Category Management as a well-defined standard has evolved over the last 3 decades, since the ECR movement of the Nineties. The strategy and importance of data-driven decisions has grown to become the center point of the process. It is no longer just about Point-of-Sale (POS) or market data but having data that can be ingested into Machine Learning (ML) algorithms to give us insight to action quickly. Enriched data with data science needs to provide insight and understanding of our customers to create better offers in our product portfolios. There is a need to create persona-based marketing and micro-segmentation strategy in our assortment process based on consumer insight.
Catman 4.0: leading with technology, data, and innovation to drive differentiation and brand loyalty.
Understanding the shopper need state, consumption frequency, and conversion are the bread and butter of today’s shopper insight. It is no longer about the category being Destination, Routine, Occasional/Seasonal, or Convenient; The strategy must be focused on persona and relevance to the shopper. The Destination, Routine, Occasional/Seasonal and Convenience are still important building blocks and the foundation for category direction, but today’s shopper is no longer only at the physical shelf. Data and ML can provide deeper shopper insights to segments and micro-segments in the need state process. In addition, data provides understanding about frequency, how shoppers participate in the category and the spend is important in understanding incremental opportunities for category expansion- Not just expansion of the category itself but also SKU reduction in order to create space for expansion into new or existing categories.
With product availability challenges increasing in the supply chain and the impacts of Covid-19 including increased online sales, we can no longer wait for the next line review. We must leverage data in ways that will drive a greater experience regardless of consumption modality. Category definition, incrementality and growth are important as well as continuing to build your brand equity. More work must be done on strategic intent in order to capture the consumer.
As we close out 2020 and look ahead to 2021, these are the 10 questions to ask yourself regarding your category management processes.
- Is our data AI/ML investment ready? Can the information be ingested and mined to give us patterns and insights to directional trends of the consumer?
- Do we have differentiation in our own brands strategy?
- Do we have a strategy to identify shopper personas?
- Can we differentiate our assortments based on needs states, frequency, price, usage, and consumption point?
- What CRM solution provides us a customer data platform for the secure ingestion of data needed for today’s category management processes?
- How do we collaborate with our suppliers to align on not just category direction, but market direction, usage needs, category expansion opportunities and SKU reduction processes?
- What will be our promotion strategy for our most loyal customers i.e. digital flyers?
- Does my consumer need state (AKA Consumer Decision Tree) reflect micro segmentation?
- Do I have the right technology in place to drive understanding of the consumer, patterns, trends and opportunities?
- Do I have In-store technology to provide feedback on a frequent basis from scanners or IoT devices regarding space planning compliance, out of stock and higher demand inventory needs?
Internal strategies to maintain and increase share of wallet are critical to retail survival. You need to understand your data as part of an overall analytical strategy. Collaborate with your most trusted suppliers, and make process changes to your category management & assortment processes in order to drive growth.
Are we at Catman 4.0?
We would say yes and moving to Catman 5.0 quickly! Technology (AI/ML) will be the forefront of ingesting and stitching together the key consumer insights to creating productive growth categories. Brand building will be a focus, but you must understand your buyer personas, need states, and segmentation strategy for your shoppers. These process changes will begin to create category opportunity and increase your share of wallet. Start planning now for how you plan tell your story and differentiate with innovative products, solutions and creating continued loyalty to your brand.
Plantensive has the team to analyze your data, understand your direction and provide a roadmap to ensure you have the right strategy in place. Let Plantensive provide a comprehensive assessment of your data, business goals, understanding of solutions, and provide a plan of action to begin or continue your journey to a sound segmentation strategy. To get started, contact us today!
Author: Todd McCourtie