We Introduced Category Management to the U.S. Market in 1990…it is Now Time
to Evolve Beyond Category Management to a New Business Model
The Food Marketing Institute (FMI) survey, conducted by Winston Weber & Associates and Deloitte Consulting, reveals that 100% of the 70 retailers and CPG manufacturers surveyed believe we must move beyond category management.
Over the Years Category Management has been a Significant Contributor to Sales and Profit Growth for both Retailers and Consumer Products Manufacturers
It has contributed significantly to sales and profit growth for a vast majority of retailers. Specifically, it has positioned retailers to align merchandising strategies and tactics more closely with consumer purchase behavior; it has led to an environment that encourages fact based decision making; it has led to greater efficiencies across the supply chain; it puts a much sharper focus on costs down to the item level; and it has provided the framework for retailers to achieve an acceptable return on sizable investments in information technology. It has also created an environment that encourages collaborative information sharing and planning between trading partners.
Consumer Products Manufacturers have also benefitted from category management. They have been able to better align their brand strategies and tactics with retailers, as well as improve service levels and inventory management through collaborative planning. the classroom to practical on the job application.
We Are Now Experiencing the Most Dynamic Changes in Years… Yet There Have Been No Major Category Management Upgrades since its Introduction Years Ago
Industry since the 90’s
Perpetual decline of center store
Disruptive new entrants
“Everyone is selling food”
20+ point shift from traditional value
“Big data” and its potential
Digital commerce and influence
“Fresh” and “Health” specialty formats
Consumer since the 90’s
Digital access and market transparency
Expanding food lifestyles
Gen X,Y, Millennials
Digital connectedness and social media
From value to “values”
Introducing Shopper Solutions Planning, a Core Component of Shopper-Centric Retailing, the Industry’s new business model
Consumer products manufacturers must build upon traditional category management capabilities and evolve to a category planning process specifically designed to translate insights into shopping experience enhancement solutions. Considering the magnitude of investment most manufacturers are making to support current category management initiatives, this will require rethinking how resources are being allocated, determining the feasibility of further resource investment versus resource reallocation and determining “how” to evolve the organization to Shopper-Centric Planning capabilities.
In Today’s Dynamic Marketplace Category Management has Too Many Limitations
In today’s shopper-centric environment category management has
too many limitations and is no longer positioned to produce the desired results
- Shopper Insights are not an Essential First Step Consumer/Shopper insights subject matter expertise is not defined as an essential first step prior to development of the category plan.
- Not Positioned to Focus on the Shopping Experience and Merchandising Solutions Planning process is too narrowly positioned by focusing solely on a category instead of more broadly on those factors that can influence merchandising solutions and effectiveness of the shopping experience
- “Silos” Prevent Optimizing Complimentary Category Merchandising Compartmentalization of the organization into departments often creates barriers to optimizing complimentary category merchandising
- Store Operations Not Aligned with Category Management Does not provide the necessary process and performance measure alignment with Operations to ensure vertically integrated “ownership” of store execution…. the “Achilles Heel” of category management.
- Category Roles are Disconnected Category roles are integrated as part of the category planning process which can result in a disconnect between the retailers strategic positioning and the category plan.
- Required Merchandising Skills are Not in Place The primary emphasis on analytics and producing the plan, without sufficient emphasis on the development of creative merchandising solutions, has resulted in a noticeable deterioration of the “art” of merchandising skills
What We Do
We are the most qualified to guide a retailer’s category management evolution to Shopper Solutions Planning.
- Conduct an assessment of current category planning approach and process to include:
- Strategic plan/go-to-market strategy communication
- Category roles
- Approach to supplier partnering and data sharing
- Current information gathered to conduct situational assessment
- Current category plans
- Implementation of plans
- Scorecarding and adjustments
- Present recommendation on adjustments to current process to begin “centricity” journey
- Adjust based on input
- Build implementation plan
The implementation plan depends mainly on the outcome of the assessment and the required changes to current category planning to become more shopper-centric. Elements could include:
- Adjustments to category roles
- Adjustments to current information systems
- Revisions to supplier partnering and planning
- Changes to the current plan development process
- Changes to current plan presentation approach
- Changes to plan implementation and compliance disciplines
- Changes to plan scorecarding and monitoring process
- Organizational training on revised process
- Initial plan facilitation for selected priority categories