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The Evolution of Category Management


Evolución de la Gerencia de Categoría

The increase in collaboration between manufacturers and retailers, along with the application of machine learning and artificial intelligence, has made a difference in the commercial results of some brands and store networks in recent years, demonstrating the need for Category Management to undergo an evolution.


Collaboration is essential for the success of Category Management since it provides a better understanding of market trends, consumer behavior, and growth opportunities. Retailers and suppliers can share valuable information about market demand, product availability, and shopper preferences by working more closely together, allowing them to formulate better strategies and initiatives.


Achieved benefits

It has resulted in tangible benefits, including improved supply chain efficiency, greater visibility, and data analysis, more effective introduction of new product lines and categories, space optimization, and private brand development (especially for retailers).


However, fundamental aspects such as personalization and segmentation, customer loyalty, improvements to the shopping experience, and omnichannel have made little or no progress depending on the market, sector, or channel.

The competitive advantage

But it is precisely these last aspects, where a small group of manufacturers and retailers begin to separate themselves in an important way from the rest of their competitors. Focusing fundamentally on the Shopper as opposed to an excessive focus on efficiency begins to generate critical competitive advantages.


What aspects should evolve first?

The speed of Category Management evolution depends on several factors, including technological advances, market trends, and changing consumer needs.


Below, we mention some of the critical aspects that we think must change first in companies:


  1. Artificial Intelligence and Advanced Personalization: Adopting technologies such as artificial intelligence and machine learning can provide a deeper and more accurate understanding of Shopper behavior. This allows for more advanced store segmentation and personalization in product offerings, promotions and shopping experiences, which in turn can drive customer loyalty and satisfaction.

  2. Omnichannel: Omnichannel is a reality in today's retail world. The seamless integration of different sales channels is essential to provide a coherent and satisfactory shopping experience for Shoppers. Category management must adapt to this reality and ensure that strategies and tactics are consistent across all customer touchpoints.

  3. Collaboration and Co-Creation: Involving Shoppers (until now it has only been done with consumers) in the product design and development process is an effective way to create a deeper connection with them. This can generate valuable insights to, for example, improve packaging, size, and label design that facilitate the selection of the ideal product at the point of sale that best satisfies the customer's needs and desires.

  4. Shopping Experience: Customer experience is a key factor in retail success. Focusing on improving the shopping experience, from in-store navigation, purchase sequence, and multi-sensory stimuli beyond the traditional poster, to the checkout process, can increase customer satisfaction and foster brand loyalty.

  5. Transversal Processes: The evolution of Category Management will require an open mentality towards the adoption of new practices, processes, and shared technologies between marketing and commercial teams. The ability to quickly adapt to emerging trends and changing Shopper preferences will be crucial to staying competitive in the market.


The Evolution of Category Management will continue to accelerate as companies adapt to the changing demands of Shoppers and take advantage of the opportunities provided by new technologies and approaches. Those organizations that are able to combine effective collaboration with advanced technologies and a focus on the shopper experience will be in a strong position to generate competitive advantages and long-term success.


If you are interested in learning more about how we can help you strengthen your category management model, do not hesitate to contact us.



 

Juan Manuel Domínguez, CEO TMC Consultores Comerciales




Written by Juan Manuel Domínguez R., CEO of TMC Commercial Consultants. For information about our consulting or training services in this area, write to us at contacto@tmcconsultores.com and we will contact you immediately.




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