Category Management Meets The Supply Chain

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Category Management Meets The Supply Chain

By Brian Girouard, Consumer Products Lead, Capgem - 10/09/2014
New category management approaches are enabling a better choreographed dance between retailers and brand owners to avoid missteps in meeting demand. The dance beat that keeps it all moving requires a mix of technology, insight and collaboration. By proactively serving retailer needs with new technologies and approaches, brand owners can better support attractive shelf presentation, right product mix, effective pricing and relevant promotion. These solutions can make sure to have just the right amount of inventory, localization and foresight to drive incremental sales.

Here are five ways brand owners can arm retailers with the next generation of space and assortment planning capabilities and insights. As a result, they are experiencing increased sales as well as a more engaging dance with their retailers and, ultimately, end consumers.  

1 Providing Data for Localized Assortments
Many retailers still embrace a “same for every store” approach for assortment planning, resulting in a product mix that looks the same across the entire chain. Leading consumer goods companies can champion a move to more localized assortments by applying analytic insight that accounts for geographical differences, weather patterns, urban versus rural markets and socio-economic factors. CPG companies should consider leveraging new technologies to analyze data to assist the retailer in defining unique store clusters and identifying which products perform best in a given store cluster.

2 Offering Insight to Engage the Smart Shopper
Today’s consumers enter stores more informed than ever, having used digital technologies to research products. Many consumers already understand the product’s positioning and have likely read reviews, compared prices across channels, downloaded coupons, or viewed “how to” videos. If manufacturers fail to consider prior consumer experiences with the product and don’t deliver the expected experience at the shelf, the sale could be lost. Shoring up the consumer engagement strategy — both physically and digitally — is an important new step for effective category management.

3 Aligning Category Management and Supply Chain Management
Many consumer goods organizations align their category management team with merchandising and fail to effectively collaborate with supply chain and logistics. The supply chain organization plays an essential role in category management practices, such as localized assortment planning for unique clusters or markets. Tightening supply chain alignment allows for more effective product distribution to a retailer’s distribution center or store.    

4 Analyzing Staggering Data Volumes
Managing and analyzing point-of-sale data, loyalty card scans and consumer behavior insights across multiple retailers requires discipline and powerful tools. Not all consumer goods companies have the capability to analyze the data required to support the overall category management strategy.  Furthermore, additional value-added activities specific to automated planogram generation or electronic distribution of planograms are also often not available. Companies that invest in analytics technologies and techniques can share the big data findings to help retailers stay ahead of demand.   

5 Engaging the Right Space Planning Skills
Effective space planning requires a blend of art (visually appealing retail displays) and science (market basket affinities and economical presentation quantities). Structured analysis of retailer data and consumer-centric shopping behaviors should infuse the creative minds that create visual appeal. Companies should seek and retain professionals who possess both skill sets, which can be a difficult challenge.