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Discovering Emerging Brands With CE Vision

In this Insight Flash, we use CE Vision to:
  • Find the fastest growing companies of different sizes for potential investment or partnership opportunities
  • Compare historical sales for a subset of fast-growing companies within an industry or subindustry
  • Evaluate the geographic concentration of an emerging business

One of the most common use cases for data products is trying to find the “next big thing” that is capturing consumer interest.  Private Equity companies and Venture Capital firms are looking for potential investment opportunities to add to their portfolios, but corporations are interested in this information as well in order to source future mergers and acquisitions or to find partnership opportunities for business development.  CE Vision contains several tools to help identify and evaluate the potential of over 7,000 brands, with the ability to filter by business size and industry/subindustry.

The Discover dashboard is the first step in most emerging brand explorations.  Discover displays y/y growth in sales or transactions for the last three periods of data (with period length specified by the user), along with acceleration/deceleration between the last two periods.  Sorting on these metrics can highlight the fastest growing brands, and the dashboard provides the ability to filter by brand size (based on spend or number of transactions) as well as industry/subindustry.  Looking at the most recent 35 days of data available, different brand size thresholds show very different trends in which companies are growing the fastest.  Among small brands, niche apparel names such as Brave New Look and Just My Size saw the strongest growth, as well as financial services companies such as Acuity Insurance, Stash, and Bright Health.  Among mid-sized brands, Samsung’s DTC business has shown the largest growth, followed by more financial services companies such as Morgan White Group, TaxAct, and Allianz.  Among larger brands, e-commerce generalist ShopHQ saw the biggest growth, followed by tax preparation services TurboTax and H&R Block, and Zoom.  We note that the large growth in tax preparation is likely due to the shift in tax filing deadlines.  For each different business size, these are the up-and-coming names that investment/business development teams might want to begin investigating.

Discover

Note: Y/y sales growth for the 35 Days Ending 8/4/2020 vs. the year ago 35-day period; Small brands had between 105 and 999 transactions in panel in the 35 Days Ending 8/4/2020; Mid brands had between 1,000 and 9,999 transactions in panel in the 35 Days Ending 8/4/2020, Large brands had 10.000 or more transactions in panel in the 35 Days Ending 8/4/2020; DTC sales only; Brands with known fundamental issues excluded.

To dig deeper into a set of companies and evaluate a longer time series, assess seasonality factors, and break growth down into number of transactions vs. ticket size, investment and business development teams can use the Brand Comparison dashboard.  Digging into recent success for small Casual Apparel companies, we find that the high growth for Brave New Look and Just My Size are off of very small bases last year.  LA Apparel and Vida sales peaked in early spring, possibly seeing a temporary boost from stimulus checks, while swimwear brand Carve Designs saw spend ramp up through the beginning of summer before receding more recently. 

Brand Comparison

Of course, high growth can be driven by several factors.  One important thing that investors and companies looking for partnerships want to assess in potential targets is whether they can add value through a relationship.  One major way to add such value is by helping a brand expand its geographical footprint.  CE Vision allows users to see how concentrated a brand is geographically to see if such an opportunity exists, or if a brand is conversely so concentrated that it might not appeal to consumers beyond its primary market.  A time series of this geography breakout can also show how different brands have fared in states closing/reopening due to the COVID-19 pandemic.  Digging deeper into the casual apparel brands, it is clear that Aviator Nation has been heavily concentrated, with almost half of its transactions coming from California shoppers.  Carve has wider appeal, with only ~12.5% of transactions coming from the top state (interestingly also California).  Additionally, the company is less exposed to simply where there’s the heaviest population – Carve’s second-heaviest concentration is in North Carolina.

Geography Breakout





Note: % of transactions from each state based on cardholder location for the 35 days ending 8/4/2020.