CPG Survey Reveals Trends in Customer-Centric Category Management

A number of retailers and analysts claim that “category management is dead” because it’s too product focused rather than shopper centric. However, the results of the Symphony GOLD third annual Category Management Survey suggests you don’t need to kill off category management to be customer focused.

Seeking to benchmark category management approaches, the survey polled 250 leading CPG manufacturers from across the United States and Europe. It identified forces challenging both retailers and manufacturers, such as a focus on how customization of multiple store formats are diminishing the relevancy of big-box outlets, as well as more granular assortments, and a data tsunami that's difficult to consolidate and analyze with existing systems.

Findings suggest that it’s possible to integrate customer preference, loyalty and behavioral data into the category management process. Customer data can be accommodated to influence assortments that are easily executable, and support relevancy to a store’s most valued customers in order to put them firmly at the heart of category strategy. There's also an appetite to increase effective collaboration to allow retailers and manufacturers to get closer to customers and achieve collective growth objectives.

Survey highlights include the following:

Granular Recommendations

Globally, 31 percent of manufacturers report assortment and space recommendations are made at the retailer level. This number increases to 36 percent in the U.S., dropping to 22 percent in the U.K., with a similar number (23 percent) providing plans at a more granular fixture level. While this indicates the depth manufacturers are required to provide assortment and space recommendations, it also reflects how different retailing landscapes have developed. As format types expand, manufacturers are being encouraged to make assortment and planogram recommendations focused on individual stores and fixtures in addition to overall banner.

Collaboration Delivering Visibility and Efficiency

 The U.S. and U.K. predominantly characterize their retailer-manufacturer relationship as mostly collaborative (46 percent and 40 percent, respectively), however across Europe it drops to 25 percent. While the U.S. and U.K. have embraced closer working relationships to drive partnership synergies, there are signs their continental cousins will follow suit. As shoppers come to expect greater product availability and relevant assortments, closer collaboration represents an opportunity. By embracing a more collaborative approach internally (departmental visibility) and externally (category partnership), both parties can improve the connections with their customers and drive a more efficient category process.

”Data, Data Everywhere … ”

 A high proportion of manufacturers are challenged with being timely in identifying category opportunities. Twenty-seven percent spend three days to five days consolidating data to support category insight, and another 26 percent spend five or more days. Consequently, organizations are unable to respond quickly to market trends and consumer needs. This puts pressure on their relationship and how they're perceived by retailer accounts. Where we've seen organizations address this challenge is by employing cloud-based solutions that enable retailers and manufacturers to assimilate data from multiple sources, creating a single collaborative category management environment that provides access to a single version of the truth. It supports decreasing the time to make decisions and the speed to market of category initiatives.

Assortment Priority Conflict

Although manufacturers globally report that 49 percent of retailers are demanding SKU rationalization and new product introduction, 48 percent of manufacturers globally would prefer to do opportunity gap assessments and advanced trending analysis. They would rather drive opportunities out of products that represent existing investments rather than new ones. Overcoming this division requires a collaborative category strategy to transform collective insight into timely and actionable planning that's customer centric in focus.

Winning organizations are those that invest in approaches and supporting technologies that not only integrate data with technology, but that connect people and processes with the capabilities necessary to increase category growth and employee productivity.

Matt Robinson is director of solution marketing at Symphony GOLD, provider of the GOLD unified software platform for omnichannel retail.