First, I do take issue with the term “Incredible Dissolving Store.” It’s certainly an attention-getter but I don’t think it’s valid. I don’t see stores “dissolving.” They may be “shrinking,” though, in square footage as retail executives figure out how to adjust to the fact that a growing number of consumers may be showrooming.

Retailers will need to have endless aisles, but also stock the products in-store that shoppers want to see, touch and experience before they buy.

I think that advanced analytics are going to have to come into play in order to help retailers identify their target consumer base and their best consumers for each individual store location. Then retailers will need to use technologies that deliver personalization and localization in order to draw shoppers into their locations and keep them there.

The problem with real time data is that it often exists outside an immediate context. The problem with historical data is that … well … it’s great for knowing what decisions you should have made in the past.

The issue with big data is that, by its nature, it resists the kind of forecastable analytics category managers are comfortable with. So, the first thing category managers need to rethink is what kinds of data are really necessary and how much data is sufficient.

Adjusting, in any meaningful way, to a world driven by big data will represent a radical way of approaching category management.

Well, first, category management needs to be better aligned with whomever in the organization is working on shopper insights. This is not the case in many CPG and Retail organizations, let alone aligned with whatever department is working on e-commerce and social media responsibilities. Once that is in place, and the data that is driving those areas have been thought through as to what an organization wants to do with that data, then and only then can the category management group start to understand how to analyze and present this for more effective impact on the shopper in the center of all this. Big Data can be scary and will continue to be scary for organizations that don’t first take a step back and try to understand what the goals and objectives of using it are. What continues to amaze me is that some organizations and specifically category management practitioners believe that simply working with syndicated data sources will give them enough to work with. I believe those days are gone. Category management teams that… Read more »

Without a good approach as to why and how data is to be used, chaos is inevitable. Not all data is useful for all purposes and decisions. Retailers need not lose any power. If retailers understand their mission and target market, collaboration between partners can be focused on joint consumers with trading partners. Those joint consumers are likely to be different with each partner leading to a more complex category solution, but one that is more attractive for the retailer’s consumers.

Once a plan is created, real time data is important for determining significant deviations from the plan. Real time data is only relevant for planning when it is evaluated over a period of time to identify trends. Understanding which data is useful for what purposes and making decisions with the retailer’s consumers at the center of all joint planning is demanding, but allows the consumer to stay at the center of all planning.

Jamie’s perspective is a thoughtful one that definitely challenges the status quo of category management thought. As some of the comments above point out (Zel and Ryan)—the world is not orderly and cannot be easily represented by the tools that many category managers are most facile. What gives me pause in the chart is that while the shopper is in the center and acknowledgement is given to the importance of the shopper—the outside circles are all focused on what retailers and manufacturers do “TO” the shopper or each other. I think that the “Shopper” circle has to be engaged, spoken with (not to), understood, and helped. The model (as I understand it and interpret it) is still trying to fit the shopper into the outer circles more than understanding how the shopper WISHES or WANTS to be approached. Jaime gets us to think more about the chasm between “us” and “them.” And that is a positive. I just think we are still in search of “Galileo” to tell us that the shopper is the center… Read more »

The original purpose of category management was to eliminate OOS and maximize profitability of a product group. Evidently, these goals have never been achieved because every time my local grocer runs a special, he runs out of stock.

I would submit that getting it right has and will be elusive until someone with some actual knowledge of the products takes over management of the products. I would submit that “big data” can’t supply any information than regular data didn’t supply prior to “big data,” and that mobile consumers aren’t presenting an “onslaught” of any meaningful kind. Consumers shop based on convenience and value and no one is more mobile today than they were 5 years ago.

The only key adjustment that needs to be made is to review the goals of category management, get all of the extraneous mumbo jumbo out of the way and execute to the objectives!

I agree with Debbie Hauss’ comments that the store isn’t “dissolving.” It is evolving. Category management from both the CPG and retailer perspectives needs to leverage the Big Data that somehow continues to maintain its ambiguity. Managing the ever-expanding data available about the consumer is both a significant challenge and a strategic opportunity for consumer products and retail companies. Data is exploding in volume, variety, velocity, and veracity and both structured and unstructured data continues to grow at astronomical rates. This creates a tremendous opportunity for organizations to understand consumers, and make timely decisions to achieve business goals. However, at the same time, organizations are struggling to turn information into actionable insights. Business leaders continue to make decisions without access to the trusted information they need. The mobile consumer only adds to this complex equation. Category managers need to take emotion out of the decision process, look at velocity of movement for all SKUs, rationalize assortments and deliver an agile merchandising strategy that compliments trends as they evolve. The pace of change will only continue… Read more »

Thank you Ed Dennis. We can easily get distracted by “Big Data.” One always has to question the origins and what actual shopper segments they represent. Category Management still depends on that desk wizard who understands his category, and designs assortments that provide the right items in the right stores without undue complexity. He shows clarity of offering, merchandises his store to reduce shopper angst, and is cautious regarding the influence of the category vendors. He (she) does what is right for the shopper and the store.

Data are the “Tea Leaves” but it is that overworked under appreciated guy who sits at headquarters doing his best to satisfy his boss and his shoppers. What do we need to do to adapt? What changes? Start with the right people, give them the time resources and support to do their jobs and get the H*** out of the way. Then watch the categories grow.

I believe changes will be subtle. The tactile shopping environment of retail is powerful communication—communication that can’t be replaced by mobile or by targeting through big data. (A colleague of mine, in fact, has suggested the outcome of big data might be to give brands so much targeting power that they destroy their brands with hyper targeting—losing that overriding simplicity that delivers brand power).

Big data is least likely, in my mind, to bring dramatic change. The insights I’ve encountered through big data lead to tuning changes—getting that last small percentage of sales. Not insignificant at all—but not game changing power like, say, television advertising can be.

Mobile is also oversold. But there is tremendous room for clever application of mobile to create 5% to 10% change with mobile.

I think Ryan Mathews nailed it and would add one caveat: in the food and drug CPG industry we don’t really apply rigorous forecast analytics. Rather, we use analyitics more often considered as scenario planning by those involved in higher-math professions. If this sounds like a nit, consider the ocean of big data becoming increasingly accessible as compared to the traditional data pool available to category managers (which is more like Lake Michigan). We really could use a few rocket scientists, in my opinion.

This is nothing new. The vast majority of data never gets “mined” correctly, nor does it get used to its potential. This leaves category managers feeling like they have to mine all data in an effort to appear to be maximizing their productivity. This is just not needed. More is not better when it comes to accessing or trying to use data. Instead a clear, focused vision to maintain a category management model throughout an organization is the best example.

Few people are comfortable with fuzzy boundaries. Those who work with empirical data perhaps least so. If the image of the walls decomposing is unsettling to some here, then I’ve accomplished one of my goals, at least.

The whole point, of course, is to present a store that is tuned to deliver shopper success. We achieve that by listening actively to their stated preferences and measured behaviors and correlating them against our actions as merchants.

So far, we’ve been fair at reading the signals within the store. Now social, mobile and search are exposing a whole new universe of external influences. It’s too big to dismiss, folks, and you don’t get to control it.

Thanks to all who add their points of view to this discussion. It is hardly the last word on the subject, and the real work is barely started.

Anybody read the book “Blink”? Well, it’s not about having the statisticians to analyze data and turn it into working algorithms anymore. It’s about truly understanding your customer and having the insight to pick out those pieces of data key to your business and using them. This is pretty radical to most category managers today.

Most of the key shopping decisions in many categories are made at the shelf. It may be the consumer decision tree needs to add in more tiers at the top…need it now…must touch it…store of choice.

Retailers who have good strategies and consistent messaging to their market areas will continue to succeed based on the common denominators that define retail…product/placement/pricing/promotion. How they are able to visualize those variables in the consumers mind and reinforce a consistent message will help overcome the fragmentation and noise from the multitude of data sources that are vying for the attention spans of the time-starved and desensitized mobile moms that need to make household decisions while balancing careers/kids/jobs, etc.

Looked at from the standpoint of supply chain management (what retailers mostly do,) category management is a massive step in selecting and organizing the tens of thousands of items going into the store, from the millions suppliers are making available. Going from a million or more to 40,000 is no mean feat. Unfortunately, as far as shoppers are concerned, it just doesn’t get the job done: SHOPPERS DO NOT BUY CATEGORIES, they only buy individual items. So retailers are holding “The Dinner Party in the Pantry,” great selection, but where’s the meal? (The true selling?) May I suggest that the actual wide deployment of smart phones in stores, in any significant way, may involve some cooperation from retailers, but will not be led by retailers? The reason for this is that all the problems people describe as needing solution in order for big, BIG mobile data to be integrated from the shopper to the retailer (rather than from the retailer to the shopper), requires shopper understanding and skill sets far from those retailers have developed.… Read more »