So many products, so little time.
By John Matthews.
A category manager will massage their planograms in search of the “unicorn” of displays, spending hour upon hour trying to get it just right.
While the customer clearly appreciates the latest products, sometimes they just appreciate their product in stock and on the shelf. It can be as simple as that. Category management is one part product selection and one part execution.
Assuming that the category manager has the product selection process well in line, let’s focus on the execution within each category. With the start of each year, planning for your annual merchandising and promotional schedule should be in place.
For the multiunit operator, identifying the key initiatives for each merchandising category is critical to remaining on plan and on budget throughout the year. Each category should have targeted initiatives, all represented with sales and margin goals—including rebates—with assigned owners and key deadlines identified.
All too often, multiunit operators leave too much to chance with their merchandising or simply promote items from month to month without a cohesive annualized plan. A well-thought-out category management plan enables the operator to know in advance where incremental sales and margin will come from.
Failure to create these initiatives with benchmark financial metrics will leave retailers wallowing in missed opportunities throughout the year. Dovetailing these category targets with a monthly key performance initiatives (KPI) review will assist in keeping the plan on time and on budget.
PRODUCTIVITY INITIATIVES
Each of these initiatives should be a productivity task—in other words, achieving results through non-capital investments. Retailers should identify a series of initiatives for each category and the amount of sales, margin and rebates they expect.
Retailers should also produce initiatives in each category that will add to the previous year’s baseline. Initiatives should include both growth initiatives as well as offsets (price increases, etc.).
CORE STORE PLANS
Initiatives developed by category roll up to new yearly sales, margin and rebate projections. This exercise holds the category manager accountable for financial expectations as well as on-time delivery. The key is to be able to identify all the growth tasks for the category and to implement them in a timely fashion.
If he or she prefers, the operator can bifurcate the initiatives into baseline stores (core) and new stores (growth or acquisitions). This enables the owner to determine if growth at the core or base-store level is because of productivity or simply adding more stores.
Initiatives are assigned an owner and a deadline for implementation. Ongoing operations meetings should include discussion of past implementation and next-quarter initiatives, including post analyses. This keeps the category team from missing deadlines, projections and implementation steps.
The post-analysis process puts in place a discipline that can be used to vet future ideas with concrete benchmarks.
MANAGING A TIMETABLE
Lastly, all initiatives should have specific launch and completion dates. Remember, the financial targets and expectations of each task are predicated on this. In other words, missing the dates that financial expectations are due to begin puts the achievement of those metrics in peril.
At the end of the day, the category manager needs to own the entire category—from selection to execution. Creating the planograms is not enough. Treating the entire category holistically through execution and focuses on every aspect of the customer are key aspects.
Also, each category should have a number of key initiatives identified and projects planned for implementation throughout the year.
The monthly KPI review process generates financial updates on the status of each. Make adjustments to ensure that financial goals are met. By establishing these plans in advance, the multiunit operator can prosper throughout the year with a cohesive category strategy.
