Refresh your Category Management Approach with Strategy

Working with many manufacturers and retailers is a great privilege for me, and one that gives me the unique perspective to help identify broader issues and opportunities for our industry.   A recent opportunity that was identified by Tom McDonald (Category Management Association) and I was to improve the connection of what we do in category management to the Shopper.   

How do we better connect with Shoppers?  It starts by focusing on the big picture - including defining your department's purpose, and identifying your expected outputs AND inputs.  By delving deeper into your inputs - including data, tools, strategy, processes and people (based on where your biggest gaps are) - you can uncover ways to improve your overall approach.

These improved inputs can change your game!  Are you ready? 

Although it may be difficult to get out of your comfort zone and start to think about ways to make changes to improve the future for your department, there are three steps that can get you started.

Establish YOUR Category Management Purpose.

Start by identifying the purpose of your Category Management organization.

Your purpose includes the “contracts” you have with your internal and external customers and it is an important component for you to have well defined before you can effectively design your team and its corresponding output.

Here’s a general example of what might be a purpose for a retail organization.

“The purpose of the category management team is to increase shopper satisfaction in our categories through the development and execution of strategic category plans that increase sales & profits in our category(s) along with our vendor partners.”

Think about your current situation, and whether there is perfect clarity in the purpose for the category management group that you lead.

Once you’ve established your purpose, you will need share it with and get approval from your manager and senior management.

The purpose should be something that, once approved, is well understood and aligned to across your category management team, and communicated to the broader organization.

Identify YOUR Category Management Outputs

The next thing you need to do is identify the outputs expected from your category management team based on your overall purpose.

In other words,
What are you trying to accomplish?

Examples of Category Management Outputs may include:

For retailers …

The development of a category plan (and corresponding execution plan), based on the category definition & structure, roles, Shopper and category insights, scorecard, strategies, tactics and product supply considerations defined for the category. This plan will help the retailer achieve their goals for the category and guide

For manufacturers …

The development of an internal category plan (or brand plan, depending on the manufacturer) and strategy based on the same principles as the retailer. It’s also the outputs as required by the retailer to help them develop their category plan, based on their category management approach, by way of category captains, vendor advisors, analysts.

If category plans don’t exist or only exist in part for both retailers and manufacturers, the results will be limited. If manufacturers only focus on brand and not the broader category outputs, they’re not really doing category management.

Identify YOUR Category Management Inputs

The next question to consider is what are the inputs for a category management organization in order for them to do their work?

In other words,
What inputs are needed for your
category management team to create their
required outputs?

When I pose this question to category management leaders, many respond with “data”, “tools” and sometimes “people”. But if you only have these as your inputs, you’re going to limit your category management approach, and ultimately your outputs.

The other two components are “strategy” and “processes”. Without the category management strategy and processes for your organization you will lack efficiencies, alignment and a common approach to the business. Everyone does their own thing, business development teams and category teams have their own reports and methodologies, and the wheel is re-created for each team.

Interestingly, “internal alignment” is the new first step in the category management process, whose foundations stem from well-defined internal strategies and processes.

So the inputs can be categorized broadly as:

• Data
• Tools
• People
• Strategy
• Processes

The opportunity for category management leaders (both retailers and manufacturers) to think about your scenario, what’s available to you, and identifying your gaps and opportunities for improvement.

If you’re interested in evaluating your category management opportunities as a category management leader, we’ve developed some great materials for you to access, as well as a Leader’s Forum webinar to help you get started.