As a syndicated research analyst, I get exposed to many different resources that could be used to supplement primary market research. One of the data sources I use on a regular basis is offered by NPD. For those unfamiliar with NPD, I’d like to give an overview of this syndicated resource and its strengths and weaknesses.
What Is NPD?
NPD supplies consumer and retail information to both manufacturers and retailers. They were recently ranked 10th on the Honomichl Top 50 List. Their market coverage includes North and South America, Europe, Asia and Australia. NPD Online Research is a division of the NPD Group and uses “a pre-recruited sample of Internet representative individuals used for conducting marketing research on the Web. NPD also offers SiteSelect® sampling technology, allowing marketers to conduct random sample surveys on their own sites.”
Retail tracking is conducted at the point-of-sale and provides information pertaining to market size, market share, market trends, and pricing. With over 900 retailers representing 150,000 doors worldwide, this is a significant panel size. Consumer tracking focuses on usage behavior, consumer dynamics and shopper insights across all retail channels.
Consumer Information is primarily an excellent source for profiling customers, identifying where they shop, determining share of market, and profiling key competitors. I use NPD data when my internal clients ask questions such as:
- How has a particular category trended at the top retailers? In the overall industry?
- What is the market share for my brand? What about for my top competitors?
- What is the age & gender profile for the top brands in my segment?
Point-of-Sale (POS) Data
NPD offers a POS Data service that provides actual sales data from retailers and distributors. This service enables you to view monthly data by dollars, units, ARP (Average Retail Price) and transaction count. Having detailed access to your competitions sales and unit volumes can be beneficial when aligning a corporate strategy and more. I use NPD’s POS service to questions like the following:
- What are the top items being sold overall? In a particular category?
- What is the supply/demand for my brand? Competition?
- Is there a sales pattern I should be aware of? Seasonality? Trends over time? How is Property X tracking and does it pose a threat to my overall business?
The POS data NPD provides via Decision Key is useful and covers 80% of the market. What this service cannot provide is a breakout of sales by retailer and consumer demographics. For instance, if I want to know how Walmart and Target performed in 2012, that data is unavailable. What I do find helpful is the ability to look at line items with accuracy.
In any industry, businesses are hesitant to part with information. Access to NPD data allows companies to get a bird’s-eye-view of how the overall market is performing, and more importantly what products are succeeding and which are falling short. The information they provide includes who is buying, what, where.
Learnings from NPD Market Research can aid in making business decisions such as: Identifying new business opportunities, guide new product development, strengthen category management and understand consumer behavior and customer satisfaction. NPD is the only market research firm that offers these types of services that I am aware of.
According to the Penny Arcade Report, NPD reports “bear only a passing resemblance to what’s actually going on in the market.” When looking at the Toy/Game Industry in particular, NPD focuses only on retail sales and does not account for purchases made through digital distribution, rentals, used game sales, subscriptions, etc. With this information excluded the data presented does not portray the true nature of what is happening in the marketplace. This can be frustrating for clients.
While I understand the sentiments behind the Penny Report, I continue to find the information useful. The demographic detail is invaluable and while some pieces of the puzzle may be excluded you can still see the overall picture and observe trends that may be occurring within the business.
The primary industries NPD covers are apparel, appliances, automotive, beauty, consumer electronics, food and beverage, food-service, footwear, home improvement, housewares, imaging, information technology, movies, music, software, toys, video games and wireless.
NPD offers other services such as special reports, modeling and analytics, and custom research.
At the end of the day I think NPD is a valuable tool whether being utilized for consumer panel or point-of-sale data. I just started a new role in Primary Market Research and am excited to begin a new chapter. I feel fortunate to have experience with syndicated resources and I’ll continue to utilize NPD where applicable.