Category Management is Gaining Ground in Retail

Created about twenty years ago, category management is the result of a partnership-based approach between Wal-Mart, Procter & Gamble and Coca-Cola. It was then theorized up to define and promote good practices and codes of conduct in the relationship between the industrialists and distributors. The point was to better understand and meet the expectations of the customers by offering them the best assortments of products on the shelves. It is about going beyond purely industrial logics and integrating purchasing behaviors instead in order to retain customers in the long run. Over time, category management in retail has become more and more popular. Here’s why!

Category Management: to Deal with New Purchasing Behaviors

In a few years, purchasing behaviors have evolved and clients have become omnipresent and multi-channel shoppers. They even make some infidelities to their favorite stores. Actual buyers want to be able to influence the stock of distributors and allow themselves to ask a store to get supplies of some products it does not usually sell. Otherwise, they can go to another shop that offers them this favor. And with the new technologies of communication and the digital era, the pace is accelerating. Consumers are under increasing promotional and marketing pressure. Most people are more likely to buy a product only if it is on sale or is discounted. And because of Internet, they can compare the prices of the products they want to buy in real time. In this context, category management in retail provides effective means to better anticipate these issues. Given that it is based on a qualitative rather than industrial approach, it allows the different actors to understand what the client wants, but also how and where he wants it.

Category Management: the Customer Satisfaction First

According to the greatest brands’ category managers, they have to renew up to 20% of their products every year to keep seducing their clientele and increase sales. The subtlety of the job lies in the choice of the brands that please consumers. It is a question of building a real win-win-win partnership between the brand, the suppliers or service providers, and the distributor. This kind of synergy enables quality management on every level. Some CPG companies and retailers ensure that the different information is handled within the same department in order to have a global view of their activity and to connect the studies that they carry out with the realities of the field. Depending on the feedbacks, it is possible to adjust the offer very early in the innovation phase, for example. This solution which involves the main retail actors allows the company to maintain the desire of consumers but also to be seen as a quality partner with its stakeholders. One of the greatest strengths of category management in retail is also to generate trust between the various business partners.