8 Ways to Move to More Advanced Category Management Analytics

Learn how to build strategic thinking into your analysis to understand more advanced Shopper solutions

I’ve been writing and speaking about the components of category management which relate directly to the Category Management Association’s certification requirements, including:

  1. Steps of the category management process and the importance of Retailer strategy;
  2. Key data sources available and the different data insights to uncover;
  3. Drilling through data (including in a limited data environment) to discover strategic insights; and
  4. Assessing the health of your business.

The opportunity? Think outside the box, incorporate strategy into your choices and recommendations, dig deeper only when necessary and tie in insights and opportunities with action through the category tactics. Once you've done this, the next step is to move to more advanced category analytics, including dimensionalizing business driver results from a threshold perspective and predictive analytics.

Here are some resources to help you move to more advanced analytics:

  1. Complimentary Download: Analyzing Key Business Drivers Through Thresholds
  2. Course Video Preview: Advanced Analytics: Relativity
  3. Course Overview: Advanced Analytics: Relativity

8 Ways to Move to More Advanced Category Management Analytics 

1. Start “higher” in your analysis: 

Before starting an analysis project – particularly if you’re going to do an in-depth tactical analysis (for example an assortment, promotion, shelving or pricing analysis), start with a bigger picture perspective.  Take some time to review the category and trends from a big picture perspective. Look one or two levels above in geography – not just retailer vs rest of market or remaining market. For example, look at the national market across key channels:
  • Who’s growing and declining?
  • How does this compare to your region and channels?
  • And how does the Retailer / banners compare to these results?
These insights can give you some perspective on the bigger picture opportunities that you can then incorporate into your tactical analysis and recommendations.

 2. Drill down for better insights: 

Drilling through data gives you a broader perspective of your business results.

  • Look at more than one time period (at least one long-term and one short-term period, for example “latest 52 weeks” and “latest 12 weeks”) to understand short- and long-term trends.
  • Look across different segments based on the consumer decision tree to consider the Consumer or Shopper in your analysis.
  • Look across different data measures to consider volumetric and share results as well as tactical results and trends. Click here to see a video on drilling through data.

3. Don’t be linear in your analysis: 

When completing analysis, use multiple data sources: Retailer point of sale data (syndicated market data, market gap opportunities, comparison vs market); Consumer panel data (consumer demographics, consumer purchase behavior, heavy / light buyers). We’re taught how to pull and use each data source in isolation with more of a tactical approach to the data. The opportunity is to learn how to look across data sources and incorporate insights from one source to help you make better decisions in business issues or opportunities that you are trying understand. This will take you from “good” to “great” (or even “amazing!”) in your analysis and insights. My Tip #8 below can help you with this.

4. Don’t generalize what your numbers mean: 

Think beyond a number. If you tie in with strategy or find relevant benchmarks to compare against or create volume opportunities, the numbers can become much more meaningful. Here are some examples:
  • When using a fair share index, don’t assume it’s “good” or “bad” based on if it’s above or below 100.  Think about how the index relates to the goals and objectives for the category, target Shopper and overall Retailer strategies. Click here to learn more about Fair Share Index.
  • When using consumer purchase behavior, compare to numbers that help establish benchmarks to determine where the opportunities are. You'll only know if a penetration or share of requirements measure is high or low by comparing with other Retailers in the same category or comparing to related categories.


5. Incorporate Retailer strategy and Shopper into your analysis:  

Retailers need well-developed strategies that relate to their store formats, the tactics, Private Label and their target Shopper. They need to incorporate these overarching strategies into their category decisions, including data analysis, insights and decisions for their categories. The strategies give a Retailer the guidelines, principles and processes associated with the most important elements of their strategy. It helps your retail teams make the best decisions for their categories based on what the Retailer is trying to accomplish. The better articulated the strategies, the better and more aligned the decision making for your retail organization.  


6. Think “category” and “brand”:  

Start looking at your business through a category, subcategory and brand lens. Looking at the category and subcategory levels gives a broader Shopper perspective and allows you to understand the business based on the most important segments for them (based on the consumer decision tree). This
understanding also helps you uncover better solutions for your brands.

7. Incorporate Retailer strategy and Shopper into your analysis: 

Don't forget the Retailer's strategy and their unique Shopper when you are completing any type of analysis for them and making fact-based recommendations. Whether you're creating an assortment analysis, doing shelving work, creating a pricing analysis or setting up promotions for next year, remember to check back to their target Shopper and overarching strategies to make sure that the recommendations you're making match well with what they're trying to accompish.


8. Use thresholds in your analysis:

Thresholds can be applied to your analysis to give perspective on whether the business drivers we apply to our business are actually driving sales. This can be done across the tactics. For example, we can measure SKU (or item) efficiency by looking at the number of items that each brand added in this period, as well as the $ share of each item, as indicators of efficiency. Then we can bucket the results together to look from a different perspective for the # items change vs year ago.

My example above includes some data measures related to product availability, or sku efficiency, for a specific Retailer. Any brands that have grown by less than 2 new items over the time period have their volume under the first two columns for this year and last year sales. Any brands that have grown by more than 1 item over the time period have their volume under the last two columns. Next, I sum the brand volume for each of the different thresholds and compare their growth.

So in this example, brands who brought in less than 2 additional items into the category grew by 6%, and those who brought in 2 or more items grew by 2%. The thresholds that you assign are arbitrary – in this example, those sku’s with less than 2 or more than 1 items. You may need to play with these thresholds or use the category average as the threshold.  

Also, different measures may be relevant for different categories. You should include at least one measure across each of product availability, pricing and promotion, also including baseline and incremental measures. 

Moving to more advanced analytics also includes predictive analytics including collaborative filtering, clustering algorithms, regression models and time-to-event models to name a few. The only way you'll be successful in these more advanced approaches is making sure you keep some of the tips above in consideration.
I hope that you found these tips useful! Have a great week! 

Downloadable Document to "Analyzing Key Business Drivers Through Thresholds" from Category Management Knowledge Group


Looking to move to more advanced analytics? Category Management Knowledge Group can help you, your team or your organization learn more through a single course or a customized program. We have some great category management training options available to meet your needs.

Check out our accredited course on Advanced Analytics: Relativity or watch a video preview of the course by clicking the graphic below.  




Link to Purchase "Advanced Analytics: Relativity" Category Management Training Course

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Topics: Retailer Solutions, Category Management, Category Analytics, Executive Solutions, Supplier Solutions, Individual Solutions

Written by Sue Nicholls, Founder & President CMKG

Training and learning are my passions. I have felt privileged to have the opportunity to teach others since early on in my my career at P&G in the '80s (when category management was just beginning in North America). I have dedicated my work life to building and sharing this passion with others through active involvement in the industry, including long-term business relationships with large Retailer and CPG executives, development and influence on industry standards, curriculum, and conference education, thought leadership publishing and presentations at numerous industry conferences, and as a member on several university advisory boards. I am also an Adjunct Professor teaching consumer behavior in a Marketing Program.

I have developed over 150 hours of online curriculum, developed and facilitated hundreds of instructor-led training sessions, and had the privilege of working with retailers, suppliers and solution providers around the globe alongside an evolving industry. The challenge is to anticipate what's next and find ways to teach our students the skills required to compete and stay relevant.

Learning is a journey for everyone - individuals, teams, organizations, and yes, even training companies. You can't put training in a can, automate it and call it a day - it needs to evolve, be nourished, and continually improve. Through this blog and other channels, I share my years of expertise with our industry and believe that an open and ongoing conversation can improve any team’s capacity to implement business strategies that achieve their strategic priorities.