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Jun 13, 2016

The Story Behind The Numbers

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Last month The NPD Group issued a press release focusing on the overall growth of the Canadian toy market in the first quarter of 2016. The release stated that the Canadian toy industry was relatively flat in Q1, posting an increase of just 1 per cent. However, the release also went out to suggest that the so-called “Target Effect” highly skewed growth metrics for Q1. For those of you who are not as familiar with the Canadian market, in 2015 Target announced that it would be closing all of its 133 Canadian stores and exiting the market. After the announcement the company swiftly implemented a number of markdown sales to reduce inventory and curb losses. The clearance sales led to a spike in toy sales, which thereby highly inflated growth in the Canadian toy industry. In fact, as a result of Target’s strategy, toy sales skyrocketed 23 per cent in Q1 of 2015 – hence the “Target Effect”.

Why does this matter?

Because when the inflated growth from Q1 of 2015 is removed the data suggests that the Canadian toy industry was in fact not flat, but actually grew by approximately 7 per cent in Q1 of 2016. This is quite the substantial difference. And while the “Target Effect” is a rare occurrence, it goes to show how easily data can be manipulated and misunderstood. For those of you who take great care in designing programs and strategies based on analytical data, it is also a good reminder to ensure you thoroughly understand the numbers that form the base of your decision making. At NPD, we work diligently to fully understand the story “behind” the numbers; to fully appreciate not only what ostensibly seems to be the case on the surface, but to understand the often overlooked nuances that can mean the difference between success and failure to your business.

The good news is that you are NOT alone. NPD has a number of industry experts who are able to guide you through the data the matters most to your business. So if you are unsure of how your data analysis is stacking up, simply reach out – we’re here to help!


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