Pardgroup_category management

Category management: what are the issues?

Today we would like to share some thoughts from Veronica Todaro, Project Manager in the Field Marketing division of Pardgroup.

How often in our professional lives have we found ourselves having to implement category management projects? And how often have they proved to be truly successful operations?

As we know, category management is a sophisticated retail marketing concept shared by industry and trade alike, aimed at ensuring an offer that matches market expectations and consequently improves sales results. It simplifies purchaser decision-making processes by giving clarity and enhancing the options available at the point of sale, where they are assessed by the final consumer. On paper it looks like a structured, linear process with a bright outlook. But what are the main issues that arise with this approach when we talk about the point of sale?

The first thing that comes to mind is space. Space is the overarching variable that affects every operating choice at the point of sale: an ever-present obsession shared by all operators in the trade universe – except of course for those who live online.

Space is located, assembled and disassembled, bought and enhanced. It is extremely flexible, more than many companies often think. Whenever a fee is paid for an area we don’t always find the implementation of the concept that was worked out at the head office. This misalignment can be the result of many factors: maybe the display surface area is smaller than expected, the department manager prefers to display merchandise other than the goods specified, or there is little enthusiasm for putting displays where they might obstruct walk areas. Store directors are becoming increasingly autonomous in their decision-making and this can sometimes also hinder implementation. Let’s recap some of the most common management errors: failure to map dedicated spaces inside the point of sale; accounts do not always have a good knowledge of the dynamics of ongoing activities and of the scale of clustering and store layout plans; sometimes the point of sale hears about a flyer launch with a very short notice and fails to react promptly enough for the complete and proper implementation of all aspects of the promotion. Or, alternatively, companies themselves may define a space based on their own notions of category management, which may not always tally with the actual needs of the point of sale. Here’s an example: It may happen that a badly performing category is given shelf space that’s overestimated in comparison to actual rotations. Or maybe there is a lack of input about assortment updates, so that new planograms are not handled and transferred quickly enough. With the arrival of new merchandise at the point of sale, the temptation to immediately get the new products on the shelves may compromise the planogram arrangement.

In general, what’s missing is a solid basis for good working relations between the partners involved and, in particular, between commercial and industrial enterprises.

As we have said, sub-par communications often lead to undesirable practical consequences: poorly selected product assortment with regard to reference target and margin potential, incomplete implementation of planograms approved by headquarters, or points of sale with insufficient information on promotions. It often happens that points of sale don’t match product prices with those set by promotional operations or don’t accept the POP positioning of material – itself backed by significant trade marketing investments – or don’t fully take advantage from new launches and accessories accompanying the products.

On the shelves we can often find items that have not generated value for consumers and therefore divert space and resources away from product innovation. So why not get the

Read alsoHow can we support in-store customer experience?’

This post is also available in Italiano