Category Management is Evolving. Here’s What You Need to Know.

• The Hershey Company invited industry insiders to discuss category management's changing role in the webinar, "Voice of the Industry: The Evolution of Category Management."
• As shopper behavior changes, retailers and manufacturers must work together to understand consumers, meet their expectations, offer consistency across digital and physical stores and drive growth. 
• As category management evolves to become more holistic, retailers, manufacturers and consumers are all positioned to benefit. 

Category management is changing, and if retailers and manufacturers aren’t evolving with it, they risk being left behind.

Hershey recently produced a webinar, called “Voice of the Industry: The Evolution of Category Management,” which brought together insiders to discuss the evolution of category management. During the presentation, Mike McMahon, president of Category Management Association; David Nolen, vice president of category management for The Hershey Co.; and Jonathan Young, executive vice president of Kantar Consulting, highlighted trends and new dynamics in the complex retail landscape.

The nature of shopping is changing in our omnichannel world and the behavior of shoppers is evolving with this change. As new variables arise, there’s a growing need for retailers and manufacturers to work collaboratively; an imperative to put the customer at the center of the equation; and a necessity to focus on both physical and digital models to meet shoppers’ expectations.

To understand the evolving role of category managers, here are four takeaways from the recent Voice of the Industry discussion.   

As much as ever, retailers and manufacturers must work together

When that happens, they can share insights, strategies and unlock growth potential. “Retailers of all sizes continue to look for manufacturing partners who, among other things, bring new ideas and innovation to drive growth; provide insights on current shopper needs, habits and trends; and translate insights into action and proactively deliver recommendations,” said McMahon.

Nolen shared an example of how Hershey recently worked with a convenience store chain. He says that his team was able to leverage machine learning to understand how different stores operate depending on their location. For example, how does a store near a highway differ from one that’s close to a college or a gym? The analysis helped the team suggest different merchandising opportunities and assortment recommendations for each store. “We’re recommending what they should do. We don’t own the category manager process, they do. So we’re providing all these great insights in partnering with our retailers,” says Nolen. 

The shopper is at the center of everything

Retail and category management may be evolving, and shopper expectations are changing, but one thing is still certain: the importance of the shopper during every step of the path to purchase. “There isn’t anybody out there who doesn’t want to put the shopper at the center of all decision making. Getting that right helps everybody,” says McMahon.

Young adds: “Many shoppers are cross-shopping all environments. The way we’re planning the process needs to reflect each of these individual fulfillment models, but also needs to bring them together to think about the total ecosystem for the retailer.”

Click and collect and home delivery are growing

Those expanding avenues present an opportunity for retailers and manufacturers to consider new ways to build baskets. In click and collect, we see consumers reordering items that they had previously purchased. There's a need and an opportunity to use promotion to get into the basket for the first time, and maintain a presence there for future orders. “That’s something that’s unique to that fulfillment model and that type of thinking needs to be applied across the retailer ecosystem," explains Young. 

To compete, retailers must seamlessly integrate digital and physical commerce

There is no longer a divide between a physical store and its online presence. Nolen pointed out that almost two-thirds of food shoppers cross-shop between brick and mortar stores and online; one in three in-store purchases start online and one in four online purchases starts in a store. Because of that, retailers must offer consistency between their online and in-store offerings, says Nolen. “The shopper expects the same experience,” he says. “How do you take that in-store planogram and bring it to life in the digital world?”

Nolen, who refers to today’s category management as “retail shopper management,” compares the role of the category manager to a Swiss army knife, which has tools within tools at the ready to help retailers in any situation drive growth and profitability.

“This is a great time to be in category management, with all these trends,” says Nolen. “I think the thing we value the most is our partnerships with retailers and driving that mutual growth. There’s nothing better than when you work together on an initiative and see it execute at the store or online or as total commerce, and drive growth for everyone.”

As category management evolves into a more holistic, total-commerce role, everybody stands to win.