Through a special arrangement, what follows is an excerpt of a current article from the monthly e-zine, CPGmatters, presented here for discussion.
According to an Instant Poll on the home page of the March edition of CPGmatters, "using more shopper insights" was the most suggested way to improve the effectiveness of category management, picked by 32 percent of respondents. About 26 percent opted for making the process less complicated, and 22 percent want more collaboration with trading partners. Coming in on the lower end were more sophisticated analytics, 14 percent, and assorted methods, five percent.
"Shopper insights is the future of category management," enthused one of the executives in the comments section of the poll. Another looks for "creating retailer solutions based on shopper insights."
The importance of shopper insights to category management is no surprise to consultant Paul Thompson who believes that consumer-driven assortments will optimize conventional shelf sets. "But the data for category segments may not be aligned the way the consumer organizes or shops the category," cautioned Thompson, managing director of Chicago-based Henry Rak Consulting Partners.
"A category purchase structure derived from both consumer usage and purchase patterns is required to align segments with consumer shopping behavior. An example of this is analgesics, which are aligned by ingredients like ibuprofen and acetaminophen. But consumers purchase analgesics based on ailments like headaches and body aches, not based on ingredients," said Mr. Thompson, writing in the current issue of The Rak Report, a quarterly newsletter.
In support of "deploying more sophisticated analytics," a respondent wrote, "Retailers and manufacturers must become more sophisticated in the analytics as well as in the execution of what the analyses are ultimately saying."
Write-in comments by survey respondents offered assorted other ways to enhance the category management process. They included:
- Promotion and planogram compliance in the stores;
- Need to move from being an "efficiency" tool to becoming an "effectiveness" one;
- Buy-in from top-level executives;
- Empowerment of category managers to implement tactics based on their findings.
Discussion Question: What do you think is most needed to increase the effectiveness of category management?