The answer is ‘Category Management’. And before you roll your eyes and think Category Management is dead, it is not. Yes, when Category Management launched in the early 1990’s I remember my colleagues at Sainsbury’s Head Office writing ‘Category Management 2pm-4pm in their diary’. Move forward 30 years and that approach to Category Management is dead. Satisfying the consumer is not.
I have spent 25 years in Category Management. Been pitched to in over 2,000 supplier meetings. Consulted in Category Management and trained people in this skill too. In a 5-minute read below, I’d like to share why most opportunities presented by a supplier to a supermarket never make it into store. There are 7 reasons.
#1 I have no category target
If there are no category targets to achieve then category opportunities are not being assessed against what they will achieve for the category. You need a target for the category that every category opportunity can then be assessed against. There are only 3 targets for any category (Category jargon added to help, not to mesmerise). The 3 questions are; 1. Do you want to sell to new customers? (Penetration), 2. Do you want to get current customers to buy more often? (Frequency), And 3. Do you want to get current customers to buy more when they buy? (Trip spend). Then, make the category target S.M.A.R.T. and you are off at the races…
#2 I do not understand my customer
This is on trend at the moment. Understanding your shopper is about being able to convert data into opportunities that increase sales. It’s as simple and as hard as that. Data comes in quantitative (numbers) and qualitative (words). I have seen many suppliers with a ream of qualitative data. They walk me through the 128 slides and then very little happens. This is because they did not start with a hypothesis, i.e. If we find out that the shopper does x, we can do y, and that should increase sales by z. They start by asking lots of questions and getting lost in the answers. Fewer questions that are well thought through is the key. And let me expand your thinking further please…Here at MBM we refer to them as The Eater, The Preparer, and The Shopper. Not the consumer or customer.
#3 I do not understand my supermarket
How many of you have worked in a store recently, if at all, filling-up your products on the shelf? Often we can sit in our ‘Ivory towers’. As an old Senor Buyer once said to me, ‘It’s the last 100 feet that really matters. Everything else just works towards that’. Understanding the high level to the low level of your supermarket is important. And trying to get this information in the precious time you have with your Buyer just won’t happen, so you need other methods. Working in-store will help you to understand the challenges stores face. Doing it regularly will give you real insight. Attending conferences about your supermarket and reading the investor pages on the website will help too.
#4 I get lost in the data
There is no end of data for your category. Usually. Unfortunately this means that the potential to get lost in it, is huge. In many a supplier meeting they have little more than just copied the data across a million slides and then asked me what I thought. The learning is all about where you start. Start with a hypothesis of what you want to analyse. If you have noticed from the top line data that your product decreases share in supermarket ABC in August, then start with it, and investigate that hypothesis. Then another, then another. Don’t start with a huge spreadsheet and just drill down until you achieve analysis paralysis. Then, once you have a proven hypothesis, value it, and present the size of the prize, the supporting data, and how the opportunity is seized to the Buyer. A maximum of 7 slides.
#5 I cannot get my buyer to listen
Trust is the important element in a relationship. Especially with Category Managers because the Buyer wants to trust you to be independent. Or at least as independent as you can be! Some bright spark figured out that trust is a 4-part equation; Credibility + Intimacy + Reliability / Self Orientation. Worth searching and reading about the ‘trust equation’ because if your relationship needs work it will help to know which part to focus on. I’ll just share a view on credibility. You are credible if you have understood your category opportunity completely and can present it succinctly. Start by not using Powerpoint because you’ll get more engagement with one A3 page bringing the opportunity to life.
#6 I cannot get the products to work in-store
Waste was too high. Ignored by the shopper. The Buyer wants to pull the range after only 12 weeks. The most overlooked elements of why it failed are 3-fold; 1. The value for money was poor – Many years ago Sainsbury’s launched a self-cook range. Premium ingredients. Great concept. The portions were too small for the retail price being asked, 2. For one reason or another the shelves are empty – Many years ago Birds Eye found that the way to solve their poor in-store availability was to provide more gloves because the colleagues’ hands were just getting too cold, and 3. The shopper wanted you to solve an original problem, that after being designed, developed, and a million people fiddling with it, lost what it was trying to originally achieve.
#7 I have no idea what lessons we have learnt
Continuous improvement is a key skill missing from many companies. How could we have done that better? What have we learnt for next time? What is our landing rate? The vital piece that is missing for all Category Managers is their landing rate. Salespeople are wax lyrical about their £3m of sales, or 45 cars sold every week, or that they could ‘sell sand to the Arabs. Category Managers – What do they shout about? Imagine an interview with a large supplier. ‘So your landing rate is twice the industry average. That’s impressive’. The average landing rate for a Category Manager to get an opportunity into a supermarket is only 27%. Imagine if you tracked your landing rate and it was double. Might the world be your oyster?
Want to be a great Category Manager? Buy our Category Management e learning training product for £249 here: https://www.makingbusinessmatter.co.uk/product/e-learning-cat-man/
Learn your craft by reading the Ultimate Guide to Category Management here: https://www.makingbusinessmatter.co.uk/category-management-ultimate-guide/