WILTON, Conn. — As more consumers incorporate social media sites and other online shop-assist tools into their daily shopping routines, the concepts defining traditional category management — category schematics and optimized facings and assortments, for example — are fast becoming obsolete.
Replacing them is the concept of category leadership, as Kantar Retail reported in its recently released “2011 Category Leadership Benchmarking Study.” What is the difference between management and leadership? Management is about planning, organizing and coordinating; leadership is about inspiring and motivating, connecting the dots between consumer wants and needs, and examining actual shopping behavior.
According to the report, retailers are most concerned today about what Kantar defined as the “path to purchase” — the decision matrix that Internet-savvy consumers use to choose what products to purchase in which venues, as well as what impulse offers would prove to be most appealing alongside that traffic-driving SKU.
“To really try to set the tone as to why those [category management] tactics matter, [that] requires leadership,” Grace Park, managing director at Kantar Retail, told DSN. “Not only for the category but really for the department or even the total store. What retailers are struggling with today is trying to find a true growth solution.”
“The leaders are really connecting the consumer’s usage occasions to the purchase occasions,” noted Ginny Valkenburgh, SVP at Kantar Retail. Spice maker McCormick provides a good example of that, Valkenburgh said. “They set their shelves to different usage occasions and call those [occasions] out,” she said, such as with the brand’s Grill Mates during the summer.
Kantar analysts advised retailers and their supplier partners to fold category management, shopper insights and shopper marketing all under one umbrella. Tomorrow’s success stories will be a factor of applied shopper insights and store-level execution. Integrating these two key areas will help drive total category leadership, the report suggested.
Creating a call to action out of shopper insights also will help foster success, according to the report. “CVS and Kroger have worked to mine their frequent shopper card data to better understand how consumers shop in their stores and how to capture a greater share of wallet,” the report said.
Other examples of best-in-practice retailers include Target, H-E-B and Walgreens — all of whom have engaged their manufacturer partners in identifying the most valuable customers and catering to their needs through specialized programs, item assortment shelving and pricing.
Retailer-specific customizable programs and promotions are expected to be key growth drivers going forward, with 80% or more of both retailers and suppliers expecting suppliers to customize their programs for retailers five years from now. Those customizable programs might even be different across a chain, as more retailers view the utilization of multiple segmentation schemes (e.g., urban centers, food deserts) as an area most likely to be a main focus five years from now.
For the full report, click here.