Budget Cutting Threatens Retail-Friendly Government Data

Written by Frank Hayes
May 23rd, 2012

One of the most useful sources of customer and retail business information could become a casualty of the budget wars in Washington, D.C. On May 10, Republicans in the U.S. House of Representatives passed a budget package that eliminates funding for the Census Bureau’s American Community Survey (ACS), which collects large amounts of data useful to retailers under the census’s umbrella.

What’s particularly alarming about this exercise in budget-cutting theater is that data from the ACS couldn’t be accurately generated by private-sector surveys. At a time when retailers can finally sift through huge datasets cost-effectively, this one could disappear.

The defunding isn’t law yet—first it would have to survive the budget conference with the Senate (where it might or might not make it through the horse-trading process of what stays and what goes in the budget), and then it needs to avoid a veto. But whenever a house of Congress votes to end a program, it’s a serious threat.

This is not a good program to kill. The ACS, which collects information from about 2 million different households each year, gathers more detailed economic and demographic data than the every-10-year census (it’s a replacement for the old long-form census, for anyone who remembers being selected for that particular long march). The data gives a more statistically accurate picture, down to the city level, than anything else available.

That in itself is useful to retailers. “But it’s also underpinning key economic data on GDP, prices and productivity,” said Jack Kleinhenz, the National Retail Federation’s chief economist. “There’s data used to benchmark retail expenditures. If this goes away, we’re not going to get indicators of economic growth, information about workforce in local and regional economies, business climate, housing and safety. Without it, it really reduces our understanding at the national, state and local level.”

In other words, it’s the best context U.S. retailers have ever had for all the CRM data that chains collect and need to sift through. And the threat to cut it off comes as retailers are finally able to use Big Data technology to mine all that CRM data instead of having to extract samples to analyze.

That technology is now cheap, available on-demand (if you pump the data up into the cloud for analysis) and often gives near-real-time answers to questions about which customers retailers should be targeting with what products, and how. That should give retailers a better view of their business than ever before.

And now somebody wants to dim the lights. Thanks a lot, guys.


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