The New Frontier of Category Management

Let’s start by stating the obvious: the Covid-19 pandemic has changed the living habits of all of us, and the effects of the changes can be seen in most economic and social activities.

But how has the pandemic affected category management?

The effects of the pandemic should not be taken as circumstantial: for example, the lockdown has dramatically accelerated the development of online sales, empowering e-commerce newbies to have their first online shopping experience.

And for many of them, this means having broken the ice and started a new shopping habit.

Moreover, the pandemic has also changed the concept and design of retail spaces, the stores. Social distancing regulations, individual protection of employees and consumers (and related traffic flows) are the hot topics behind the changes in the organization of aisles and shelves; at the same time, the rise of new shopping needs (and the suddenly growing demand for existing needs) have made it necessary for Retailers to revise assortments and spaces dedicated to different merchandise categories.

An integrated approach

In short, the effects have been evident on all levers of category management: floor plans, planograms and assortments.

Thus, the conclusion arises that an integrated approach in the management of the three levers is essential in order to be able to have floor plans, planograms and assortments in line with consumer needs, which, now more than ever, are in abrupt change due to new lifestyles and consumption habits.

Retailers’ offer must include consumer satisfaction as the first of the goals to be hit, and the “Customer First” approach today meets this need.

What does a Customer First approach mean and how is it achieved?

It is imperative that Retailers know their consumers perfectly and do not fail their expectations. In order to build consumer loyalty, the Retailer must strive to provide the customer with an optimal shopping experience in terms of meeting their needs with regard to prices, promotions, assortments, services and loyalty programs.

Category Management plays a key role in this, as it serves Retailers and collaborates with:

  • Analysis & Planning Specialist: provides critical insights into the introduction or elimination of products
  • Purchasing: provides “What-If” scenarios useful for formulating negotiation strategies based on assortment and/or supplier changes
  • Merchandisers and Operations: provides recommendations that anticipate market trends and changes
  • Suppliers: formulates “What-If” strategies for the introduction of new products or the elimination of underperforming products
  • Marketing: provides consumer data useful for elaborating customized promotional campaigns.

In an entirely new environment where competition is increasing, being proactive to changing scenarios is the only way to break away from the competition, and category management, as understood herein, is a key weapon for meeting the new challenges.