In what could signal a new source for data centric hedge fund and asset managers, Foursquare is predicting a record weekend of sales: 13-15 million iPhones. The prediction comes from the firm's analysis using their Place Insights data tool.
Aggregating information from Foursquare app users, Place Insights is a database that records location based traffic. Reporting the company’s findings in a Medium post, Jeff Glueck, Foursquare COO, explained that their Place Insights data was showing a sharp spike in foot traffic to Apple store locations. Their analysis has shown in previous years a strong correlation between the percentage increase in store traffic to actual iPhone sales.
As seen in their chart below, in 2014, iPhone sales on their opening weekend were 3.3 times higher than on an average weekend. The data coincided with an equal 3.3 times increase in store foot traffic.
Source: Foursquare
For the current weekend, based on their early indicators from this past Friday, Glueck stated that Foursquare was seeing a 360% increase in foot traffic that they predict will result in record iPhone sales of 13 to 15 million units.
Financial data
Foursquare’s Place Insights data is reminiscent of satellite photos which emerged as a device to track retail sales growth. By tracking the usage of parking spots in malls and large stores such as Walmart and Target, traders and equity analysts are able to create models of how busy certain locations are and the ramifications for monthly and quarterly sales.
While investment themes driven by data are more common in 2015, the satellite information was one of the first examples of using ‘outside the box’ data. Featured in financial media segments such as CNBC in 2010, the satellite driven information was viewed as a potential edge for fund managers that could afford getting their hands on this relatively new type of data.
Place Insights similarly provides a solution for the financial community to analyze changes in traffic by location. Specifically within the retail sector, the data can be used to analyze changing habits among shoppers as well as understanding whether certain commercial real estate projects are under or overpriced based on traffic growth.
In this regard, among potential solutions, Glueck stated that Place Insights can be used to answer the question: “What non-financial leading indicators exist to help financial companies and portfolio managers understand future stock movement?”
Looking ahead, it will be interesting to see just how good Foursquare’s iPhone prediction is and how it affect the uptake of their data offering within the financial sector.
