How to Make Retail Category Management More Than Just a Concept

For too many retail store managers tasked with driving store level profitability, the idea of successful category management has been mostly a good theory instead of proven practice.

In recent years, the shelf set and category management leadership may have been assigned to one of the vendors involved in the category as the Category Leader. An assumption that fair and reputable decisions would be made.

Or local managers dictated the look of the shelf set not based on real time actionable information but vendor friendships and sometimes token gifts on the side.

Now the ground is shifting to a whole new perspective.

In leading retailers around the world, transaction data is now moving from the dark confines of the back room virtually never seen by the executive suite to now being used as a competitive advantage.

But the real competitive advantage still depends on how and by whom that category level data gets used. This fact is the big elephant in the room.

Bringing Category Management From Concept to Reality

Retail leaders are proud of their IT departments and the rich silos of data that has been collected. It is sad but true that too many retail chains still can’t put that data in useable form for store level managers to use to improve their category management efforts.

If the executive suite can see real time transaction data from store level but that data is invisible to that store manager, then shame on that C-Suite.

Store managers shouldn’t be expected to make decisions every day that drive profits and still be left with no useable transaction data for every category in the store.

Who is the most effective partner now to the local store manager?

It should be the C-Suite empowering the IT department to put real time transaction data directly into the hands of store managers. Done right, store managers should be elevated to a new level of accountability and their personal compensation should be revised so they benefit financially if they make fact-based decisions that drive profitable growth.

In the best run retail stores, store managers and brand leaders are seeing dramatic financial improvements when armed with actionable data in real time and empowered to make changes and track the results.

What types of data are we talking about?

We are talking about putting a dashboard in front of the store manager allowing them to see every transaction activity in every category of the store. This should include sales and unit volume by SKU, margin contribution by SKU, impacts of discounts, trade incentives and promotions on volume and margin, shelf set planning, display planning, store format planning, out of stocks, SKU pricing, customer segmentation and many more elements viewed across multiple timelines.

In today’s world, backed by the sophistication of our computing resources, it is almost incomprehensible how any store level manager remains blind to this data set. And yet, it is still a common reality for many.

 

Karl Edmunds, Vice President of Salient Management Company, is a nationally recognized business leader and author with more than 20 years of experience working with suppliers, distributors, and retailers in the CPG industry. His focus is aligning technical solutions with sales, marketing, and organizational needs to drive long-term profitable growth.

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