Category Management was born in the 1990’s and now, for many, is business as usual. Yet many suppliers can still get caught-up in the pink and fluffy perception of category management and are still yet to prove to themselves and others, that adopting best practise will increase sales.
Here are ‘4 Ways to identify Sales Opportunities in Your Category’ that are commonly accepted as best practise and will increase sales in your category:
1. Start by having a ‘hippo’
Many suppliers, account managers, analysts and category managers get stuck into the data without having an idea of what they are trying to find. Yes, they are trying to find sales, but to start with that as an objective will result in the ‘looking for a needle in a haystack’ syndrome’. Start by having a hypothesis and then begin finding the data to prove or disprove that hypothesis, and then move onto the next one. An example would be, ‘More hot chickens can be sold on a Sunday from the counter but aren’t due to a lack of stock in-store’. Action: Identify and write your next hypothesis.
2. How much have you spent on research?
A huge amount of money is spent on qualitative research or ‘asking customers’, to use a more understood term. Much of the research happens in ‘lumps’, which means that there is a sudden thirst for a huge amount of information about the shopper. The research company executes the brief and then they attempt to share all this knowledge via a deck of 60 slides – 20% is implemented and the rest filed. There are still a number of opportunities sitting in filed shopper decks yet to be discovered. Action: Reviewing past decks, complete a simple 3 column table of Observation, Insight and Recommendation.
3. We’ve hit the glass ceiling!
Some categories are performing so well that we might struggle to find their sales opportunities. McDonald’s have a way of working to always want to ‘achieve the best of what they have achieved before’. This means that they know their best sales hour, best sales day, best sales week and best sales month, and then they aim to achieve it again because if they did it once, they can do it again. Action: Identify when your market share was at its best, by category, sub category, by month and by quarter, understand why and aim to beat it.
4. Stores can reveal real gems
Often we mine the category data for shopper opportunities, and forget that the supermarket’s stores can be a real source of sales opportunities. Stores perform very differently to each other and placed on a graph showing sales, waste, and availability, sales opportunities can be identified. For examples, extending the ranging into similar stores, reducing the ranging due to poor waste, or making recommendation by store format. Action: Test this hypothesis – ‘80% of your waste comes from 20% of the stores’.
Darren A. Smith, Founder of MBM, wrote this article for the BFFF. MBM enable suppliers to the big four supermarkets to secure more profitable wins. They are from your industry delivering People Development. Using their unique ‘Sticky Learning’ you too can have the best people for the long term. Checkout their Category Management Academy training course at www.makingbusinessmatter.co.uk