Michael Mayhew, Integrity Research
Feb 08, 2018
Last week, New York based independent research firm Consumer Edge Research, announced that its alternative data arm, CE Insight, is rolling out a unique credit / debit card transaction product – a service that is likely to become a cornerstone of the firm’s alternative data offerings in the future. The new suite of three services, a result of two years of work, provides granular transaction data from 15 million active credit and debit cards on a daily basis collected from hundreds of credit card issuing banks and processors.
These three product tiers include: CE Transact Raw: A daily feed of all individual transactions at the unique card level allowing clients with data science teams to do their own tagging and panel building, but also leveraging CE’s tagging and other competitive advantages. The database also includes demographics and is linkable to 3rd party databases CE will roll out in the future at the household level. CE Transact Query: A fully cloud hosted solution of CE Insight’s fully cleaned database of credit and debit card transactions for 1250+ brands/300 tickers, CE’s already constructed panels, and access to CE’s query library or the users own custom designed queries. Demographics are also included in this service. Clients can drill down by granular geographies, individual transactions or cohort analysis to figure out the key drivers of a company’s growth, which brands is a company gaining share from/losing share to, what is the churn among subscribers, cross shopping by brand, what is happening at specific store level etc. CE Transact Daily Signal: A service which provides aggregated daily sales and transactions for 1250+ brands/300 tickers with WTD, MTD and QTD stats updated daily.
At first glance, it seems a little strange that independent research firm, Consumer Edge Research, has jumped so aggressively into the alternative data space. However, this should come as no surprise to anyone who knows founder Bill Pecoriello and his background. Bill, formerly an analyst at Sanford Bernstein and Morgan Stanley, has always taken a data driven approach to his research. Consequently, when Bill started Consumer Edge Research nine years ago, he created a research firm that is also very data driven. This led him initially to set up Consumer Edge Insight, which initially specialized in conducting custom survey work for his analysts and for buy-side clients.
This eventually prompted the firm to strike an exclusive deal to market the restaurant data service Black Box Intelligence in 2011, and last year announce their deal with Prosper Insights and Analytics. However, the launch of the three new CE Transact Services represents a new level of commitment to the alternative data space as CE Insight has sourced and collected the transaction data themselves from hundreds of banks and credit card processors to ensure they have a panel with no geographic holes or consumer opt-in bias. They have also scrubbed the data, tagged it, and back tested it to determine which tickers have the strongest signals. In addition, they have applied rigorous compliance checks of the data, stripping out all PII and adopting the differential privacy framework to mitigate the ability to reverse engineer consumer identities from the transaction data.
As a result of these steps, CE Insight has built three specific products for three different types of data customers, including large asset managers with extensive data science teams; fundamentally oriented buy-side analysts with limited technology infrastructure who want to be able to conduct deep fundamental analysis; and, generalists who want to simply track aggregated sales data by ticker. Besides offering three very interesting new transaction oriented products, we find this product launch to be quite telling as CE Insight is likely to roll out future data services taking a similar approach, as well as launch new datasets which can be easily linked to their transaction data like geolocation data, satellite data, online consumer search data, etc. To our way of thinking, CE Insight’s launch of its new Transact services has clearly heralded the arrival of a serious new player in the alternative data space.