I Have A Dream
By Dr. Stephen Needel
So began a pretty famous speech, and so begins any number of stories about Category Management 2.0, in which there is once again a call for retailers and manufacturers to work together to deliver what shoppers want. For those of you unfamiliar with CatMan (as those in the know call it, because who can resist a catchy abbreviation), it was the 1990s brainchild of Brian Harris. He created a process by which retailers would have category captains – a major player in the category – who would help guide the retailer to better assortments, shelf layouts, and pricing. The retailers got more profitable categories and, in return, the captains got somewhat preferential treatment when it came time to allocating space or promotion slots or delisting.
As I wrote for ESOMAR back in 2007, this all went horribly wrong. The process to do CatMan “correctly” filled large 3-ring binders with pages of forms that nobody ever looked at. Manufacturers created armies of category analysts at major retailers to assist them with the intricacies of the process, which often ended up being free labor for the retailer (planogramers of the world, unite!). The town of Rogers, Arkansas, it is said, was created for this very purpose. I talked with a number of manufacturers for the ESOMAR paper and asked them the very pregnant question, “Are you making any money off this process?” Mostly people would look with eyes downcast and not say much; they either didn’t know or, more often, didn’t want to know.
The concept was broken for a two very simple and obvious reasons:
- What is good for the retailer is not always good for the manufacturer, and vice-versa.
- Understanding shoppers, which is supposed to be underpinning the whole CatMan process, is not an easy thing and few do it well.
ASL has been doing CatMan research for 25 years now. As we’ve repeatedly shown, the ability to produce a shelf assortment and/or a shelf layout that helps both the category and the manufacturer’s brand has been limited. Only 15% of the time have we seen a win-win outcome, in a process where all the outcomes should be win-win. Trust me when I tell you that most of the scenarios we’ve tested have never seen the light of day at a retailer presentation.
RESULTS OF 327 CATEGORY MANAGEMENT TESTS
There are a number of reasons why these attempts to improve the assortment or the shelf layout failed; but mostly, they fell into two camps:
- We think we understand the shopper but our understanding is incomplete or incorrect. So when we make a change, it’s not aligned with what the shopper wants or needs.
- We understand what the shopper wants or needs, but we either can’t translate that to the shelf or we translate it incorrectly.
The new calls for category management simply echo the past rationales for the process. CatMan has always been designed to be shopper-centric, it has always been designed for all parties to share relevant information, and it has always been Pollyanna-ish in believing altruism will prevail over self-interest.
At its heart, category management and its poor step-child, shopper marketing, has always been about fact-based selling, which existed well before these came to life. We have yet to meet a retailer who wasn’t interested in a better way to merchandise a category. Being a neutral third party, we always get a hearing for our recommendations. Do good shopper research. Design better in-store programs based on that research. Test the programs before going to the retailer. Stop dreaming about unicorns and true category management.