GHRA Announces Geolocation Data Partnership with Alpha Hat

Integrity Research

MICHAEL MAYHEW

Apr 30, 2018

New York-based independent research firm, Gordon Haskett Research Advisors (GHRA), recently announced a partnership to distribute foot traffic data provided by Alpha Hat, an alternative data platform to clients via its research.   GHRA is Alpha Hat’s exclusive sell-side partner.  The move demonstrates that resourceful smaller research firms can benefit from alternative data.

GHRA’s New Deal

GHRA’s new deal enables the firm’s fundamental analysts to access Alpha Hat’s geolocation data gathered from millions of anonymized mobile devices, representing billions of visits daily.  This data series provides real-time foot traffic at retailers, restaurants, hotels, and other consumer oriented venues.

The arrangement allows Gordon Haskett to use the geolocation data but not to resell it.  The geolocation data will supplement other alternative data the boutique has licensed: credit card transaction data (derived from a 3+ million panel), monthly consumer survey data (macro and by ticker), and proprietary pricing studies (multi sector/multi city).

In an email to Integrity Research, Director of Research John Argenti explained GHRA’s approach:  “Each new data set provides another component in the mosaic – but importantly they’re part of the fundamental process. For fundamental analysts (boutique or buyside) a huge new data set is not necessarily helpful, where we find we can add value is in not just finding and paying up for data, but having a skilled analyst manipulating and analyzing it to shed light on controversies or on our own thesis.”  The new geolocation data will be used by formerly II-ranked consumer analyst Chuck Grom.

Alpha Hat is a relatively new entrant which has begun focusing distributing alternative data in the last six months.  Two of the co-founders, Zain Hoda and Richard Lai, had worked together at Blackrock.  They were joined by a former Evercore ISI consumer analyst, Andrew McNellis, earlier this year.

The firm offers daily GPS-derived geolocation data covering 300 brands and 100 tickers.  The firm also offers daily beacon-derived geolocation data, which is sourced from in-store beacons which monitor traffic via Bluetooth, a more accurate process.  The beacon data covers 100 brands and 40 tickers.  Alpha Hat also offers web-scraped pricing data that tracks mark-downs, promotions and full ticket pricing for 20 brands and 10 tickers.

In an email to Integrity Research, co-founder Richard Lai said that the firm plans to add additional consumer-oriented datasets because “the real power of alternative data will come from investors combining datasets together.”

Unlike competitors that focus forecasting the next quarter, Alpha Hat is more thematically driven:  “We focus our efforts on bringing out thematic elements of data as opposed to focusing heavily on quarterly performance predictions,” wrote Lai.  “For instance, some of our most recent work has been in helping investors understand the benefits of the Kohl’s Amazon Partnership (is it driving traffic? are people spending time in the stores or just returning items? is traffic coming from new or existing users).”

Our Take

Before starting Gordon Haskett Research Advisors, John Argenti was COO and Director of Sales for Consumer Edge Research, which recently launched credit card transaction data offering.  GHRA is a consumer rather than distributor, but has been successful in getting its hands on a decent variety of alternative data.  By partnering with startups like Alpha Hat, GHRA has shown creativity in sourcing alternative data.

The reality is that coverage of the consumer sector is no longer feasible without access to alternative data.  Digital marketing and digital sales now dominate the consumer sector and without access to the resultant exhaust data, consumer analysts are at a major disadvantage.

Firms including Morgan Stanley, UBS, and Wolfe Research have been investing in this space for some time.  However, the implementation of research unbundling brought on by MiFID II has prompted an increasing number of firms to look at ways to differentiate their research offerings by integrating alterative data to drive better insights.