Wellness professionals, in addition to being focused on better health outcomes for their clients, have a strong interest in how business affects their profession.
As the parent company of the Retail Dietitians Business Alliance (RDBA) and the Category Management Association (CMA), the Association for Retail and Consumer Professionals (ARC) believes the stronger the linkage between health and commerce, the better for everyone. Furthermore, wellness experts — owing to their credibility in matters of health — are uniquely positioned to make a positive impact on the goods consumers see on the shelf.
To this end, we’ve put together a series of FAQs on category management, which is broadly defined as how retailers and suppliers work together to meet shopper needs.
- What is category management?
Put simply, category management is the finely orchestrated teamwork between a retailer and a manufacturer to meet the needs of the shopper. The process should involve the development of a comprehensive, data-driven plan to optimize the 4Ps – product, place, price, and promotion – to drive superior business results for all parties. Category managers within manufacturing companies partner with category managers, merchants, or buyers at retailers to define product categories across the fleet of stores, optimize product placement, measure performance, and adapt.
- What are the benefits of category management to an overall retail organization?
Let’s begin with the shopper. Done correctly, category management drives increased shopper satisfaction and loyalty. For retailers and manufacturers, customer-centric category management can lead to increased margins and sales through an increased strategic focus on the business. In the ideal state, retailers stock the supplier’s right products, at the right inventory levels, at the right prices to optimize sales.
- What are the three key perspectives to consider in category management?
It all starts with the perspective of the shopper making the purchasing decision. Each retailer holds a unique place in the market and appeals to a distinct set of shoppers. If the shopper’s vision isn’t captured by the retailer and supplier, no one is happy, and the shopper goes elsewhere.
We now move to the retailer and supplier part of the equation. Suppliers ultimately sell products to retailers, so retailers are their clients. Retailers should make use of a manufacturer’s category and market knowledge to develop an optimal strategy on the shelf. Retailers also hold the responsibility of clearly communicating their needs to suppliers, as they are the ‘front lines’ to the shopper.
Suppliers, meanwhile, are charged with understanding how the shopper interacts with their products. Suppliers who understand how their product(s) interact with the category as a whole — and how they can fit into a retailer’s goals — will have a leg up.
- How do vendors and retailers work together in the CatMan process?
Let’s call this “sharing is caring.” The strongest vendor-retailer relationships are rooted in trust and partnership. Retailers will occasionally designate “category captains,” retailers with the size, scope and know-how to be key strategic partners in winning the category. These relationships entail the sharing of shopper insights and other analytics, as well as labor assistance on drawing planograms and category plans. Most of all, these captains are expected to provide honest, unvarnished feedback.
- What are the four key inputs to practicing category management effectively?
Industry experts agree that these steps are necessary to get the ball rolling:
- Quality data on your category, market, and shopper behavior, consistently updated.
- Data automation. The underpinning of CatMan can’t be manual processes. It just won’t work at scale.
- Collaboration between retailers and manufacturers. Remember: Sharing is caring!
- Full company-wide adoption. Everyone is on board, no holdouts.
- What is CatMan 3.0?
Let’s start from the beginning. Introduced in the 1990s, CatMan 1.0 was the basics of category management, the foundational steps. In 2016, the CMA launched CatMan 2.0, bringing some much-needed updates to reflect the changing worlds for retailers and suppliers. However, CatMan 2.0 largely focused on brick-and-mortar stores — and as we know, it’s no longer a brick-and-mortar world. CatMan 3.0 is designed for an omnichannel world, winning at both the physical and digital shelf in concert with each other.
- What are the seven key steps of the category management process in CatMan 3.0?
The steps are:
- Insights Immersion: To begin, the shopper’s wants and needs must be collected, analyzed, and understood.
- Category Definition: Here, guidelines are set in terms of what is in or out of the category. Again, the shopper’s insights guide this decision.
- Internal and External Alignment: First, suppliers and retailers meet internally to level-set on their own expectations for success. Then, it’s time to partner towards meeting the common goal of winning the shopper through a comprehensive business plan.
- Goal Setting and Scorecard: Success cannot be determined if there are no objectives and no metrics. A true category plan can’t be developed, or be executed well, without some agreed-upon measures against the goal.
- Tactics: This is where the “Four Ps” (Product, Price, Place, Promotion) enter the picture to develop the right assortment, in the right spots, at the right cost.
- Plan Implementation: Now, it’s time to act, against a clearly defined timeline.
- Measure, Learn, Change: Plans cannot be permanent, and they must be adjusted over time. Retailers and manufacturers should meet at a regular cadence to review performance and make alterations as needed — always keeping the shopper in the center.
- Do all retailers and manufacturers employ category managers?
Category management isn’t a universal function, but the bigger a company gets, the more useful the discipline becomes. That being said, all businesses are wise to implement at least some of the discipline’s best practices — and good businesses, no matter how small, are likely carrying out some of CatMan’s steps in some way already. And as you’ll see below, health and wellness professionals would do well to generally understand category management.
- As a health and wellness professional, how does category management impact your business, and why should you have a handle on the general process?
The partnership between dietitians and category managers in supermarkets is mutually beneficial. Dietitians bring credibility and expert knowledge, helping health-conscious consumers make informed choices. Category managers provide a broader platform for dietitians to positively impact public health. This collaboration aligns the supermarket’s product offerings with consumer demands, transforming it into a hub for health and wellness. Health-driven promotions and product placements, combined with nutritional advice, boost sales and brand loyalty. Consumers now enjoy a holistic shopping experience, where supermarkets offer not just groceries, but also knowledge about food’s health implications. In today’s health-conscious and brand-savvy era, this partnership turns supermarkets into frontrunners in promoting health and ensuring business success. As health remains a top concern for consumers, this collaboration bridges the gap between retail and wellness. Members can login and learn more about the strategic partnership between health and wellness professionals and category managers in the supermarket industry in this Health and Wellness Community resource from SupermarketGURU Phil Lempert, here.
Interested in more information on Category Management? There’s a plethora of resources from the CMA at catman.global/resources. Additionally, find more health and wellness resources at the newly launched Health and Wellness Community website, retailhealth.global.