Category management is a categorisation of products according to buyers' shopping habits. It is used within any retail store, including the supermarket or its website with the possibility of ordering goods for home delivery. Category management for one retail chain (for example, several supermarkets) is similar to physical stores and online trading. However, the categories may vary from point to point. This is because it depends on the customers who often visit the store.
What does a manager have to know when starting to work on categories in the supermarket?
It's going to be difficult to analyze customer segments
Simply because they are going to be buying goods offline. When you move at least 50 per cent of your goods online to collect goods in-store or pay for home delivery, the whole situation will improve. Although, this still does not guarantee that the customer segments will meet your expectations. Yes, you can track customers through recurring patterns in receipts. You can also come up with hypotheses based on the data obtained from your competitors and other market analyses. Still, you won’t be able to study your customers under a microscope.
The cost of a product will often take precedence over its other qualities
It is a major problem for category management in supermarkets and retail in general. Most likely, grocery store visitors care more about the product's price, and low cost always wins over other characteristics. Therefore, it will be more challenging to create categories: inevitably, you should be guided by the price of the goods.
At some point, it will be difficult to fight off competitors
You will be selling the same items which are available in other supermarkets. Some manufacturers may agree to cooperate exclusively with your chain of stores; however, this is unlikely because this arrangement is simply unprofitable for the supplier. Moreover, it's impossible to lower the bar and start undercutting, that is, trading at a loss. After all, a business needs to earn money. In some instances, it may only be achievable through introducing discounts.
You will be able to test hypotheses only on a small number of consumers
Why? Most trade will occur in offline stores rather than in their online equivalents. And this, as we remember, complicates the task of marketers and, unfortunately, category managers. Only a small percentage of consumers shop online. That makes sense: you have to pay for delivery. You can't select your products or ensure that all your fruit and vegetables are intact. Your delivery guy might also be late or you may face logistical problems like mixed-up orders.
How can you test your hypotheses on those customers who have turned to your supermarket website? First, you have to study your portal analytics: how users have found you, how they behave on the site, which tabs they open first, and how their filter products in various categories. If you have social media accounts, be sure to use them. The statistics offered by Instagram will demonstrate who your customers are and how they behave. By understanding the core of your audience accessing your resources, you can create category management hypotheses and test them on users before displaying the goods in stores. Of course, many of your customers will not shop online. Still, you can learn all about them, for example, through their choice of purchases on receipts.
The variety of categories will depend on the location of the supermarket
This limits your ability to influence the profits of the business. The categories will depend largely on areas where your shops are located, as well as people who live there and their buying power. For example, it is pointless to introduce a category of personal care products if jars of face cream have been sitting on the shelves for months in a particular store. It makes no sense to reduce the number of household goods with an above-average price tag if they sell like hotcakes. If you work in a supermarket in a deprived area, be prepared for a succession of identical categories with low-cost products.
Start learning category management now to secure a job within this field in a few weeks! This area has been actively booming in India and the surrounding regions. Therefore, your knowledge will definitely be in demand.
