Category Management

HISTORY AND DEVELOPMENT

What is Category Management?Category

An assortment of products all serving a similar function for the shopper

Category ManagementContinuously collaborative processRetailers and manufacturers manage categories

Purpose Optimize shopper satisfaction

Vendor Assortment Price Presentation Promotion

What is Category Management?Is about understanding data

To maximize category performance

Data drives retailer/manufacturer goals alignmentShopper need solutions integrate multiple categories and vendors

How Did We Get Here?1980s Japanese total quality movement

Statistical process control

1990s CPG industry forms the Efficient Consumer Response (ECR)address collaboration concerns across the entire demand and supply chain

The Partnering Group founded in 1991Gordon Wade, Dr. Brian Harris, and Bill BurnsECR invites to lead category management development

(Wade, 2013)

How Did We Get Here?ECR included all major industry stakeholders

Focus problem solving at the category levelAvoid brand and product level

Shoppers organize around categoriesRetailers organized by categories not brands

(Wade, 2013)

What is the “process”?7 measurable steps 1. Category Definition

a. Define by shopper being served

2. Category Rolea. Fit in organization

3. Category Assessmenta. Opportunities

(Fowler & Goh, 2012)

Definition

Role

Assessment

What is the “process”?7 measurable steps 4. Category Performance Measurement

a. Setting KPI’s and measuring performance

5. Category Strategiesa. To deliver results

6. Category Tacticsa. Actions to implement strategies

7. Plan Implementationa. Execution

(Fowler & Goh, 2012)

Scorecard

Strategies

Tactics

Implement

REVIEW

How does it work?Change the cultureRetailer and manufacturer collaboration

Shared successEach can be more successful together

Shopper needsSharing data to drive decision making

(Wade, 2013)

How does it work?Shopper FocusCustomer for both retailer and manufacturer

Data AnalyticsData from multiple sources

Fact vs FictionInsights from data

(Wade, 2013)

What is the goal?Increased ProfitabilityReduced assortment related costs

Shopper SKU substitutabiltyFocus on key item development

Enable superior performanceBetter in-stockSpace utilizationImproved supply chain performanceIntroduce new categories/services

(Wade, 2013)

So, who uses category management?

CURRENT USERS

Retailers and ManufacturersGroceryBig Box retailDIY chainsFood Service

Federal Government

CAREERS INCLUDEMerchandising

Space AllocationInventory ManagementAnalytics

SalesCategory Captain

Marketing

Technology

Software Development

ORIGINALLY DESIGNED FOR CONSUMER PACKAGE GOODS (CPG)

Category Management

HISTORY AND DEVELOPMENT