When doing business in countries with less stable political or economic climates, alternative data sources can provide critical business intelligence. Research suggests that alternative data sources can be extremely helpful for getting more accurate gauges of how war-torn economies are performing. You may not operate in countries impacted by war or conflict, but many emerging markets around the world regularly deal with fluctuations in their economies or inflation.
Take Venezuela, for example, which has been dealing with rampant inflation since 2016. The freefall of the Venezuelan economy has had ripple effects across the country, from increases in the number of malaria cases to residents being unable to purchase basic necessities. At the end of 2018, prices for goods were doubling almost every 19 days due to hyperinflation.
The Venezuelan government has been reluctant to publish data about inflation in the country, making it harder for people to understand what the bolívar is worth. For consumers, this situation presents an extremely difficult customer experience since products available on store shelves are often unmarked due to the speed at which the prices are changing.
While hyperinflation is not often as rampant, monitoring changes in commodity prices can help inform the economic health of an area and provide organizations with critical insights. Political stability can also be a crucial component for understanding prices and fluctuations in the market, as it impacts investor and consumer confidence. Understanding changes in stability can serve as early warning indicators for overall economic shifts.
For brands selling outside of their home countries, it is critical to understand the unique challenges every market poses due to different economic, political and cultural environments. Countries like Nigeria, Turkey and Argentina have seen significant fluctuations in the price of food in the last few years and having granular, ground-level data provides early insights necessary to stay ahead.
Monitoring changes around the world can help organizations have a more accurate gauge on consumer sentiment, helping them develop better and more targeted strategies. As international markets grow due to increasing purchasing power and consumer demand businesses need to stay competitive, and pricing is a central component in that battle.