If you go back to Brian Harris’ early writings on category management, he viewed the process as a triad of vendor, retailer and consumer. We lost the consumer early in the process, as CM became a spreadsheet financial tool and a space management tool. The problem is that there are no guaranteed logical outcomes from the CM process. We’ve been saying, for 23 years, that you need to test the outcome with shoppers to see if they respond to it. So many of the initiatives we test look good on paper but fail to do what they were planned to do.

Seriously? 63 percent don’t use the data available to them? … and I’d bet that number is actually lower than the reality. The days of “gut feel” category management work have got to come to an end. There are WAY too many great tools available today for a retailer of ANY size, including a five-store company, to take advantage of great data analytics insights.

When you look at what products to carry and which to drop, this should be done swiftly and accurately with technology that can determine far better than human intervention which products to keep. How do you know which products in seemingly unrelated categories are affected by promotions in other categories? You simply don’t without the right tools.

Category management needs to be redefined to include the consumer insights that many manufacturers and retailers have in their data. This includes finding ways to incorporate digital data into the process. True consumer insights may redefine some shelf setups and merchandising around meal occasions or related item purchases. It also should better incorporate personalized communication with customers particularly the top third of your base.

The biggest stumbling block to accomplishing this remake is the same as always — resources meaning people and money! Kroger is in the best position to lead a change in the process.

Shoppers want (and expect, thanks to their online experiences) local relevancy at the very least and ideally a good dose of personalization for their in-store shopping experiences. Category management has become a blind checklist. It needs to be driven by the shoppers at the store level. In today’s world of available data, it should be easier to listen to what shoppers want. Unfortunately, it’s a lot easier for retailers to maintain a spreadsheet.

We are working on this very diligently through the CatMan 2.0 initiative with the Category Management Association. It includes major retailers like Walmart, Sam’s, Ahold, Walgreens, etc. and suppliers like McKee, Dannon, RNDC, Mondelez, solution providers like us, JDA, Acosta and more. This effort is being done in order to accommodate the important changes that are needed to update the process to include shopper insights/marketing, digital and other shopper specific data streams, tools and more. As Gordon Wade states in the original invite for this: “Making CatMan 2.0 an output of the CPG CatMan community is critical to its quality and broad scale acceptance. No one person or organization has the intellectual breadth or credibility to encompass all the enhancements we envision. Certainly the CMA does not.Therefore we will reach out to manufacturers, retailers, brokers and to solution providers to help assemble the most advanced state of the art solution in each aspect of CatMan. We will add whole new areas of subject matter totally omitted by the original work. For example we will include… Read more »

The biggest shortcoming of current category management processes is that they remain based on market mentality from the ’90s.

The dynamics of today’s market are vastly different than they once were. And using the same approach that once was based on category definitions largely determined by retailers and manufacturers no longer applies. The consumer is in charge. And unless the process is reinvented to put a spotlight on “need states,” “convenience” and “solutions,” I fear that many will keep doing what they’ve always done anticipating different (and relevant) results.

This is a great discussion that needs to be broken down for precise fact finding and updated for connectivity purposes. What is missing in the issues needing attention is a measurement tool to determine executive and management abilities. Do the strategic membership of company managers at all levels understand the proposals identified and can they implement these needs successfully with immediate return on investments? As a part of downsizing to control costs I suspect that there may have been several overly-aggressive steps made that are now being required with a cost savings predicate yielding less-than-expected management capability results.

Another disclosure needed is if the companies slow to start these needs completely understand the ramifications of failing to address the steps outlined and how to implement in spite of funding shortages.

Category management rapidly devolved into a shelf space allocation and item assortment process. It (perhaps necessarily) dropped to the lowest common denominator because that’s what retailers could execute. Efforts to do more were usually wasted. I vividly recall doing a store-level category plan for one major retailer of the day at the request of the category manager — and at some considerable expense to the sponsoring manufacturer. After the review, the CM said “Great, exactly what I wanted to see! Now, can you roll that up to the warehouse distribution area level? That’s the lowest level we can execute at.”

You won’t be surprised to learn that the next stop after the retailer meeting was the local pub. The client needed one worse than I did!

Until we get past that — and fewer do much more than that with the CM process today — efforts to redefine the process and use predictive shopper data proactively will be wasted.

The revolution in leveraging shopper data requires a complete re-thinking of the category management model. Today, grocers can easily and inexpensively gain powerful insights from shopper data that inform every aspect of their business.

Leading retailers today, including Kroger, are using shopper data to make decisions about their assortment and relying less on category management techniques. By understanding the buying habits of its key shoppers, grocers can make more strategic decisions about the categories and products in their stores.

There are almost as many flavors of the CM process out there today as there are brand marketers and retailers. Some have worked out ways to streamline the category assessment and data visualization process. Others have developed strong practices on the assortment and space management fronts.

Even where there is solid CM planning in place, however, in-store implementation frequently lags badly. Planogram and promotion compliance remains spotty. With rare exceptions, weak forecasting and re-ordering processes propagate pervasive inaccuracy (see point  number two above about decision support).

Furthermore, few to none have made headway on incorporating new and pervasive shopper influences from outside the store, such as social and digital media (point number three). In the present era, relying solely on in-store metrics is like wearing blinders.

So the supermarket industry should welcome a bit of prodding from FMI and its partners. The efforts of the Category Management Association, which Zel references here, are also to be commended. More than 25 years after the introduction of Category Management, updating is needed. Inertia and stagnation are bad for business.

Tough subject. Having watched the birth of direct product profitability, space management and the development of category management as a construct to apply those early analytics to the business, I think the “biggest shortcomings” are twofold. First, the original disclaimer of “this is a combination of art and science” has allowed most retailers to avoid the investment in systems and personnel necessary to support a robust CM strategy. The “art” piece is often equated with some internal wisdom unique to that operator. The only place that “art” should live today is in the new item decision process, where money also has a voice. Second, the industry’s adoption of data-driven customer rewards programs looked like a great way to finally bring the consumer reaction piece into the process. But privacy concerns soon clouded the obvious benefits. Sure, a few operators have integrated this piece of the puzzle, but fewer still use the obvious next step — predictive analytics. Wait, make that few physical store operators. Seems to be not an issue in the digital commerce world. So… Read more »

Traditional category management is now an old concept in today’s very competitive market. Retailers need a new solution to enable the level of differentiation necessary to attract new shoppers and indeed keep their existing shoppers.

Retailers are far less customer-centric than they claim to be and not realizing that the customer holds all the cards in today’s modern retailer/customer relationship can be the downfall of many. Both retailers and suppliers need to be super attentive to their customers’ expectations and everyone in the organization needs to be totally focused on the consumer and their wants and needs. Retailers need to walk in the shoes of their customers and ask themselves what the experience is like.

Suppliers need to walk in the shoes of their retailers and understand each retailer is different and the “one size fits all” approach no longer works.

There have been great advances in loyalty data and even proximity mobile data. Why aren’t more retailers and suppliers using this data in the category management process?

I do not think the category management process needs to be transformed as the slotting level, but more of a guide/finder service for consumers.

Leave the slotting alone, but create the technology/solution/experience that help the customer navigate the store to find the product mix for their end cooking/serving solution.

The issues that we have always been dealing with, as we have worked to implement the key and sound principles of category management have always been data, technology, process re-engineering, people, and time. The customer has always been at the center of the process, but continues to be subordinated in the rush to check the boxes to complete the process. 1) We have plenty of data — customer, sales, new items, demographics, etc. 2) We have the technology, though is continues to evolve and improve with better total supply chain integration from manufacturer to the shelf edge. Work is still needed here, but some companies have the end-to-end connectivity of process and information flow that better enable the institutionalization of category management business processes. 3) The better retailers have adjusted their business processes to incorporate supplier planning, category planning, shopper data analysis, logistics planning, etc. 4) People remain the weak link due to the lack of focus on continuing education as people move across categories, roles, and companies. Questions to ask — Are the new category managers… Read more »

These study results are almost laughable. The vast majority of retailers never implemented Category Management; all they did is change the buyer’s title.

ECR, also known as Early Consultants Retirement, contained many good ideas and concepts. The problem is, retailers had to keep the business running so they never had time to implement ECR components. If retailers had been serious, then most category mangers would have marketing degrees. Few do.

Too often, companies simply change the name of a title and profess to have implemented something for which they have no real understanding. And we wonder why the industry keeps making the same mistakes over and over.

Yes! It is time to retire and move beyond category management. I suggest everyone take time to read the FMI, Winston Weber, Deloitte “From Category Management to Shopper-Centric Retailing” report. The report presents a strong case for change, it outlines the limitations of category management in today’s shopper-centric environment, and it defines the magnitude of change required. Necessary changes mentioned in the report include realignment of retailer organization structures, reengineering of core merchandising processes, upgrading of skills to support the new business model and evolving to a truly shopper-centric Shopper Solutions Planning process. Building on the foundation of category management, Shopper-Centric Retailing is more than just a dream. Two retailers are currently at various stages of implementing the new business model. The words category management have been stripped from their vocabularies, organization structures and business processes realigned and Shopper Centric Solutions Planning is in place. Others are planning to follow. The future is here. We are well beyond terms such as category management, CatMan, CatMan2 etc. I should mention that being recognized as one of… Read more »