Now we delve into step five of eight on the journey to true category management.
Category strategies are used to fine-tune the category role to meet scorecard objectives. Strategize to grow market share, improve gross margin, gain customer satisfaction, and increase sales, foot traffic, return-on-investment and shopping basket size.
Strategies give a purpose to each category, segment and brand within the retailer. They are designed around a specific goal or retailer objective. Strategies can be developed at all different levels from individual items up to and including an entire department and should align themselves around the sales process and attaining a specific goal. Those goals should be incorporated and managed with the help of our previous step, a category scorecard.
To provide a unique flavor, or point of differentiation for the retailer in the market, strategies should differ within categories.
Always designed with the consumer in mind, the category strategy's goal is to connect certain retailer perceptions or products with shoppers. For example, a turf-defending strategy is one that relies heavily on competitive price points for popular top-selling items. This might include snacks and soda. A commitment to sell these items at a competitive price can establish the retailer as a market leader in these categories. That will in turn draw additional foot traffic to purchase other categories in the store. It's the balance of the different strategies that fuels the store’s sales goals and objectives.
Other strategies can be designed to improve customer satisfaction with image enhancement. An example of this strategy includes a commitment to providing helpful, friendly and courteous sales people to maximize the shopper’s in-store experience.
7 standout strategies
The aformentioned approaches are just two of the seven most popular, which include:
- Traffic building
- Transaction building
- Profit generating
- Cash generating
- Excitement creating
- Image creating
Manufacturers should work closely with retailers to fine-tune strategies and roles within specific categories, segments and brands in order to help the retailer meet scorecard objectives. This is why it is important to have a category captain or preferred manufacturer partner for each category. These invaluable resources can help the retailer better achieve their goals for long-term sustainable sales while remaining competitive in the market. The category captain should differ between individual categories.
Category captains shouldn’t be chosen by only selecting the top selling brand within each category. The smaller brands are sometimes the most capable of applying quality resources to help support to retailer. They may also be “hungrier” for growing the category. Unfortunately, few manufacturers in the natural channel really work to support retailers at this level. In my opinion, this is a huge missed opportunity.
Conventional retailers rely heavily upon manufacturer partners to help drive sustainable category growth. The natural channel could learn much from their mainstream competitors in this area. Manufacturers that are willing and able to apply resources to help support retailers distinguish themselves against their competitors. This can give them a competitive advantage in the aisles.