Consumer spending accounts for 70% of the US economy, representing some $16 trillion in annual spending. Not surprisingly, big retailers like Walmart and Target, along with CPG companies like P&G, Kraft and General Mills spend billions of dollars on market research to better understand shopper behaviour and market share trends.
Up until recently, research companies like NDP and IRI, now combined into one $1.5 billion revenue company Circana by private equity firm Hellman & Friedman, use traditional research methods, like checkout scanner date or consumer panels to fullfill the research needs of these industries. One company is out to change that dynamic.
Datasembly Founder and CEO Ben Reich.
Datasembly, a Washington DC metro area company founded in 2014 by Ben Reich and Dan Gallagher, to provide real-time, hyper local consumer spending data for every product in every store. This founder’s journey is based on my interview with Datasembly CEO and founder, Ben Reich. Co-founder and former CTO Dan Gallagher now serves on the board and is not involved in the company’s day-to-day management.
“My co-founder and I were both software engineers at a retail analytics firm in the DC area called Applied Predictive Technologies (APT). And it was there that we started to hear some of these stories, even from some of the biggest players, about sending people physically into stores with clipboards, to walk up and down the aisles, to try to collect data and extrapolate, to understand their own prices, let alone competitive pricing,” says Reich.
According to Reich, manufacturers were relying on these really broad aggregates of data to divide national unit dollar sold by national unit price and then back into their calculations for average price. Meanwhile, most people in the business knew just how granular these factors are in market. “It was patently ridiculous to start making multimillion dollar decisions for the big retailers, and CPGs based on these kinds of large aggregates that provide a 12 week rolling average over a metro area. It’s sometimes worse than useless because it could be so misleading about the actual dynamics that are governing shopper behaviour,” says Reich.
The increased thirst for this sort of information coupled with the rise of click and collect pickup or local delivery at the time exposed this detailed, store level pricing data. And though that information is publicly available, collecting it, processing it and finding the insights off of it at scale is an incredibly difficult technology problem that Reich and Gallagher set out to solve with the founding of Datasembly.
Neither had any experience starting a business or raising funds, learning as they progressed. They were fortunate to attract a few key customers at the outset who were forward thinking enough to see the value of what they were trying accomplish, providing the funds to keep the business afloat in its early days. Many of those companies remain customers to this day.
Datasembly’s proprietary technology collects billions of grocery and retail product records from hundreds of thousands of locations every day. Data includes pricing, promotions and assortment information for both online and brick and mortar retailers, providing clients with insights and competitive information for real-time product transparency. The company’s vast database collected over several years provides the opportunity to identify trends.
“Another important element to add here is, we've been building Datasembly now for seven years. This means that the historical corpus of information that we're building on continues to grow as well. So we have over a trillion historical data points over the last seven years. And that data is ever-expanding as well,” says Reich
In addition to its paid data access services, Datasembly aggregates this data into a free, publicly available data tool that provides live pricing, promotion and availability across major grocery categories and thousands of products through its website. This data attracted national attention when it provided data behind the emerging story in April of 2022 of the crisis in availability of baby formula, showing out-of-stock, availability and pricing data down to the metro level. The data was not only broadcast in on every news program, the government even turned to the data to help them manage the emergency.
It’s pricing data also showed the dramatic rise in food prices across various grocery categories and highlighted the run up in egg prices across the country, which also drove the news cycle. “We have an up-to-date pulse on those trends with a level of granularity and recency that really no one else has. You could see inflation rising in real-time. We even break it down by by some of the regional breakdowns, like urban versus rural or state by state or category by category, to really understand how an incredibly important trend like inflation is actually hitting shoppers,” says Reich.
Today, Datasembly’s completely distributed workforce of over 75 employees work with most of the major players in the CPG, grocery and retail space. According to Reich the company has experienced at least 50% year-over-year growth over the past six years. “If the last couple of years have proved anything, it's that price, promotion, assortment availability and out of stock dynamics are more volatile than they ever have been. There's a real need for shoppers, manufacturers, retailers and every part of the supply chain to track these things with more granularity and recency and usability to drive efficiency,” says Reich.
As a result, the company has raised $31.5 million in venture funding to date, with its most recent $16 million raise on May 23, 2023 led by Noro-Moseley Partners. Additional investors include Valor Siren Ventures, Craft Ventures, Twenty 5 Twenty, Evan Brown and Launch Capital, along with other investors.
Reich grew up in Queens, New York. His mom was a nurse. His dad was a public school English teacher. “I grew up with a real passion for technology. I learned to code at a young age and was always drawn to the world of technology and software development and computer science,” says Reich. He attended Cornell University where he studied math, linguistics and computer science. After graduating Cornell, he went to work for APT where he met his future co-founder Dan Gallagher who had also graduated from Cornell. “Dan is one of the most brilliant software engineers alive, I think. And it was actually Dan who approached me that maybe we could strike out on our own and do something interesting here,” says Reich.
As for the future? “I'm very proud of the customer base that we've assembled. We have a massive green field of opportunity that we haven't yet tackled. We're seeing our solution and our biggest customers continue to scale. We have incredible retention, and our customers love us. And we think that we're going to be able to really capture the market for these sorts of critical insights,” concludes Reich.
