The very words ‘Category Management’ split those in the retail world into 3 groups; Those that think Category Management is old hat & consider themselves as ‘moved on’, those that are fearful of terms like conversion, shopper, eater & market share, because they don’t completely understand them, and those that believe they are practicing good category management & strive to be even better, regardless of what it might be called.
Whatever group you fall into, we would all agree that there is only one true goal and that is sales & profit, which will come easier to us, if we know what our shoppers want. To this end, putting aside what we call it, we have a puzzle to put together and that is the one that shows us the shopper and there are three key pieces. These 3 pieces are essential to getting sight of our shopper, what they do, why they do it and how they will spend more on our category. Without these 3 key pieces and if you are practicing category management your impact will be very limited.
The 3 Essential Jigsaw Pieces of the Category Management Puzzle are 1. Shopper Profiles, 2. Shopper Map, and 3. Shopper Segmentation.
1. Shopper Profiles
Retailers and suppliers once used the Acorn data of ABC1, ABC2, etc. across tables and tables to better understand their shopper. Whilst this is useful when done well, the challenge is to understand the shopper of our own category because they will be unique to us. Using qualitative and quantitative data the shoppers of your category can be identified and grouped into profiles. Ultimately the challenge is to then turn the stacks of data into a simple chart for everyone across the sales team to understand and make better day-to-day decisions as a result.
A Boston matrix showing the two main axis of the shopper, which might be frequency and enjoyment, will then help you identify that there are 4-6 shopper profiles in your category. You can then build on this simple chart with what the shoppers buy, what they don’t buy, and their barriers to becoming the next shopper profile. By doing this you will also identify sales opportunity values that will persuade the most ardent of non-category management fans that £xm is worth seizing.
2. Shopper Map
This piece in the Category Management jigsaw puzzle has the most amount of mystical fog surrounding it because it is also known as, ‘The Purchase Decision Hierarchy (PDH), ‘Consumer Decision Tree (CDT)’, or ‘Shopper Decision Tree (SDT)’. In essence, it is how we, as shoppers, shop the category. Those decisions that we make at the fixture without thinking.
For example, Chilled Ready Meals – The first decision is cuisine, e.g. Indian, the second decision is for 1, 2 or more people, and the third decision is likely to be a value for money decision of quality Vs price. Understanding how our shopper shops our category, is essential because once we know the first 3 decisions that they make whilst standing at our fixture, we can aim to make it easier for them to shop our fixture. The better we match the fixture to how our shopper shops, the happier they will be to shop and buy more. The best shopper map is probably chilled ready meals and the worst is probably wine.
3. Shopper Segmentation
Understanding how the shopper groups our products is very important because the impact on Range, Availability and Promotions is significant. Watching shoppers in focus groups, group products, according to what they understand, will be far different to watching people in that industry group the products. ‘Topfruit’ is an example of an industry term that is widely used in produce to describe apples and pears, yet shoppers have never heard of it, let alone used it to help them group products. Once your shoppers have grouped your products into their understanding, the challenge is to reflect this on the fixture as closely as possible, or, at the very least, plug the difference with excellent signage and packaging to help the shoppers make an informed choice.
Here are three examples on Range, Availability and Promotions of understanding your shopper segmentation; Range – By grouping the products as the shopper does, you’ll identify opportunities that were previously hidden by an industry segmentation. Availability – Rather than chasing 100% availability on all products you’ll begin to understand that shoppers can be happy to substitute one product for another within the same group. Promotions – By promoting products that are in different groups you can avoid shoppers just moving their spend from one product group to another, and encourage shoppers to spend more in your category.
Darren A. Smith, Founder of MBM, wrote this article for the IFE. He spent 12 years as a Category Manager for one of the big four UK supermarkets.MBM enable suppliers to the big four supermarkets to secure more profitable wins. They are from your industry delivering People Development. Using their unique ‘Sticky Learning’ you too can have the best people for the long term. Checkout their Category Management Training.