July 19, 2016
Have you ever heard that old investment warning, “Past performance is not necessarily indicative of future results”? When you’re talking about successful category management in 2016, keep this idea at the center of your conversations. Conducting business as usual is, frankly, not going to work anymore. If you’re looking to win over today’s shoppers, you need to not only be innovative but agile as well. In other words: Take what you thought you knew about category management and blow it out of the water.
1) Start with Private Brands.
With the decline of national brands being felt everywhere due to lack of innovation, a decrease in quality, and the failure of traditional mass marketing efforts, there’s prime opportunity here to take a fresh look at your plan for category management.
When stocking your shelves, start with private label first instead of using it as filler. I can’t stress how revolutionary this idea is when you look at how things have been done historically. Think about the basic or core assortment that you need versus the additional items that are unique or innovative – this will help deepen the relationship with your shoppers and drive distinction in the marketplace. Next, selectively add in national, specialty and tertiary brands—with this strategy, you’ll be taking a bold step towards an increase in margins and delighted customers.
2) Report on more than analytics.
We love data here at Daymon, and in category management, it’s easy to focus strictly on reporting once you’re in the Category Review stage of the game. However, if the behavior you’re looking to drive is shopper loyalty (which it should be), look outside of reports to get the best overall picture of how your program is doing, such as:
- Consumer insights
- Shopper experience and feedback
- Industry trends
Once you have this information, that’s when you’ll really be able to differentiate yourself from the competition. Supported by your new data pieces, you can embark on the next phase of the category review with the following actions:
- Having an exclusive assortment of products (especially private brands)
- Executing well-managed categories and shelves (right products, right price)
- Providing great customer service experience (with trained and engaged store associates and in-store sampling)
Again, business as usual will no longer work here. You have to think (and look) outside the box in all aspects in order to make the shopping experience unique.
3) Always Ask: “How Can We Improve?”
Retailers sometimes shoot themselves in the foot by only reviewing their category management strategies a few times a year – or worse, only once a year. In an industry where change is constant, you should be constantly evolving. By only reviewing results every once and a while, any improvements will be out of date before you can implement them.
At Daymon, we encourage our teams to learn how to adjust on the fly based on reporting, trends and other data pieces I discussed in the previous point. Be agile, be flexible, and always be thinking of what the best version of a process or situation can look like. Sure, you can spend time on a fancy strategy, but I suggest focusing more on execution and implementation.
This is a really exciting time to be in retail, and the rapid growth of category management has opened up many opportunities for business goals to be achieved. Keep looking ahead, and remember that being different is the way to win.
Do you have thoughts on this topic? Send them over to me at JimH@daymon.com.