Our Investment In Datasembly
Structuring the Unstructured World of Grocery, Retail, & CPGs
Every single day, retailers around the world receive millions of items that are eventually stocked on their shelves. Over the last decade, the migration of in-store pricing information for these items to the web has also accelerated. For grocery chains, this migration comes, in large part, from the retailers’ need to be seen as competitive and transparent online. In doing so, they have allowed shoppers to check in-store and localized pricing, en-masse:
“Can I get my favorite brand of breakfast cereal AND my favorite brand of salsa at the same store? Which stores have both items and at the cheapest prices?”
In a related problem, consumer package goods (CPG) brands spend billions of dollars on promotional marketing to sell their products to these consumers every year. Yet because of a lack of real-time data, these brands don’t have the ability to adjust these pricing and promotion decisions in real-time, meaning hundreds of millions, if not billions, of dollars are also lost.
Even in today’s data-driven society, major retailers and brands struggle to answer simple pricing questions like:
- Where or when is my product sold? How do prices vary across location?
- What is the everyday price of this product on the shelf? How is it priced on promotion?
- What is my competition stocking and how are they pricing it? What did their prices look like during last year’s Thanksgiving season promotion?
To the uninitiated, these pricing concerns may seem trivial, but it is important to remember that CPGs, QSRs, and grocery companies are all high volume and extremely low-margin businesses (even when only considering gross margin). As a result, tiny price fluctuations in either direction can have an enormous impact on profitability.
Despite the fact that this localized product and price level data is now entirely publicly available, it is often intractably difficult to collect, clean and use. Historically, this industry has hired pricing consultants to do things like manually walk the aisles with a clipboard to jot down a small sample of prices and extrapolate reports off them. Even though these insights are infrequent and prone to human error, consultants and agencies charge millions to retailers and brands alike, for whom there have been few alternatives.
Mercifully, Datasembly is here to change all of that.
Datasembly empowers retailers and brands to make data-driven decisions about pricing and promotions. They collect hundreds of millions of pricing records across every major store and every major brand across the web every single day. Their platform then processes, compares, and contextualizes these prices via an easy to use dashboard and visualization tool — helping pricing strategy teams easily understand and react in real-time to the performance of every one of their products, across every location, every single day.
Some of their solutions have helped a major brand understand their share of voice in promotional circulars around the country. They have helped a major CPG recoup hundreds of thousands by identifying mis-pricing across a single retailer’s multiple locations. They’ve also helped their clients understand potential distribution issues and track the duration and scope of out-of-stock items to inform better demand planning. As a result, they’ve built partnerships and developed paid pilots with the likes of General Mills, Pepsi, Dunkin Donuts, Starbucks & more.
Understanding pricing and ensuring compliance also helps retailers keep out of the cross-hairs of lawsuits and the FTC. Over the last several years, a wave of nearly 150 lawsuits have blanketed the retail community, alleging that 80-plus retailers deceived consumers through their price advertising practices.
CEO Ben Reich and CTO Dan Gallagher founded Datasembly together after working together as early engineers at the retail analytics firm Applied Predictive Technologies (acq. in 2015 for $600M by MasterCard) and later went through 500 Startups’ Batch 14. Together, they bring a tremendous amount of founder-product and founder-market fit to developing Datasembly. Given that they’ve also collected and cataloged this pricing data for over two years, they’ve surrounded themselves with a powerful moat, as they are the only vendor to be able to provide true historical context, at a zip-code localized level, to best inform pricing strategies even to the largest retailers.
While founder coachability isn’t a trait investors often talk about, for us, it was another reason we became remarkably excited to work closely with the Datasembly team. In Ben and Dan, we saw tremendous talent and potential, an admirable humility despite all their success to date, and — perhaps most key of all — a high-level of intellectual honesty. To Ben’s extreme credit, he understands what his team excels at, and at the same time, does not shy from speaking up whenever and wherever he wants more assistance, perspective, or guidance.
Speaking for myself and our venture partner Stefan Pepe, who led this deal for LaunchCapital and will be joining the co-founders on their board, we are really looking forward to helping Datasembly on their journey.
Our thanks to Phil Nadel at Forefront Venture Partners for initially connecting us to the Datasembly team. If you believe, as we do, that better data insights will drive better decision-making in the grocery, retail, and CPG world, come join the Datasembly team and help make it happen!