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If you are a large multinational CPG company, you probably have a large category management team with lots of resources. But what if you are a smaller company, maybe regional, or just starting out building your presence and distribution? There are likely several obstacles that may be preventing you from leveraging the power of category management and the value it could bring to your business. In this post, we’ll look at some potential roadblocks and give you solutions to overcome those so that you can start generating significant value from category management.
Prioritize: This sounds easy, but too many times, everything is a priority. You must really do some analysis and self-reflection to identify the product categories that generate the highest revenue or have the most potential for growth. Allocate resources, such as budget and manpower, to these priority categories to maximize impact.
Resource Sharing: Collaborate with other departments or functions within the company to pool resources and expertise. Cross-functional teams can work together to implement category management strategies. This can be very powerful but requires substantial coordination and a leader with a vision to bring everything together.
Outsourcing: Consider outsourcing certain aspects of category management, such as data analysis or market research, to external specialists or agencies. This can provide expertise without the need for significant in-house resources.
Start Small: Begin by collecting basic data, such as sales figures and customer feedback, even if it's initially limited. There is a ton of “free” data out there for those who have the desire to mine it. As the business grows, invest in more advanced analytics tools and data sources.
Free or Low-Cost Tools: Explore free or affordable data analytics tools available in the market. Many software solutions offer basic analytics capabilities that can be valuable for smaller businesses.
Check out some of these low-cost tools that can help you get started: Metabase (visualization software) and Microsoft’s Azure Cloud (Postgres database)
Supplier Collaboration: Collaborate with suppliers to access data related to product performance and consumer trends. Suppliers often have insights into broader market trends that can benefit both parties.
Direct Customer Interaction: Engage directly with customers through surveys, feedback forms, or social media. Gather insights into their preferences, pain points, and shopping behaviors to inform category management decisions.
Competitor Analysis: Conduct thorough research on competitors' product offerings, pricing strategies, and promotional activities. Read their reviews, check out their website and social media accounts. This can provide valuable insights into market trends and consumer expectations.
Local Partnerships: Form partnerships with local organizations, such as business associations or chambers of commerce, to access market research resources and insights.
Training and Development: Invest in training programs for existing employees to build category management expertise. Provide opportunities for skill development in areas such as data analysis, merchandising, and customer engagement.
Consultancy or Outsourcing: Engage external consultants or agencies with category management expertise. They can provide guidance, conduct assessments, and help implement best practices.
Networking: Encourage employees to attend industry conferences, workshops, and seminars to learn from experts and connect with peers in the field of category management.
Change Management Plan: Develop a clear change management plan that outlines the benefits of category management and addresses potential concerns. Communicate the plan effectively to employees and stakeholders.
Engage Employees: Involve employees in the decision-making process and encourage their input. When employees feel valued and included, they are more likely to embrace changes.
Demonstrate Success: Start with small-scale pilot projects to demonstrate the positive impact of category management. Use tangible results to build support and enthusiasm within the organization.
Step-by-Step Approach: Break down category management into manageable steps or phases. Begin with basic practices and gradually introduce more advanced strategies as the business becomes comfortable.
Educational Resources: Provide employees with access to educational resources, such as online courses, webinars, and industry publications, to enhance their understanding of category management principles.
Here are a couple of places to start:
Category Management Association & Shopper Insights Management Association (CMA & SIMA)
Category Management Knowledge Group (CMKG)
Tell the merchant/buyer your plan: If you are serious about making category management a part of your everyday business, possibly utilizing some of the ideas outlined here, tell her your plan and your path to get there. She may not immediately respond, but a consistent message and more importantly a consistent presentation of findings will eventually pay off.
Joint Planning: You may not be there today and the merchant team may not respond positively, but you can never get what you don’t ask for.
Automation: Implement automated systems for routine tasks such as inventory management, order processing, and data analysis. This frees up time for strategic decision-making and category management efforts.
Delegation: Delegate specific responsibilities related to category management to capable team members. Empower them to take ownership and drive the implementation process.
These are just a few potential roadblocks to embracing category management. Inevitably, there may be more unique ones to you or your business, but regardless, there is nothing that should stand in your way of taking advantage of the power and growth potential category management enables. It never hurts to get coaching when you don't know where to go next. Never let finances or any obstacle limit your opportunity and potential for success at retail! And of course, reach out to the High Impact team for any needs or problems that you may have regarding your category management. We can't wait to serve you!
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