Inside This Issue - Opinion
Category management under pressure to evolve
June 20th, 2011
Category management is a discipline in flux.
Mass market retailers and their partners in the consumer products sector have for years debated what exactly constitutes the practice, how best to implement it and what should be done to improve it. “Linked,” a new report from Kantar Retail, confirms that no industrywide consensus has yet emerged on those questions.
At the most basic level, the survey, which involved 350 executives from major retailers and suppliers, shows growing skepticism among the former about the importance of category management, with just 72% of them rating the process very or extremely important, down from 78% in 2009. By contrast, 81% of manufacturers view it that way, the same as two years ago.
Digging deeper, the report indicates that some of the disaffection among retailers stems from a narrow definition of category management, which restricts its impact to tactical matters involving a limited product segment. What’s needed, the study goes on to say, is a broader approach, one that augments the traditional focus on such things as merchandise mix and execution with consumer insights and shopper marketing initiatives.
Kantar’s work confirms the strategic thrust among the leaders in category management, which, not coincidentally, also happen to be some of the top performers in the retail and CPG arenas. The thing that underlies all of their efforts is a relentless focus on consumers and how best to meet their evolving needs.
One of those companies is Kroger, which manufacturer respondents in the Kantar survey ranked first among retailers in category management, more than 10 percentage points ahead of Walmart, which finished second.
As Kroger chairman and chief executive David Dillon said earlier this month when announcing the supermarket operator’s impressive first quarter results, "Our Customer 1st strategy is clearly connecting with consumers. We have shown that our focus on people, products, prices and the shopping experience is meaningful to customers through both good and challenging times."
By always keeping the consumer top of mind, Kroger has developed a robust category management program that transcends fixed concepts to achieve a larger goal, something that more retailers appear ready to do.