What is category management in retail?

Have you heard the phrase ‘category management’ but not got a clue what it means? In its simplest form, product category management in retail is about grouping products together or segmenting them. This is done to maximise each category to its full potential.

As a retailer, why would you organise products into groups?

Retailers use category management to maximise product placement.

If you’re a retailer, category management means that you will understand everything there is to know about a certain set of products.

And you can use this information across your business and departments to:

  • strengthen your negotiations with suppliers,
  • understand how much of a product you should stock,
  • the layout and positioning of stock in store,
  • set pricing for products.

As a supplier, why would you need category management?

If you’re a manufacturer or a supplier category management in retail not only helps you to understand everything that is going on in your sector, it also:

  • strengthens your relationships with retailers as you are offering them valuable information,
  • gives your sales teams additional information to help them sell your products, and
  • helps you to understand your competitors’ products.

What information is included in category management?

How customers shop a category is key information in category management

There is a lot of information you can gather for category management in retail, and all of it is useful across the business. Here are some examples:

  • Information about the sector, such as sales data and store numbers.
  • Shopper behaviour, understanding why customers buy a particular product
  • Market and consumer trends, such as:
    • seeing whether a category or even sub category is in growth,
    • share of product type,
    • a particular retailer’s share of the market, which retailer is performing best, which is worst?
    • opportunities and challenges for the category,
    • consumer usage and behaviours, consumer profile including demographics,
    • decision trees and why a purchase is made,
    • key trends in the category
    • key trends in the wider environment
    • promotions and pricing
  • store planograms

Category management in retail is forever changing

You can use category management information throughout the year.

Understanding a category isn’t one-off information either. It’s a continual project, as you’ll need to update information when there are:

  • seasonal changes
  • new range launches
  • new product launches

As a supplier you can use this to develop new products or to suggest new products which may fill a gap for a retailer. As a retailer, this information arms you against your competitors and enables you to promote what makes your offering unique.

Category management and marketing

These two go hand in hand. The more information you have about your category, the better and clearer your marketing messages are going to be. Which will lead you to build the information into your marketing strategy, and implement marketing tactics will help you to achieve your goals too.

Ready for some help with it?

If you know you need to know more about your market or category, but want some help to pull the information together, then get in touch about my category management service.

And if you’d like tips around marketing and retail in your inbox, then subscribe to my newsletter.

Author

  • Gill

    Gill Bishop is a marketing strategist who, for over 20 years, has worked in small businesses in a variety of sectors. She’s passionate about helping business owners get organised, so that they can be visible in the right place, enabling them to build relationships with their clients and customers. What this means is that the marketing they do is less overwhelming, worthwhile, and gets results.

    View all posts

How visible is your marketing?

Is your target audience seeing your marketing?

Take my quiz to find out: