20th August, 2018
Why do so many Category visions fail to stick?
(We're going to be discussing how Category Management needs to evolve at our forthcoming forum for business leaders in Amsterdam on 27th September "Business Not As Usual" https://bnau2018.oxfordsm.com)
What do Category Management, the World Wide Web and Taylor Swift have in common?
They’ll all turn 30 next year.
That’s right: Category Management is a bona fide veteran of the CPG world. So surely most businesses know exactly which category drivers are the most important to their own growth strategy, right?
We regularly hear clients telling us ‘Our category vision hasn’t gained traction’, ‘Category? That’s range and merchandising, right?’ or ‘I just don’t quite understand what ‘category’ actually is…’.
So what’s going on?
A Category Evolution
To be fair, you can’t say Category hasn’t done its best to stay ahead of the game during its 3 decades.
The eight-step Category Management approach that was born back in 1989 was crucial in bringing a category and shopper mindset into CPG companies across the globe. Roll into the noughties and the availability of shopper data led to a Category Development approach, with suppliers and retailers working together to develop joint category growth initiatives.
With an increasingly complex retail and shopper landscape, more advanced suppliers are now adopting a Category Leadership mindset. This brings together shopper and customer insight throughout the planning process to create plans that deliver a 4-way win for the retailer, the shopper (or patient), the consumer – and themselves.
But the failure of many of these companies to drive brand growth alongside category growth, or to deliver a tangible change at the point of purchase has led many to question the value of category resource. Google ‘death of category management’ and you’ll get plenty of hits.
The problem with Category Visions
Too often, Category Visions become over-complex, intellectualised exercises. They don’t survive beyond the function that created them, and they’re nowhere near being the sales and marketing 'adhesive' they were intended to be. We see examples of category strategies being at odds to commercial strategies, with no formal alignment into internal processes, creating unnecessary internal tension.
The value impact of category drivers ends with the ‘big number in the launch presentation’, and is rarely tracked. Selling stories are still retrospectively forced to ‘find’ a category angle. The traditional and much coveted role of Category Captain has been abandoned by many retailers, fearing getting ‘too close’ to one supplier, and preferring to gain multiple views from a number of different suppliers. Well, wouldn’t you?
Category that’s fit for the future, now
The fact is, the world has changed – and continues to change rapidly. Shoppers are savvier than ever before. Channels are more complex than ever before. We have access to more data than ever before. And yet fundamentally, needs are the same as they were back in 1989.
Suppliers want to grow, retailers want to grow, and shoppers want to find the right product solution, easily accessible when they need it – they’re just a bit more vocal about it than they used to be.
At OxfordSM we believe that Category is as relevant and crucial as it was 30 years ago – but it must evolve to be 'fit for the future'.
Our approach to Category Growth Strategy is based on 4 key principles:
- We focus on tangible growth opportunities & solutions across the value chain. To grow brands and categories sustainably, we need to create opportunities that drive the bottom line along with the top line. That’s why we consider commercial and operational opportunities alongside those that drive demand, creating a more holistic approach to creating joint value. Solutions need to be ambitious but realistic, creative yet practical: things that get teams in both businesses equally excited to get on and deliver, to achieve that joint growth.
- We consider the ‘real world’ from the start. Your strategy needs to be right for your business, and not a theoretically-perfect model built solely on data which doesn’t feel specific to you. As well as uncovering compelling data-driven insights, we incorporate business priorities and commercial considerations from kick off to make sure that the strategy resonates across your business. And we get teams out into the world to see the categories through the eyes of consumers, shoppers, and customers – the valuable stuff that data can’t tell us.
- We know that categories grow through brands. We believe in transparency in the idea that suppliers want to grow the category through their brands. It has to be about driving joint growth – only then will both parties fully commit.
- We believe that Category is as important internally as it is externally. A more fragmented supplier base and tighter ranging mean it’s more challenging and complex than ever to influence a retailer to list your product or implement your initiative. A truly cross-functional approach is needed: if you base your brand and commercial plans on the same consumer, shopper and customer insight, you’ll align your strategies better across different functions and find genuine joint-growth opportunities. The ‘sell’ becomes more compelling, the implementation more likely, the impact bigger.
If this is of interest to you, please join us on 27th September in Amsterdam for our ‘Business Not As Usual’ forum, to hear from other commercial leaders about how they’re growing categories through their brands.
For more info on the event and to follow the discussion, please visit https://bnau2018.oxfordsm.com