Several people have asked me questions like “when is the right time to do the Category Management?” or “what should I do first in Category Management, how do I start?” so let’s have a brief look at this.
To start with the question, when the right time is for Category Management (CatMan), the best answer is “now”. Many companies assume that CatMan is a onetime event what needs to be done and that’s it, but the truth is that CatMan is never-ending process. Why is that? Think 5 years back about mobile phone business and compare the technologies with nowadays – products change, new ones are created bringing also new categories and developing new needs for your consumers. And to be able to follow the time, CatMan process needs to be in place and running.
Now let’s go through the practical side of CatMan reviewing the steps of Category business planning. In the image you can see the main steps which are taken in the CatMan process.
Analyze – though most of the CatMan experts claim that the first step is defining the category, if you are already running a store or selling your products then it all starts with analyzing your current performance (sales, profit, movement data, OOS, shopper satisfaction etc.). This is the way to understand where your category is today, what works and what needs to be improved.
Define the Category – in this step you will need to define and segment the category showing which products will be present in each of your categories. The critical point here is to create the shopper based category definition meaning that the category is created based on the shopper perception about the product and where it belongs.
Define Category Role, Objectives & Goals – Will this category attract more shoppers? Is this category seasonal, impulse, supplementary etc.? How will it build the shopper basket? How will this category contribute to your overall strategy and how it will help in achieving your goals?
Develop Strategies & Scorecard – when the objectives and goals are set, it’s time to develop the plan on achieving them, setting milestones and creating a scorecard for tracking. The tracking on scorecard starts when the CatMan process is in place and implemented.
Create Category Tactics – sometimes this step is overlooked by paying attention only on pricing, though other components like category/ product placement, interaction with other categories, visual elements can be the ones bringing you the most visible sales growth results.
Implementation – this is one of the most difficult steps which require strong planning, organizational, follow-up and collaboration skills on all organization levels.
Review & Analyze – Category Management cycle continues and goes forward to monitoring and reviewing the results and modifying the business plan according to the results of analysis, customer trends and new products.
It’s important to remember that the main focus in Category Management is on shopper and his needs; only by understanding the shopper you can find the ways to please him, to help to find faster what he is looking for, creating the feeling of being a “smart shopper”, and this is rewarded by buying your products and returning to your store. Category Management can help you in growing your sales on average of 5-25%.