What is the strategic level of your team or organization when it comes to Space Planning and Efficient Assortment? Space planning and efficient assortment are BOTH very important for Retailers and Manufacturers — so why are they treated so tactically? Why don’t teams and organization consider more advanced shelving solutions and take full advantage of opportunities to reach the Shopper? Read on to find out some common mistakes on both sides.

Last week I talked about how to build Private Label strategy through the category management foundations, with focus on topline category assessment results through market share, demographics and interaction data. As you might remember, Retailers need to ensure these profitable private label brands offer competitive differentiation by using the same strategic category management and fact-based approach for national brands and total category. This post, we are going to dive into private label pricing.

Private Label / Store Brands can be key differentiators for Retailers and can be used as a strategic weapon that separates a Retailer from its competition. Once Shoppers get hooked on a Retailer’s Private Label / Store Brand, they have no choice but to shop there. But how can they achieve this loyalty? Create a better private label strategy with two Category Management Foundations.

Collaboration is on many organization’s strategic plans, with effective Joint Business Planning (JBP) being the outcome. Retailers’ and Vendors’ have the opportunity to determine mutual areas of interest and build their businesses in a collaborative way — namely by taking steps to improve Shopper satisfaction with a better experience. However, effective Collaboration and JBP require more than a desire or written strategic plan. Both require that your organization undertake 3 consecutive steps: Prepare your organization internally for collaboration; Align your internal approach across your multifunctional teams through common training; and Implement external Collaboration and Joint Business Planning. Collaboration and Joint Business Planning can help both Retailers and Vendors manage the change that continues to dominate, including: Changing partner needs and expectations between Retailers and Vendors Changing market and Shopper, Less resources available internally due to downsizing / consolidation, and Increased requirements due to more and bigger data and a more complex Shopper.

Selling is a requirement in any business. In the retail industry, selling takes place both internally and externally for Retailers and Vendors across departments and teams. There are multiple “Seller” to “Buyer” relationships, including: EXTERNAL SELLING RELATIONSHIPS the account manager or sales director (Seller); calling on the category manager or business unit lead at the Retailer (Buyer). the category analyst or vendor advisor (Seller); calling on the category manager, or someone else in the retail organization responsible for different components of the category review process (Buyer). the Retailer’s category manager with a new promotion or plan (Seller); calling on an account manager or sales director (Buyer). INTERNAL SELLING RELATIONSHIPS the category manager at the Retailer promoting an idea or concept (Seller); to their business unit lead or manager (Buyer). the Vendor’s category analyst or category management director promoting in an idea or concept (Seller); to the marketing director or sales director within their organization (Buyer). So when you think about developing selling skills, expand your concept of Sellers and Buyers beyond the Vendor’s sales team. The graphic below summarizes: Two critical components of any selling approach include your ability to create engaging and informative presentations that focus on your Buyer (either internal or external). These components include the ability to use software tools like PPT and to tell a compelling story with relevant, fact-based details to your audience. Both components are critical, and must be developed BEFORE you can focus on strategic selling skills.

Supply Chain Management is an important, but sometimes misunderstood, process for both Retailers and Suppliers. So many individuals, teams and departments impact the supply chain for both Retailers and Suppliers — understanding the implications of how decisions and recommendations affect the bigger picture is critical. In net, supply chain management includes planning and management of all sourcing, procurement and conversion activities, plus all logistics management activities. It includes coordination and collaboration with channel partners including Suppliers, intermediaries, third-party service providers and Retailers. Think of supply chain management as the link between major business functions and business processes within and across companies. It creates a cohesive and high-performing business model, including all of the logistics management activities and manufacturing operations. Supply chain management drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology.

How often do you think about the effect of your decisions or recommendations on a Retailer’s Income Statement? If not often, consider that matching what Retailers are trying to accomplish from a financial perspective will help Retailers make better decisions and Vendors make better recommendations.

Here’s what you need to know about achieving Shopper Satisfaction, Collaboration and Effective Shopper Marketing — Are “Shopper” and/or “Collaboration” on your Strategic Pillars? For most organizations the answer is yes, but many are struggling with how to get any traction. It doesn’t have to stay that way. To succeed, Shopper and Collaboration need to be well-defined and go beyond transactional, one-off projects. Both Retailers and Vendors should begin with these three steps: Step 1. INTERNAL COLLABORATION Before collaborating with each other, Retailers and Vendors need to get on the same “internal“ page. An aligned, collaborative approach to Category and Shopper across their multifunctional teams will include: Define Internal Strategies, Guidelines and Processes associated with their target consumer / Shopper, competitive differentiation, brand and category (including private label or store brands), category roles and strategies, tactical strategies and supply chain strategies. Identify Assets & Best-fit Business Partners, including data & tools, personnel and research. Not all collaboration is created equal and this is a critical step for any organizations who have “collaboration” on their corporate strategies for 2016. Train Multi-functional Teams on Category Management foundations, data and analytics, and category and Shopper understanding (see the FAQs later on in this blog). Step 2. EXTERNAL COLLABORATION Once Retailers and Vendors have their teams working toward the same goals with a unified strategy, they are ready to collaborate externally based on the partnership guidelines they established in Step 1. The Category Management Association has created a free whitepaper on “Strategic Collaboration for Shopper Satisfaction” that delivers big picture perspective on how Retailers and Vendors establish and maintain true collaboration. Step 3. SHOPPER SATISFACTION Through successful collaborative business partnerships between Retailers and Vendors, both can reach consumers with integrated Shopper Marketing across the omnichannel at any point in consumers’ Path to Purchase. Strategy& and PWC’s whitepaper on “Reimagining Shopper Marketing” identifies good models of brand building through omnichannel experiences.

Store clustering is no longer about grouping retail stores based on store size, geography and/or dollar volume. The first step towards true Shopper marketing is building a new set of strategies for store clusters (groups of stores that have similar Shoppers, performance and traits). Then, for individual stores, assembling the right resources with the right ideas and competencies. In short, clusters need to be based on Shopper-focused attributes. By understanding the different demographics within local communities where their stores reside, stores can better meet the needs of a larger range of people. This Shopper-focused store cluster approach enables Retailers to quickly identify clusters of stores with similar demand patterns and focus on the most important target segments. Below are 3 steps to build and define Shopper-focused store clusters.

Your success depends on you and your team’s abilities to utilize rapidly-advancing changes in data, technology and the Shopper. STRATEGIC PRIORITY #1. Improve Your ROI on Data and Technology Purchases. Why is your organization operating like it’s 1999 when it comes to maximizing data and technology? Category Management has now been around for over 30 years. Data and technology continue to evolve and advance, pressuring organizations to invest heavily in new data sources, advanced technologies and market research to better understand their changing and increasingly sophisticated Shoppers.