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NPD Group signs deal on market research at Sam's Clubs

A Sam's Club in Medford. (May 23, 2010)

A Sam's Club in Medford. (May 23, 2010) Credit: Bruce Gilbert

The NPD Group, a Port Washington-based consumer research firm, has signed what one executive called a “barter arrangement” with retailer Sam’s Club to analyze sales data right from the checkout scanners.

Under the deal signed Oct. 2, NPD would look for trends in what consumers buy -- “point of sale” data that can go as “granular” as the size of television screen, said Tod Johnson, NPD chairman and chief executive.

“They want to know what features people are buying on TVs, what are the most popular types, like the size of the screen, what type of connections they have, are they computer ready,” he said.

“All they can do on their own is see their own sales, but they want to understand their performance relative to all the other retailers in the United States.”

In return, all this data is added to NPD’s market research, boosting the value of its reports, which are bought by manufacturers and other businesses, Johnson said.

For NPD, the Sam’s Club deal is just one example of how the sluggish  economy has been kind to market researchers.

Johnson said many retailers rely increasingly on market data to beef up revenue. The point-of-sale service, which NPD began offering 30 years ago, is now the bulk of the company’s $250 million business, he said. Revenues from this service grew by double-digit percentages in the past year, faster than the company’s growth as a whole, he said.

“What’s going on at Sam’s is a trend we’re seeing with more and more retailers as they all get bigger and more competitive,” Johnson said.

Take Walmart, owned by Sam’s Club parent, Wal-Mart Stores. Wal-Mart ended point-of-sale services with NPD and other market researchers 10 years ago, Johnson said: “They decided they did not need this information and now they’ve reversed that decision.”

Talks between NPD and Walmart began this past week, he said.
To cope with the bigger workload, NPD hired about 150 employees in the past year, most of them on Long Island, Johnson said. In the next 12 months, he said, they’ll add another 100 to 150.


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