Photo: Georges F Mirza
Innovating Category Management – NRF 2024 Battle for Space
NRF 2024: Retail’s Big Show was a three-day event that brought together the world of innovation to showcase solutions addressing every aspect of retail inefficiencies. Over 1,000 solution providers packed the event, filling 300,000 square feet of expo space with over 42,000 attendees. There was so much to see but so little time to give it justice.
The retailer’s challenge is to find what is relevant to its business in an industry that is becoming increasingly fragmented and noisy. How did the space and category management solution field fare out? Solutions are juggling the same components; differentiation is yet to be seen. The common focus is the end-to-end solution for category management and the seamless flow between the different components sharing the same platform.
Over the past decade, what problems have we really solved? Technological advancement has been tremendous; it sounds good in theory, but not always in practice. The two main issues are that solutions are not integrated or interconnected and they do not scale efficiently.
Space and category management solutions were prominently represented at NRF 2024. Blue Yonder showed its dominant role with its strategic location at the entrance of the main floor and by bringing along a knowledgeable team. Close by, I found Relex, making it clear that it is committed to competing for the business by showing off its investments and wins.
Top Solution Providers on the Main Floor
Blue Yonder had a strong message to highlight. The company is focused on revamping its extensive portfolio by investing in and prioritizing the end-to-end solution on a new platform. Cognitive Planning for Retail is the focus, and it encompasses space planning solutions and support tools, a journey to bring Blue Yonder’s rich portfolio together and deliver end-to-end capabilities that are two decades in the making. It is a big undertaking but overdue, and the industry is searching for usable solutions that reflect today’s needs and capabilities. Made up of several marquee acquisitions, the company certainly has the know-how to deliver. With a majority market share, the pressure is on because Blue Yonder has the most to lose and a lot to gain by solidifying its market position. Whether organically or through acquisitions, it must show leadership in expanding and executing rapidly.
Relex Solutions continues to show determination to expand and grow its business. Strategically located within striking distance from the market leader Blue Yonder, the company showed excitement and energy throughout its delivery at NRF 2024. It set up a mini stage for presentations that attracted people’s attention and generated interest. Relex just won Circle K North America’s business for its complete end-to-end unified category management solution, including store forecasting and replenishment and merchandising solutions for store space and floor planning automation. Relex’s homogeneous backend and “configure, don’t code” approach give it an advantage in demonstrating its solutions’ seamless flow and usability.
SymphonyAI, once considered one of the top leaders in the space, was present at a distance from the other solutions and kept a steady flow of interest from attendees. One of the first to initially embark on a journey to revamp category management solutions, the company is indeed touting AI and generative AI as part of its solutions. It is unclear to me where SymphonyAI is currently in its journey of maturing its category management portfolio and how it is integrating computer vision capabilities from its ReTech Labs acquisition.
So What?
It was clear that artificial intelligence and its derivatives have been top of mind over the past year for many good reasons. It was evident at NRF 2024 as well. I have seen vendors go overboard with their messaging on the trendy technology of the day — changing product names, and some even changing company names to reflect the day’s flavor. These activities typically show low maturity and are short-lived. Technology is advancing rapidly; we need to refocus on the “why” and how solutions can continue to be innovative and deliver value accurately, repeatedly, and at scale.
It’s simple for companies to highlight the technology they use, but it’s more valuable for them to demonstrate their use in creating innovative solutions.
Solution Providers’ Focus
NRF showcased an abundance of fragmented innovations. It’s time to start to consolidate and make them actionable. I like the recent moves — such as merging solutions — by SES-imagotag, now called VusionGroup, which were prominent at the show. The various solutions, from electronic shelf tags to marketing and computer vision, coming together to digitize the store are impressive. How they scale and execute will be of great interest.
Change Is Coming
Near real-time shelf insights are becoming a reality. Space management solutions need to take notice and embrace the new day. This new critical data source will enable autonomous, smart end-to-end space and category management. Current solutions are very limited in consuming large datasets and optimizing based on this data type.
The industry is ripe for new space and category management solutions, and it is on the center stage of the top players to make significant advancements. With robots from Badger and Simbe and many other camera solutions like Spacee, we are starting to see the scale.
Traditionally, space-based solutions have been limited to the top three players in the industry for decades. That trend has changed recently, and several new solutions are getting recognition, especially in the tier 2 and 3 groups of retailers.
Unless market dynamics change, the new top three, in my opinion — Blue Yonder, Relex, and SymphonyAI — are the most likely to usher in the new wave of space and category management end-to-end solutions. The space-based component centered on near real-time shelf conditions is at the forefront. So, the sooner solutions providers and retailers recognize it and consume it, the closer we will be to realizing smart category management.
Discussion Questions
If you were at NRF 2024, what were some of the most notable category and space management solutions you noticed?
What are the main challenges limiting space and category management solutions in the retail industry from reaching their potential?
What do you think the future of retail solutions will look like, and how can providers stay ahead of the curve?
Poll
Loading …BrainTrust
James Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Zel Bianco
President, founder and CEO Interactive Edge
AI has an important role to play in space and category management solutions, especially when it comes to monitoring compliance – which is something AI can do quickly and efficiently. There are also opportunities to use AI to more closely align solutions to other data sources such as sales, traffic flows, eye tracking, etc. to help optimize space and displays.
Space management is changing significantly as parameters shift at a rapid pace, much faster than at any point during my four decades in CPG/Retail.
Now is the time to tap into the creativity that earned you your market share in the first place! Through collaborative partnering and nurturing, retail management must encourage innovation within their organization and within the industry. There will be a significant impact from this shift. The next real disruptor is yet to be discovered. – Db
Space management solutions may not be evolving very fast in their present mature state, but the data inputs are.
Inventory scanning and reordering solutions provide a more timely and accurate read of on-shelf availability and planogram compliance, This lead to more informed CM decisions, including those foundational space plans.
The top challenge limiting the execution of space management solutions continues to be the integrity of the store map data in the planning tools. Without accurate data about fixtures, it’s impossible to create planograms that stores can consistently execute. Many retailers have adopted a “guideline” approach, knowing that they can only get close. The issue here is that to realize the ROI benefits of the space plan, facings and capacity data has to be accurate.
One area that AI will be able to help with is automation and localization. Creating store-specific planograms is a challenge, even with the tools available. AI will have the ability to consider local data, movement data, and replenishment models to optimize assortments, which I believe will transform how CPG and Grocers set stores and manage assortments. But, if the fixture data isn’t right, if stores can move things or change sets, then progress will be slow.
The industry sometimes positions category management and category management solutions as primarily space management solutions and that is part of the problem as I see it. The biggest failure has been not only the fragmentation of solutions, but the lack of real, consistent and unbiased insights and actionable recommendations leading to true collaboration between the retailer and supplier community. Those suppliers who work closely with their retail partners find ways to connect the dots when solutions lack the ability to do so.
Space and category management are key capabilities and strategies for retailers to address throughout 2024. AI capabilities are transforming, evolving, and accelerating the merchandising, category management, and product development processes. Merchant and product development executives can leverage generative AI capabilities with real-time customer behavior insights to optimize every aspect of the merchandising and planning cycle.
Chandhu Nair, SVP of Data and AI, Customer and Marketing Technology at Lowe’s, shared that investing in AI capabilities, digital twins, and innovation for merchandising, category management, and product development processes is a game changer. Considering that Lowe’s sells such a diverse and vast assortment of products, ranging from appliances to lumber to paint, the Merchants are benefiting from these AI and digital twins capabilities by:
Category and space management are ideal candidates for reinvention and the incorporation of AI-driven influence. That said, the fundamentals of managing space must not be overlooked and the “art” of merchandising not lost. I am very optimistic about incorporating new data, new insights, and new methods to deliver effective category management solutions.
For the past several years, retailers have focused initiatives on the customer experience, which is extremely important. However, great customer experiences will turn into bad customer experiences if the products aren’t right or available. Successful merchandise planning and forecasting is imperative to help ensure you have the right products in the right place at the right time. It is good to see a renewed emphasis on merchandise management.
A promised new world of solutions can be exciting. At the end of a show like NRF, grocers and retailers focus on just a few things to make a decision for a test-drive or to dive in.
Will this raise my customer counts, increase basket size?Will this lower labor, supply costs?Will this increase profit dollars?What is the ROI and expected timeline?Retailers and grocers will run to the solutions curve if given legitimate evidence, if proven. Providers then must be ready to personally work at store level with the retailer to wade through the realities of installs and testing in open legacy environments.
May I be critical for a second and say “sea of s[h]ameness”? End-to-end, seamless, data rich & conversational, siting on one platform, have all been the elements required for category management forever and a day. So what has changed? AI and its derivatives went from top of mind to “marketecture” and embedded at best. Why should we care? Well one would care, if a provider was able to demonstrate value generation, and in the case of category management – continuous value assurance. Did NOT see that on the floor Georges. It feels like we are at the 6AM slot still with category management reaching its potential. I feel in less than three years we will see legacy catman and traditional BI completely disrupted. Semantic models will be replaced by AI semantic graphs; teams of analysts will be replaced by transformer models, catman software developers will be augmented by coding assistants and automatic visualization generators that will take input from CCTV cameras allowing for the “best next action” to be taken at the place and moment that matters most. Instant action gratification vs POG to real-o-gram, digital twins, etc. CatMan in the hands of the frontline worker. Managing the nuances of operating a store as if it was a chain of one – owner operator feeling. What a thought. What do you all think?
I draw a distinction between how fast these solutions are evolving, and how quickly they are being adopted. In other words, I don’t believe that a wide swath of the US retail community has invested in these solutions to date, and thus the benefit that could be derived from them has not yet been fully realized.
Retail leaders have a lot of potential opportunities to invest in technology solutions that can pay for themselves with performance improvements and customer satisfaction with their shopping experiences. It seems like the pandemic caused a number of players to pull back on such investments, as they sought to weather the crisis and remain healthy financially.
One of my takeaways from the recent NRF Big Show is that we are facing a Retail Tech arms race of sorts, where key decisions on what investments to make in technology may further stratify winners and losers in our industry for the balance of this decade, and beyond.