Rethinking Category Management from Strategy to Execution

In a world before social media, mobile apps and smart phones, retailers and manufacturers had very little visibility into shopper insights without investing in focus groups and surveys and manually gathering data. Decisions were based on intuition and whatever data they could uncover. Shift to today – manufacturers are faced with an opposite problem, where a mountain of data and consumer information is widely available from a number of sources. In fact, there is so much data that retailers are challenged to understand how to implement merchandising tactics effectively based on changing consumer trends.

A notable report comes from IDC Manufacturing Insights, which recently published its Business Strategy: 2012 Supply Chain Survey-Manufacturing Priorities and New Technology Adoption. In the report, Simon Ellis, IDC Manufacturing Insights Practice Director, writes, “Consumer-facing manufacturers have an opportunity to redefine their core relationship with the consumer through mobile and social media tools; or the ability to apply next-generation analytics to massive new sources of data (both structured and unstructured).”

What’s interesting, though, is that while many manufacturers jump at the opportunity to implement some of the intelligent analytics offered in the industry, they don’t necessarily rethink the end-to-end processes and capabilities, or the effects to their upstream and downstream processes, to reap the promised benefits in a sustainable manner.

Market data in many different forms offer critical inputs into the merchandising process because they are more available today. However, different groups in the company should not use the data in isolation. For example, marketing can use the data to drive promotions, but space management may use the data differently, using a different set of assumptions to develop space strategy. The disconnected processes may result in missed opportunities and flaws in execution.

In the following video interview, I outline what the new age of category management means, what’s driving this change and how manufacturers can leverage consumer insight and data to build more targeted assortment strategies and a localized shelf execution plan to drive sales growth and profitability. If this topic interests you, you might also want to read an article I recently wrote titled New Age of Category Management, published in JDA’s Real Results Magazine.

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