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04/27/2021

NPD's deeper dive into DIY

The NPD Group rolls up its sleeves for home improvement insights

It’s a recognized fact: Home improvement is a leading cause of statistics. And piling on to that concept are the new data collection efforts from Port Washington, N.Y.-based NPD Group.

The Port Washington, N.Y.-based research company has bolstered its home improvement emphasis, partly through the acquisition late last year of the retail analytics firm Pricing Excellence, and partly through what the company describes as constant vigilance in the realm of data points–some points are less obvious than others.

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In an interview with NPD executives, topics ranged the Oakland A’s data-driven manager Billy Beane to Hungarian vitamin-researcher Albert Szent-Gyorgyi. Beane was a guest speaker at a recent NPD event; and Gyorgyi delivered the famous line: “Research is to see what everybody else has seen, and to think what nobody else has thought.”

The interview also hit on practical home products, such as irons, which have experienced a sudden demise of sales. Several reasons are at work. People aren’t dressing up as much. People are working from home in comfortable knit shirts. And also, the technology of wrinkle-free weaving is having some kind of an impact.

“If you’re in that market, you want to know exactly what’s going on and what you can do about it,” said Perry James, NPD’s president of new business development. "The answers often lie below the surface, and beyond the obvious connections."

a man wearing glasses and smiling at the camera
Joe Derochowski, Nathan Krol and Perry James.

Irons are just the hot tip of the consumer product iceberg. And to help bring understanding to multiple industries, NPD brings insights from retailers’ POS data, supported by credit card data and web-scraping capabilities. The company collects POS data from more than 600,000 doors around the world, and a proprietary product called Checkout reviews actual purchase receipts from more than 130,000 active, opt-in consumers.

“We feel that this is a next-generation data collection vehicle that will be valuable in this industry,” said James. “Not only will it reveal what was purchased, and how much was purchased, but also a lot of the consumer insights about the purchase.”

Pricing Excellence has been in the home improvement space since 2017, and founder Nathan Krol, a former Stanley Black & Decker executive, has brought his proprietary data collection techniques to NPD through the acquisition. “We’re data hungry,” says Krol, who is VP of Pricing Excellence at The NPD Group. “Essentially, we’re looking at as much data as we can get our hands on.”

Customers aren't sitting there saying 'Where do I want to go shop?' They're saying 'I need to do this.' It's always about helping the consumer get the job done."
Joe Derochowski, NPD Group

While Home Depot is the biggest player, “It’s not the biggest in every category,” says Krol “We're collecting data rom sources that provides insight on every aspect of the business, big and small, leading and emerging.”

Alongside the details, NPD combines big picture analysis. NPD’s multi-sector vision looks over $2 trillion in spending across 20 industries.

“Industries that grew during the pandemic, grew because of three things,” said Joe Derochowski, NPD vice president and home industry advisor. “We’re eating and living more at home. We’re working more at home. And we’re looking to keep ourselves active and entertained.

“Guess what? Home improvement fell into that last category—big time."

Diving deep into data reveals not only what is being bought and sold, but the timing, says Derochowski. For instance, when a homeowner buys three major appliances, that’s an obvious kitchen remodel. But what comes next, and in what order?

“Typically, consumers buy lighting the same day. Thirty days later they buy small kitchen electrics. After sixty days, they buy housewares. Ninety days following those original major appliance purchases, they buy floorcare,” Derochowski said. “By understanding sequencing, retailers and manufacturers can better connect with the consumer to help provide a full solution to their needs."