What is category management?
Category management is the process of managing similar groups of products in a retail environment. It’s a combination of forecasting, supply management and procurement. In essence, it’s about the efficient use of limited resources to maximise sales and minimise costs.
What are the benefits of getting category management right?
By accurately predicting and adapting to future changes in consumer needs, category management can help you increase sales and gain customers from your competition. It can also help you negotiate better deals with your suppliers or retailers as you’re more certain of demand and can therefore buy more product, driving the price down accordingly.
How do you do that?
To excel at category management, you need to analyze large amounts of data to discern the patterns and trends. You need to consider your product range, new products, shelf space and layout, price and promotion while ensuring the right visibility and display, generally at per retail store level. More broadly speaking, you need to efficiently manage your supply chain, ensure alignment with business plans and be able to negotiate effectively.
Most importantly, you need to be quick. There’s a reason they’re called fast-moving consumer goods. The market moves fast and you have to find a way to keep up. The entire category management process can take up to six months in the US, which is why it’s known as the "dreaded relay process". Good category management is about offering the right choice and availability of products by analyzing retail data, rules, constraints and market insights into smart forecasts to eliminate out-of-stock situations and ensure customer satisfaction. To nail category management, you need a solution capable of evaluating and generating superior recommendations within minutes, not months.
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AI-powered assortment-space optimization for product store categories and category managers