisions – faster.
For more information, visit our website: http://www.suburbia.io