NPD, a retail sales tracking service, is the go to source for understanding toy sales and consumer behavior. That’s why I have found their end of year reporting on 2012 to be so confusing. NPD reported toy industry sales for 2012 as 16.5 billion. That’s okay until you realize that 2011’s sales were reported by NPD as $21.18 billion.
To find out where the 4.68 billion dollars went I turned to Juli Lennett, President of the Toys Group at NPD. She was kind enough to answer my questions.
Richard: So Julie, where did the $4.68 billion go?
Juli: A couple of things happened.
First, the 2011 sales that were reported last year came from NPD’s Consumer Tracking Service which reports on 100% of toy industry sales. The 2012 sales that were reported came from NPD’s Retail Tracking Service (POS) which measures about 80% of toy industry sales. This change in data sources accounts for the majority of the difference between the two numbers reported.
In addition to the different data sources, there have been some changes as to what categories we are measuring within the Retail Tracking Service versus the Consumer Tracking Service. Within our Toys Retail Tracking Service, we are not including the sales of Crayons/Markers/Pencils/Chalk or School Supplies. These categories are reported within our Office Supplies Retail Tracking Service. However, we did measure the sales for these categories in our Consumer Tracking Service in 2011 and we continued to include their sales through the December 2012 reporting period. This shift in the categories reported also accounts for some of the variances between the two services.
Richard: Why did NPD decide to change how it collected and reported toy industry data?
Juli: NPD hasn’t changed how we’ve been collecting and reporting on toy industry data, we’ve added to it!
We will continue to collect information on the toy market via our Consumer panel, which has been the only source for toy market information over the last ten years in the U.S.
And now we’ve added a Retail Tracking Service that will accurately capture point-of-sale information for the toy industry representing approximately 80% of all toy sales from a variety of major toy retailers.
We can now provide manufacturers, licensors and retailers the best of both worlds—accurate item level sales as well as demographics and purchase dynamics across 98 toy categories. These two data sources together can help the toy industry maximize product assortments, fine tune pricing strategies, as well as provide information on who is buying toys and for whom so the whole toy industry can make more informed business decisions.
Richard: Are the new NPD processes more accurate or just different?
Juli: NPD now offers two distinct sources of information that monitor the toy industry. Each has its own unique benefits and, together, offers a complete view of the toy industry.
NPD’s Retail Tracking Service captures POS information from all the major toy retailers, brick & mortar and online. It is unparalleled in providing accurate item level sales with more precise actual price paid. The Retail Tracking Service is the best source for understanding what items are being sold at retail as well as understanding trends at the brand, license, and category and manufacturer level. It represents approximately 80% of the total toy industry sales.
NPD’s Consumer Tracking Service captures consumer reported sales as well as the dynamics behind the toy purchase. It is the best source for understanding where the purchase was made by individual retailer as well as channel, including the online channel. It is also an excellent source for understanding the demographic and purchase dynamic information behind the toy purchase. For example, our clients can get a better understanding of who is purchasing the brand/license/category (age/gender, mom/grandma), who they bought it for (child’s age/gender), for what occasion they purchased it (Christmas, Birthday, no reason, etc.) and why (the child asked for it, impulse purchase, etc.). NPD’s Consumer Tracking Service is weighted and projected to represent 100% of the total toy industry sales.
Juli Lennett, President – U.S. Toys, has spent the last eight years at NPD managing client relationships and consulting to a variety of manufacturers, licensors and retailers within the toy industry. By combining unique data assets with unmatched industry expertise, Juli and the toy team help clients track their markets, understand consumers, and drive profitable growth.
Most recently, Juli helped launch the Toys Retail Tracking Service at NPD which provides information on product movement at the point-of-sale. Juli now manages the Toys business at NPD. Prior to her experience at NPD, Juli spent eight years in various kids’ industries, including Scholastic, where she was Director of Marketing & Sales for their edutainment software group for six years.