Category Management

Category Management is a business approach which puts the shoppers in the

centre of interest.

Definition of Category Category Definition

Management

Category Management is
A category is a distinct
an on-going retailer -
manageable group of
supplier process of
products/services that
managing categories as
shoppers perceive to
Strategic Business Units,
be interrelated and/or
producing enhanced
substitutable in meeting
business results by
their specific needs.
focusing on delivering
superior shopper Value
What Does Category
Management Cover?
To deliver superior shopper value, Category Management covers the
demand side as well as the supply side
Efficient Customer Response

Supply
Side Shopping
Efficiency increase
Basket
Customer Economic Model in Action

Category
Management
Demand
Frequency X
XCategory
Side Category Growth Category Basket
Penetration Size Value
Loyalty
Profit
8 Golden Rules of
Working Together
To facilitate the Category Management project work, there are eight
‘Golden Rules’ that must be followed

1 5
The shoppers is our common focus Use the expertise for Category
Management

2 6
Mutually agreed objectives and Information sharing is essential
targets
8 'Golden
3 Rules' of 7
The shopper and Customer working Multi-functional access and
must win (triple win) together communication of relevant data

4 8
Relationship and trust are earned Openness to change traditional
attitudes and relationships
 Epos
data management, ANALYSIS TEMPLATE
and CATEGORY REVIEW
DATA MANAGEMENT
a process of collecting, organizing, storing, and analyzing data with the
purpose of delivering intelligence to the business.
Raw Data

Data Formatting/
consolidating
WORK REQUIRED ON EPOS DATA
Processed Data Data Tagging /
1. Consolidating / formatting Hierarchy
2. Data Tagging of category hierarchy Ready for Analysis
1. SubCat, (Shamp, Cond, Treat, Style)
2. Segment (Beauty, Anti D, Saloon)
3. Format (Spray, Gel, Mousse)
= • Market share
Analysis / Review

4. Brand (Sunsilk, Dove, Clear) • Analysis Template Recommendation

5. Promo / Non-Promo - trending, growth, / Action
- size, etc -Assortment
• SKU Ranking -Share of shelf
-Promotions
4
-Profitability
-Merchandising
Store layout
 RANGE REVIEW /
Efficient Assortment Process
Assess Validate vs
Finalize
Current Market /
Assortment Implement
Competitor
Assortment Plan

- SKU - Determine - Finalize - Implement

movement / market assortment assortment
sales coverage plan either plan
contribution by store or together
- Check
/ profit cluster with other
segment
contribution tactics
trends
- Pareto - Determine
80/20 competitor
assortment
coverage

Assortment - a group of various things

 Assess Current Assortment
Step 1 : Analyze SKU movement over a period.
Step 2 : Sort range according to :
- volume movement
- value contribution
- margin contribution
Step 3 : Identify the 80/20 SKUs, Determine the Performance
Index / Assign Assortment
Step 4 : Identify opportunities to reduce or
increase assortment by establishing Delisting
Parameters

Assess Validate vs Finalize

Current Market / Assort- Implement
Assortment Competitor ment Plan
Checklist for
Determining Assortment
 Basis for Assignment of Weights:
 Usership Level
 Retail Price / Value
 Target Shopper

 Delisting Parameters:
 Number of SKUs
 Shelf Space Availability
 Brand Loyalty/Affinity

 Other factors considered:

 Store Location
 Store Size
 Store Positioning
 Planogram
a diagram or model that indicates the placement of
retail products on shelves in order to maximize sales.

EPOS Based Planogram

• Agreed on Assortment based

on performance

• Aligned Segmentation

• Placement

• SOS = Item Performance

• Marketing and Merchandising • Right product

Strategy
• Right number of facings

• in the Right position

11
CATEGORY MANAGEMENT STEPS

Agree on the next steps and road map

1 Start a Category Management Project

2 Store(s) selection
3 Sharing EPOS Data
4 Data analysis - Range analysis
5 First cut proposals on data analysis
6 Rework based on feedbacks
7 Agreeing on final assortment
8 Agreeing fixture and shelf placement
9 Draft planogram
10 Revisions
11 Agreeing on final planogram
12 Development of supporting visual material
13 Field implementation
14 Roll-out and implement in the agreed stores