Are You Keeping Pace With the Evolution of Category Management?
NATIONAL REPORT — Competition for the “convenience” shopper is at an all-time high. Convenience store operators must ensure they are mastering category management to understand the needs of consumers and meet those needs consistently across every product category in the store.
“The practice of category management has changed and will continue to change, mainly driven by the increased awareness and education of consumers. They are surrounded by a wealth of information at their fingertips that is changing their perception of what they choose to consume and purchase,” said Kristen Thaler, category development manager for convenience distributor McLane Co. Inc. “The industry [needs] to move to a more collaborative approach to ensure that strategies are aligned to fulfill the needs of the ever-changing consumer.”
Category management of the past has been more of a calendar-based event vs. a perpetual, always-on responding to customer trends and need changes. C-store retailers have to rethink their approach to targeting customers. Moving forward, it really needs to be about what is driving change in the market and how the customer is impacting that change, echoed Todd McCourtie, senior director of industry strategy at JDA Software, a provider of end-to-end, integrated retail and supply chain planning and execution solutions.
“It's not that category management of the past wasn't about the customer. Certainly, it was. But it was more around the product vs. what the customer wanted to purchase,” said McCourtie.
Today, the disciplines of category management and shopper marketing are converging.
Blaine Ross, president of the Category Management Association (CMA), defines category management as “a process to create a comprehensive plan that meets shopper needs in a superior manner to produce excellent business results for retailers and manufacturers.”
“It is a holistic approach toward developing a plan based on facts and insights that deliver sound strategies and tactical success,” Ross continued. “Category management excellence requires a disciplined structure and process designed to identify key insights to fuel growth.”
Reflecting the convergence of shopper marketing and category management, CMA recently formed a second organization called the Shopper Insights Management Association (SIMA). The goal is to help its members drive meaningful basket and brand growth and improved shopper experience across all touchpoints.
“Today, category management and shopper insights professionals are dynamically linked due to the emergence of new industry concepts that require a broader view of the strategic decision-making framework,” Ross explained. “We believe that bringing these functions together for thought leadership, career development, certification and sharing of best practices will provide the industry with a compelling value proposition.”
Ross noted that the retailers and suppliers that are winning in the convenience store industry are those organizations that are leveraging a variety of disparate data sources, and who can also deliver integrated shopper insights and influence the shopper.
Best practices for keeping pace with the evolution of category management are:
- Stop negotiating business plans and developing category plans in the absence of the shopper. Shopper insights and shopper marketing need to be included in, not separate from, category management. Working in a “bubble” will limit your success.
- Know your consumer and stay up-to-date on category trends to ensure that your item mix supports the evolving needs of your customer base. Continually look for gaps for items that may be missing from your set to capitalize on sales opportunities.
- It's not just about a planogram anymore. It's about strategy, understanding the customer’s path to purchase, and ensuring you have the right products available on whatever path the customer chooses.
- Those companies that can store data and access the information on a timely basis will be well positioned to meet and predict shopper demands. Use the data to hone your strategy. Retailers and suppliers that continue to deliver actionable insights will be successful in driving incremental growth and influencing their target shoppers.
- Document and share your overall category management strategies across the entire organization. Keep this updated annually. Develop onboarding tools to teach new team members what you’re trying to accomplish. Also share your objectives with your trusted suppliers and ask them to bring in shopper-focused solutions that match your goals.
Download our full report, "How to Master Category Management for Today & Tomorrow,” by clicking below.