The final phase of the the category management plan is creating the Tactical plan and implementation schedule. Following the last phase of outlining the strategy and the category scorecard based on the category assessment, it is critical to wrap up the CatMan 2.0 process by detailing the tactics by which the strategy is to be achieved, and to schedule the timeline. Tactical Definition and Purpose Category management involves 5 types of tactics, which are the 5 kinds of actions one may take to realize a strategic objective and build business. Those 5 tactics are: Assortment - change SKUs in the current array Pricing - change the price of an item or segment Merchandising - change how or where the items are presented to shoppers Promotion - change the type, size or frequency of incentives offered to shoppers Service - change the level or method of personal service to shoppers for certain categories (e.g. service deli) Tactics are created to deliver strategies. Therefore, we have selected specific tactics to meet each strategy.
After completing the Assessment "what" and Assessment "why" phases of the CatMan 2.0 process, it can be tempting to jump straight into the tactics and implementation of all of the existing things you've learned. However, it is critical that category managers take their time at this stage, to document the Strategies and Scorecard that reflect the go-forward strategy for the category. The tactics and implementation of category management review findings can be far reaching and involve resources from across the company. Therefore, it is fundamental that the Category Strategy and Scorecard be completed as a quick resource to ensure alignment across implementation and over time. What should a Category Scorecard DO? Monitor progress to ensure that you’re going to accomplish the strategic objectives in the category plan Include regular reviews of the business that includes key performance indicators (KPIs) Measure how your organization is doing against pre-defined goals or targets What Category Scorecard should NOT DO? Your category scorecard is NOT the same as corporate monthly reports that measure overall business results. Below, we'll summarize the category review with an example Category Strategy & Scorecard for Jones Grocery's ice cream category.
Following the Assessment "what" phase of the CatMan 2.0 process is assessment "why." In the previous phase, we identified 5 findings that will go on to inform the Ice Cream category scorecard for Jones Grocery. The assessment "why" phase of the process is a recent addition to the CatMan 2.0 process, which captures the need to include the perceptual and attitudinal analysis to the category. In essence, the assessment "why" phase of the category management process should answer the question, "Why is the category bought?"
Assessment WHAT Perspectives Once the Category Role has been defined and the retailer and category management partners are aligned the next phase is the assessment phase. Generally, the assessment phase is broken in to the assessment "what" and assessment "why" phases. This stage is where the CatMan 2.0 process differs significantly from CatMan 1.0. In the latter, the assessment phase was largely limited to "shopper facts", a behavioral assessment of who, what, when, where, and how is the category bought? In CatMan 2.0, the assessment phase leans much more towards "shopper insights" and includes attitudinal & perceptional assessment - effectively answering the question "why" the category is bought.
Retail Health & Wellness @Label Insight It's that time of the year again where research groups race to get out their 2019 predictions. It seems the reports keep getting earlier and earlier, in line with the holiday music and decorations. This year there are some notable trends that are worth exploring, among them the fact that cannabis is now being considered as a next frontier of health and wellness ingredient - from illegal drug to health product? Wow, things are changing quickly. There continues to be a lot of movement in the health and wellness market. Most notable are the huge investments Albertsons has been making to take on health and wellness such as the Rite Aid merger which they believe will position them as one of the leaders in Health, Food, and Wellness. Lastly, health and wellness continues to make headlines in the store, particularly when tied to technology implementations such as the Kroger app. To get the latest curated news on retailer health & wellness for November read on and enjoy.
Attribute-Driven Category Role In the last phase of the process we aimed to set the Category Definition and Segmentation. We deployed tools such as Markov Chain Analysis, and clustering to help us to better understand the products in the category as well as how customers make decisions about products. All of which lead to a surprisingly innovative looking attribute-driven Category Decision Tree which almost resembled a traditional decision tree – inverted. In this phase, we build off this last work to place the category in context of the wider store strategy. We now need to determine what role the ice cream category will play for Jones Grocery, and as a result, how we interpret and implement what we have learned so far will be driven by this wider context, and the associated resources and priority that will be given to the ice cream category. Most importantly, this phase is about understanding how important the ice cream category is to Jones Grocery and how important it is to their shoppers.
A lot of interesting news coming out in November around E-commerce and Omnichannel. We've worked to curate and summarize the following important news events to help you to keep on top of what's going on in this space. Market dynamics: The market continues to evolve with growth in e-commerce being represented across the market in actual results as well as continued investment in e-commerce and omnichannel infrastructure. Retaildive.com: Walmart e-commerce sales soar 43% Walmart released their Q3 results with impressive growth across the board, but of particular interest for us is the considerable growth in e-commerce. "Q3's impressive performance continues to validate Walmart's long-term investment strategy, with solid revenue and operating margin growth, as well as online sales growth of 43% continuing to exceed the company's stated goal for 2018," Progressivegrocer.com: Grocerys directive - onmichannel or bust Coming out of the hugely successful Grocerhop event, this post highlights some of the key takeaways. Understanding your market is key to creating an experience that draws people to your stores. “Grocery has a built-in opportunity to be multi-sensory,” said Vicki Eikelberger, SVP and managing director of multidimensional brand experience firm Big Red Rooster. To create a rich shopper experience, Chicago-area grocery chain Mariano’s Fresh Market, part of The Kroger Co.’s Roundy’s subsidiary, hires its associated from foodservice, hospitality, healthcare and academia, explained Don Fitzgerald, the retailer’s group VP of merchandising and marketing. Supermarketnews.com: Retailer jostle to lead online grocery Amazon’s pricing edge in online grocery is narrowing as Walmart and subsidiary Jet.com have closed the gap. E-commerce analyst Profitero, in its latest “Price Wars” report, found Jet.com and Walmart the lowest in price relative to Amazon in online grocery. The study had Jet at a price index of just 0.6% higher than Amazon, while Walmart was 2.5% higher. International: Increasingly we're seeing implementations internationally leading the way in regards to the future of e-commerce and omnichannel. The article below is a great deep dive in to some of the exciting things going on in China. Definitely worth keeping an eye on these developments as a way to look at the future of e-commerce from a completely different perspective. Forbes.com: The future of e-commerce and retail will be written in china Alibaba’s high-tech food/grocery retail store concept, known as Hema, is expanding quickly. These outlets serve as walk-in restaurants, food and grocery purchase points, and warehouses for online delivery (within 30 minutes in a three-kilometer radius) – all at the same time. There are now 64 Hema stores in operation, with two being added each week. Already, Hema stores in operation for over 18 months are reporting revenues of RMB50k per square meter, up to five times what traditional offline stores can generate. Sixty percent of Hema’s sales are through the online delivery channel, making the stores far more productive, for far more hours of the day, than pure offline stores. User Experience: We have made the argument several times that we believe that the future of e-commerce and omnichannel will depend on the evolution of the user experience (UX). In November 2018 there was a lot of news related to UX evolution. Winsightgrocerybusiness.com: Target bests Walmart and Kroger in seamless shopping experience study In an evaluation of how well three leading national retailers deliver a seamless grocery shopping experience, Barrington, Ill.-based Brick Meets Click found Target beating out both Walmart’s and Kroger’s respective omnichannel platforms. Supplychainbrain.com: Amazon's latest crusade in the grocery delivery wars - thanksgiving dinner Online sales of food, beverages, soap, shampoo, pet food and other items routinely sold in supermarkets will reach $177bn in 2022, doubling this year’s $88bn, according to Cowen & Co. That will make online grocery a bigger market than electronics and toys combined. Progressivegrocer.com: Kroger launches voice assistant ordering grocery e-commerce The Kroger Co. is furthering its efforts in contextual commerce by adopting voice-assistant technology for ordering groceries online. Customers can interact with their Kroger Grocery Pickup cart via an action in the Google Assistant voice app – which can be accessed through iOS, Android and Google Assistant devices, Kroger Technology announced on its LinkedIn page.Activating the service is as simple as saying "Hey, Google" into the device. Supermarketnews.com: Customers were top of mind in Raley's redesigned website Raley’s has revamped its website with a new look and more personalization to provide an enhanced customer experience. “We understand that customers’ needs are changing whether shopping online or in-store,” Mike Molitor, vice president of e-commerce and loyalty at Raley’s, said in a statement. “Our goal is to make it easier and more compelling for customers to interact with online shopping and our savings program, Something Extra.” Automated Fulfillment - Robots and Automation: A hot topic at the moment are the movements around automated fulfillment as a way to solve logistics challenges and essentially viability of investments in e-commerce. Designnews.com: Next year let robots do your thanksgiving shopping Takeoff is partnering with a number of supermarkets to launch the robotic picking of groceries. Albertsons is in the pilot phase of the micro-fulfillment center concept using Takeoff’s artificial intelligence capabilities to pick and pack groceries with an automated system. The pilot makes Albertsons the first national grocer to implement an automated eCommerce fulfillment solution. Albertsons expects to begin testing the robots with customers in 2019. DCvelocity.com: Kroger picks cincinnati for first grovery e-commerce Grocery shoppers in Cincinnati will soon be able to order their fruits and veggies online, thanks to a highly automated warehouse planned by supermarket chain the Kroger Co. and its automation partner, Ocado Group plc, the firms said today.Cincinnati-based Kroger announced last month that it had agreed to order three of those customer fulfillment centers (CFCs) by the end of 2018 and a total of 20 CFCs over the first three years of the partnership. Opinion: Forbes.com: Needing to touch and feel groceries is like believing the earth is flat "A note of caution for those who attribute our low online grocery figures to consumers’ desire to touch and feel products before buying. That argument has been made by skeptics many times before – think clothing, footwear, beauty or mattresses. E-commerce, however, grows quickly as the breadth and simplicity of offerings rises. When digital ordering, pickup and delivery become easy and affordable, consumers migrate to these options. Convenience is an incredibly powerful motivator, no matter what the category." Zia Daniell Wigder, Groceryshop 2018 __________________________________________________________________________________________________________________ Want to keep on top of news and views from around the industry and the latest developments in attribute driven e-commerce & Omnichannel experiences? Subscribe
Attribute-Driven Category Definition After internal alignment has been reached (step 1 of the CatMan 2.0 process), covered in detail in this post here, it is time to define the category. This step was previously step one in the CatMan 1.0 process and can be considered a critical part of the process. It is in this stage where the category management team will take a look at organizing and defining the types of products that are to be considered in the category, and what sub categories of products it will include. Initially this sounds like a fairly standard step, but in fact, there are critical tools such as Markov Chain Analysis, Clustering and the Category Decision Tree (CDT), that are utilized that will have fundamental implications on the entire category management plan and in particular the category definition. It is therefore very important to evaluate these tools to understand how they may benefit from high-order attribute data and an attribute-driven approach.
As we work our way into the final quarter of 2019 we are excited to look back at some of the progress we made and to celebrate some of the content we launched to support the community. This post covers some of the highlights. Groceryshop: Label Insight was thrilled to sponsor the first-annual Groceryshop conference in Las Vegas, which was hosted by the same folks as Shoptalk. We mingled with CPG (consumer packaged goods), retail, and technology's biggest players, including Kraft Heinz, Coca-Cola, Albertsons, Publix, and Google. You can get a more in-depth post about our learnings here, or peek at our social media accounts (@labelinsight on Twitter and Instagram) for real-time updates from last week. CatMan + Transparency White Paper: Early in the month we launched our CatMan + Transparency white paper to an amazing reception. It was launched right on the heals of the FMI & Label Insight Transparency Imperative 2018 report and so we weren't sure we'd get as much traction. But it has been by far the most successfully received whitepaper we have produced to date.