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Staying relevant and successful as a retailer in the years ahead will require keen insights on shopper behavior, knowing what drives consumers’ purchasing habits, and communicating with them in their preferred manner, which, as no one should need reminding, is digital.
This is the overarching theme of this year’s Category Management Conference, hosted this week by the Category Management Association in Las Vegas. It’s at this venue that CMA is officially rolling out CatMan 2.0, which takes merchandising concepts that were revolutionary a quarter-century ago and making them relevant for the new normal.
In short, it’s taking category management from simply the “what” people buy and, by leveraging the mountains of shopper insights data now available through the magic of technology, adding the “why” and “how.”
The idea was perhaps best summed up by Brick Meets Click founder Bill Bishop in his closing keynote address Monday, Sept. 12, on the conference’s opening day, “Charting Your Transition into Digital Merchandising.”
Retailing is a “dogfight” between traditional retailers and disruptors like Amazon, Bishop declared, “and digital merchandising is the key to winning.”
Blended retailing is the key, Bishop said, as it opens up more opportunities for shoppers to buy, both in the brick-and-mortar and virtual worlds, and it will require a more effective collaboration between retailers and suppliers.
Bishop outlined a six-point strategy for retailers to successfully harness digital:
- Virtualize the category.
- Focus on the loyalty of core customers (Bishop singled out Kroger and Target as tops in this area).
- Take targeted promotions to the next level with more effective messages.
- Simplify the buying experience by following the customer’s lead and focusing on replenishment for ongoing purchase.
- Adopt an intense need-state focus to broaden selling opportunities.
- Transition digital offerings from “add-ons” to integral parts of the operation.
Data Over Instinct
While larger retailers like those Bishop mentioned have led the industry in digital and shopper insight initiatives, smaller regional players are ramping up their efforts as well, lest they be left behind in the competitive breeze.
Case in point: Mid-Atlantic regional grocery chain Weis Markets, whose Ed Sheedy – on the job seven months now as the Sunbury, Pa.-based retailer’s director of category analysis and retail strategies, hosted a breakout session on “eliminating the chaos” in category management.
Retailers must take great care in defining categories to their best advantage, taking into consideration the needs of their core shoppers, Sheedy stressed. Certain products – like vegetables, pizza, cheese and beverages – can be found in various areas of the store and can’t be pigeonholed, or retailers risk alienating shoppers with specific needs.
“Keep in mind the shopper – they should be the drivers of the process,” Sheedy advised.
Merchandisers need to move away from mere shopper marketing, which he described as a promotional tactic, and focus almost exclusively on shopper behavior. Further, retailers and their vendors need to be mutually aligned for maximum benefit.
Trading partners need to answer questions like:
- What is happening, and why?
- What questions need to be answered?
- What data sets are most relevant?
“Some of these questions, we need to lean on our vendor partners to help answer,” Sheedy said.
He further advised the used of category scorecards on at least a quarterly basis, “so you can see how you’re doing and course-correct.” Category management is “live and breathing,” he asserted, and decisions must be made based on data, not instinct.
Other breakout sessions included Nielsen’s new Assortment and Space Optimization (ASO) solution for CPG, an integrated, end-to-end solution for assortment and space planning and execution, which the Schaumburg, Ill.-based company demonstrated in the conference’s Solutions Hall.
The cloud-based application incorporates real-time data with space-aware analytics and informs planograms that ensure each product within a category is allocated the optimal space needed to maximize its performance within physical and supply chain constraints.
Stuart Taylor, Nielsen’s SVP of global project leadership, said the the ASO solution addresses two key flaws of category management initiatives: insufficient methods for solving problems (e.g., better inventory models for making shelves more efficient) and disjointed processes, which must address assortment and space in tandem.
Back in Solutions Hall, attendees took part in vendor demos in five 15-minute sessions that ranged from Nielsen’s assortment suite, to SPI’s cloud-based services, to in-store behavior analytics by VideoMining, to behavior and consumption intel collected firsthand by SmartRevenue. In all, the room was a virtual tech candy store of possibilities for retailers looking to sweeten the pot with a new generation of consumers.
Rounding out day one of the conference was the opening keynoter, entrepreneur Daymond John, founder of the FUBU clothing line and one of the stars of ABC-TV’s “Shark Tank.” John stressed fundamentals for success such as setting goals, doing your homework about your consumers, and maintaining passion for your work.
Follow live event coverage at progressivegrocer.com and on Twitter at @pgrocer and @jimdudlicek.