“Every time an item is purchased in the supermarket, drug store, department store, or any merchandising outlet using a scanner, there exists the potential for collecting market data.” So says a good study of syndicated data by Heather Bowyer, Kristin Cashman, Paul Laubscher, and Sarah Thomas under the direction of Professor Raymond Burke at the Kelley School of Business of Indiana University.
Syndicated data is taken by a service provider compiling a database of individually scanned transactions from thousands of purchase locations. This data is then manipulated by marketing managers and professionals through the use of statistical packages. This “syndicated” data is then provided to the marketing manager by either a direct network connection or a modem dial-up connection which are leased from the syndicated data provider, the study explains.
SmartDrill [http://www.smartdrill.com], a good technical consulting firm, says many firms which purchase such syndicated data to overlay on their proprietary databases try to use a variety of syndicators “on a rotating basis, in order to keep each syndicator hungry.” They question the wisdom of this strategy, saying that “some syndicators’ data is actually better than others, such as having less missing data, particularly for certain product or service categories.
Plus, using the same syndicator over a period of time, “you can often get discounts on overlays. They also get to know you better, they can be more helpful with their advice, and they tend to be quicker to fix errors and go the extra distance for loyal customers,” SmartDrill says.
Syndicated service providers collect data from all over the country, but not “every transaction that occurs in every outlet,” the Burke study says. “Service providers establish specific data collecting regions, which are representative of total U.S. demographics and then combine this regional data to form a database consisting more than 2700 sample stores, 95,297,800 households, and a population of over 257,786,500.”
The Burke study explains that each service provider collects sales data independently, and that “typically, a merchandising outlet will contract with a single syndicated data provider. Often the merchandiser is required to sign an exclusivity contract. Therefore, to determine national sales figures for specific products or categories, a complex algorithm designed by each provider projects national sales volumes using the regional sales scanner data previously collected.”
As might be expected, syndicated data’s not cheap, but “affordable to most corporations who place a priority on effective marketing,” the Burke study concludes. It’s worth the cost, they say, since “using the statistical packages leased from a service provider enables marketing managers to track the sales of individual products nationwide or in specific regional or individual markets. This data can also be analyzed on the whole or broken down by individual retail outlet, tracking the effects of promotion, couponing, and advertising, as well as the competition. Syndicated data can be compiled on an annual, quarterly, monthly, weekly, or in some cases daily basis, with comparisons to previous periods available.”
The advantages of syndicated data are easy to see. “This is almost as good as having your own in-house marketing database, and at a fraction of the cost,” SmartDrill says. “And in some respects,” they add, “this data can actually be better than data in a proprietary marketing database, because you get information on competitors’ customers as well as your own.” The data is usually available in formats that allow easy importing into statistical and data mining analytic packages.