Since the 1990s, these and other branding questions have been answered in part by a combination of tracking retail shelf movement from mass merchandiser outlets, plus surveys of do-it-your-selfers consumer purchasing behavior (panel data).

Additionally, savvy companies might regularly conduct a consumer Usage and Attitude Study, to see if share trends seemed to be tracking end-user behaviors. The combination of these data sources can help keep a brand at the forefront of market knowledge, and ahead of its competitors.

For the past 11 years, the lubricants industry largely used Automotive Aftermarket Industry Monitor (AAIM) data for the retail side of this work. Developed under the auspices of the Automotive Aftermarket Industry Association and the Port Washington N.Y.-based market research firm NPD Group, AAIM data was the industry standard for tracking DIY markets for a wide variety of categories. Until recently, many lube manufacturers relied on it for industry-accepted market share numbers and the volume size of tracked categories.

Starting in 2001, NPD initially provided quarterly, then monthly and finally weekly shelf movement data. Geographically, it moved from reporting the data nationally to having assigned regions, all based on industry demand for more finite information. Throughout, NPD was guided by AAIAs Data Work Group and Category Management Committee to set category hierarchies and to resolve any data issues or discrepancies.

On the positive side, the expanding service allowed for data to be provided not only for key industry categories – like motor oil, filters and various additives – but also for categories that never had this type of information before, like individual performance chemicals. Manufacturers were able to purchase industry-accepted information for numerous categories, thanks to AAIM data.

Exit Retailers

The downside was overexposure of brands within categories; in areas or regions where certain brands dominated, there possibly was too much information on individual brand volume movement. Additionally, individual retailers might risk exposure in the same manner, especially where one retailer was dominant.

Eventually, the downside outweighed the benefits. As Aftermarket News reported this March, NAPA [the national auto parts store chain] made the decision to stop sharing hard parts and commercial data with AAIM. NPD and AAIA worked to ensure other retailers would stay aboard, but as Aftermarket News noted, these groups were unable to agree on a solution that would allow AAIM to collect and report the source information necessary to continue a total store reporting model. With no retailer solution in place, NPD had to suspend its data reporting after Januarys data was delivered.

NPD executives now are bringing the industry a new shelf movement data system that aims to reset prior data and set shelf movement data going forward. On July 2, it revealed it announced the launch of its Retail Tracking Service, a replacement for the original AAIM data. The new program will collect data from 25,000 stores across the mass and automotive specialty channels. These stores include Walmart, the worlds largest retailer. This fills a much-needed gap, as NPD went without the mass merchandisers participation for the past decade.

Prior to last months official announcement, David Portalatin, NPD Groups executive director of industry analysis in Houston, described the plan in an exclusive interview with LubesnGreases.

LubesnGreases: How did the fall of the original AAIM data come about?

Portalatin: The leadership at one retail panel member, in evaluating how best to serve their interest, determined that they should no longer participate in a data-sharing model. As to specific reasons for their departure, it would not be appropriate for us to speak on their behalf. Once that retail panel member exited, some other retailers began to express

concern about exposure and it caused them to reevaluate their participation. Despite intensive negotiations and a sincere, good-faith effort on the part of panelists, they were unable to come to agreement on a data sharing model that addressed everyones concerns in an equitable fashion.

LnG: After realizing a solution could not be found without disrupting service, how did NPD mobilize to bring a new alternative to the industry? Who was involved outside of NPD itself?

Portalatin: The historic collaboration that this industry developed to allow over 10 years of point-of-sale tracking never stopped. High-ranking leaders from our retailer partners, manufacturers and the AAIA remained engaged with us, and the dialogue about how best to serve our industry has been continuous.

In parallel to all of this activity, NPD and Walmart signed a corporate agreement for point-of-sale reporting across a broad spectrum of categories, including automotive, thus paving the way for a new service that will provide unprecedented coverage for the industry.

LnG: How does how the new system work, and will it benefit the industry in ways the original AAIM data did not? Which retailer categories are participating now?

Portalatin: This new Retail Tracking Service will have much more comprehensive coverage of retail sales of automotive products and will include a broad array of retailers across the mass and automotive specialty channels (including the leading auto parts chains and majority of the AAIM panel members). While market coverage varies by category, we will typically have more than 80 percent of the market. For the first time, manufacturers and retailers will be able to work together with a clear view of the total DIY retail marketplace. Data will be available at a national and regional level with distribution weighted measures to allow for a fair and balanced analysis of an items performance. Just as we did before, the new service will also provide account-level reporting with retailer approval, giving manufacturers the opportunity to create value in the retailer/vendor relationship.

LnG: Are there shortcomings of this new system that the industry will have to adjust to?

Portalatin: At present, we will be focused on retail sales of 29 major categories. Application parts and commercial volumes are not part of this new Retail Tracking Service. The service will focus on total retail market coverage across the combined mass and automotive specialty channels. Reporting at the combined channel level is part of the agreement to ensure retailer participation and protect against individual retailer exposure.

LnG: How does the new systems share data align with the old AAIM data?

Portalatin: In most cases, tracked volume in this new Retail Tracking Service increases dramatically. As previously mentioned, we expect to cover more than 80 percent of the retail marketplace in general. In some categories that coverage will be even higher. As we speak today, we have not launched so I cant speak to actual numbers, but we estimate that in some categories like motor oil or appearance chemicals, tracked volume will represent more than 80 percent of the retail market. For some categories, this new service will represent sales volume that is double what we formerly tracked in the automotive specialty channel alone.

LnG: During the down-time between the old and new systems, was NPD able to reflect on what is most important to retailers who contribute and manufacturers who purchase the data?

Portalatin: There really was no time to reflect, as the demand for information in this industry never sleeps. We have always known we are in the automotive aftermarket for the long haul. The tremendous support and collaborative nature of this industry ensure that we will always find a way to bring information and insights to retailers and manufacturers, whether through point-of-sale sharing, consumer tracking or other research methods. So for us, there has really been no downtime, as we worked to help companies struggling to find answers that fill the void while at the same time engaging retailers and industry stakeholders to forge this new service.

We have always been committed to this industry and that commitment never wavered 10-plus years ago [when mass merchandisers withdrew from the AAIM data system]. We responded then by introducing, in close collaboration with industry stakeholders, the automotive specialty channel coverage weve all known for the past decade. In many ways this year was somewhat like history repeating itself.

A Fine Line to Walk

As data provider, NPD has a fine line to walk. It must preserve the trust it has with retailers to take their sales volume data and use it without exposing any individual retailers volume to the industry. The benefit for retailers is to be able to see how their own volume data compare to all retailers as a group. The benefit for manufacturers who purchase individual category data from NPD is that they can use the information to better monitor how their individual products are selling compared to direct competitors. They can make more-informed decisions on how to position their products, and most importantly, they can be better category managers.

The entire aftermarket industry can agree that this data is needed on a continuous basis without disruptions. Manufacturers must be sensitive to retailers wanting to keep their individual sales volumes from being exposed in any way – after all, it is their data. For their part, manufacturers will always crave more and more finite data in the competition to find any edge in the automotive market.

Pushed too far, some retailers pulled their data from the AAIM system, and the house of cards crumbled, never to be put back together again. When this happened, the industry lost out. All of this puts added pressure on data providers, like NPD, not to cave in to demands from either side, and to come up with compromises that are best for all parties and ultimately best for the industry.

NPD has demonstrated they are not just any data provider. This is the second time they have experienced a system-ending data disruption. Yet, the blow did not put an end to them as a data provider. While I hate to see the original AAIM data pass (because I helped to give birth to that data source), NPDs new system could prove to be an even better one.