The Deerfield, Ill.-based company was founded in 1991 by former Nielsen and Information Resources Inc. executives. It collects daily sales data from all stores in a retail chain. Such data fulfill many of the goals of ECR, including automatic replenishment of store inventory and pay-for-performance promotions.
David Flaschen, Nielsen president and chief operating officer of Nielsen North America, called the partnership a "technological leapfrog" for the company. Because Nielsen had been negotiating with Efficient Marketing since November, Nielsen had been conspicuously vague about its plans to collect census data. Such information is collected from all stores in a chain on a daily or weekly basis.
In exchange for the investment, Nielsen owns a minority interest in Efficient Marketing and has access to its data, which Nielsen will integrate into the strategic data the company already passes on to manufacturers and retailers.
Both Nielsen and IRI have traditionally collected sales data from a sample of grocery stores. Both companies estimate sales for an entire retail chain based on actual data from a percentage of stores. Manufacturers can use these data, called strategic data, to track the long-term sales of a brand.
Efficient Marketing was the first research company to start collecting daily census data; critics of Efficient Marketing's moves contend marketers aren't yet ready to use such data.
Rival IRI announced last month it's converting its weekly, sample data system to a weekly census system, called InfoScan Census. Currently reporting data from 5,000 stores, IRI said by yearend the system will allow clients access to data from 11,000 stores.
"From our point of view, the majority of our clients don't need daily data. It's overkill," said George Garrick, president of IRI's North American operations. "The main need is to move from samples to census-there are a limited number of applications for daily data."
Mr. Garrick did concede reporting daily census data is the industry's ultimate goal, adding that IRI will eventually merge InfoScan Census with its Catalina Information Resources, a daily census-data collection system now in 1,000 stores in Chicago and California.
Efficient Marketing, currently in 1,200 stores in Midwestern and Western states, plans to use Nielsen's investment to expand to 2,600 stores by yearend. Package-goods marketers that buy daily data from both Efficient Marketing and Catalina say they don't note much difference between the two services. But predictably, both companies beg to differ.
Efficient Marketing contends its ability to "clean" the data-to look for errors in pricing-at the store level is an important distinction. Catalina pulls the data from the stores and cleans it at a central processing center; Catalina CEO-General Manager Bob Billings said centralized cleaning isn't a handicap.