Some reasons come to mind regarding the slower development of category management in general merchandising, especially in softlines businesses:

1. Particularly in apparel, rigid space management according to planograms is less important. So the whole concept of space productivity is harder to manage on a fixture-by-fixture basis when the allocation of those fixtures is a very fluid process changing from season to season.

2. Private label is much more important in apparel and softlines merchandising than in CPG. Stores doing a third or more of their business with their own apparel brands need to be their own “category managers” by embracing a disciplined approach but probably don’t have the strong vendor partners to drive category management on their own.

Outside of apparel, there are plenty of planogrammed categories in general merchandisers, mostly in the home store, that might lend themselves to CM. But the store management must be convinced that the process has merit, and the vendors in these categories need to have the ability to execute it well.

In theory, there is every reason to believe CM works the same for general merchandise as it does for other categories in the grocery store. Here’s the limitation, though – quite often there is no range or a limited range of choices in the GM section. Category Management works best when a consumer exercises choice. If the shopper doesn’t have a choice, for example, if a store only carries one brand of light bulbs, the utility of CM is limited to whether that’s the best brand to carry and, maybe, at what price. Lots of room for more research in this area.

It is difficult to draw specific conclusions from broad surveys. If, as I believe, the respondents were mostly from the grocery trade, it is not surprising that they would view GM as a secondary player in category management.

We must remember that there are GM players that have been leaders in category management. Gillette has long been a leader in batteries. Time-Warner, a client of DHC, has lead the way in magazines.

Also, there are factors that make category management a more natural fit for grocery than GM. Grocery categories tend to have more space, more items, and more segments to manage. They also tend to be more destination driven, while GM is often more margin driven.

Yes, GM players need to increase their efforts in category management, but they are not alone in that quest.

General merchandise suppliers have not yet learned the lesson of category management. In fact, many have been very slow to respond to request from the retailers to create a circumstance that is more favorable to growing the business. This is a real shame. There are many categories of GM that have stellar performance and deserve incremental space and resources. More times than not, this does not occur because there are product and brands in abundance “blocking the space” that are not ideal performers. While some have now begun to react, they may indeed be so far behind that traditional category management is no longer the answer. The time may have passed for the traditional category management templates used by many retailers and manufacturers. More robust and statistically accurate methods now exist that will allow both manufacturer and retailer to make significantly better decisions faster. One might consider the concept of aisle management. From personal experience across multiple categories, I can demonstrate quite easily that proper aisle management can add “serious adult money” to the bottom… Read more »

Not only are GM suppliers behind the average CPG companies, but also behind HBC and Private Label suppliers. In all fairness to the GM suppliers, is the retail food channel a large percentage of their sales? The answer for most is – no. Many don’t have the sales and resources to provide real Category Management, but that should not let them off the hook. Better understanding of the customer and how they purchase would go a long way to putting the right products in the right retail format. The results will be increased turns and sales.

It would be very hard to believe that general merchandisers, to include apparel, other fashions, core kitchen utensils,
branded cookware & hardware, don’t have expertise in category management.

Would you think Target, Sears, Costco., etc., don’t demand such a service from all their suppliers? Hmmmmmmmmm

Another element that has limited the ability to do Category Management in GM is the limited amount of data available in some categories. If third party data suppliers (like IRI and Nielsen) aren’t tracking those scanned sales, market data is not available for retailers to benchmark against. They aren’t able to compare growth rates within these categories, nor calculate their share of the market. There are still some basic Category Management analytics that can still be done, despite limited access to data. Category Management also requires organizations to have the capability to do the work. This requires headcount, as well as proper Category Management training, for the organization. Category Management is not just about developing some plan-o-grams, but about making strategic choices and recommendations, both internally and externally. In order to do this, a certain level of understanding of Category Management is required by senior management, sales and marketing within an organization. If a Category Management department is left in its own silo, and they are the only ones who understand the concepts and “how… Read more »

General merchandise suppliers to supermarkets are often demoralized by what they perceive as a “show us the money or get out” attitude of supermarket managements. The GM folks often believe that no value-added service is appreciated, so why bother to try? And many supermarket folks feel that their suppliers just can’t empathize appropriately with the legendary paper-thin margins suffered by the grocery business. Given the low margins of both the suppliers as well as the retailers, it’s amazing the industry works as well as it does.