Category management in the food retail industry is stagnant, according to a new study by Food Marketing Institute (FMI), Deloitte Consulting LLP and Winston Weber, but a roadmap to a more insightful shopper-centric way of doing business is accessible in today’s market.
The collaborative business planning study suggests that the biggest shortcomings of category management relate to being too product-focused and too narrow in approach.
“Similar to the ambitions of the 1995 Efficient Consumer Response Initiative, our analysis in Shopper Centric Retailing recommends a culture change that challenges our comfort levels and bucks current trends in category management,” said Mark Baum, FMI’s chief collaboration officer. “We are calling for an industry transformation to adapt to today’s new consumer.”
The study found that 100 percent of retail and consumer packaged goods respondents believed some degree of change is required, a quarter of which believed that nothing less than an entire redefinition and transformation is necessary. Conversely, 85 percent of retailers have made either “no change” or “moderate change” to the initially prescribed, eight-step category management process.
Win Weber, chairman and CEO of Winston Weber Associates and co-author of the analysis, noted, “Our research strongly suggests that change is necessary, especially since no major upgrades to the ECR-prescribed category management process have occurred in the last two decades. Supermarkets are facing tidal pressures from shoppers who want their stores to evolve with their tastes and habits, so businesses need to resist the urge to remain complacent.”
Echoing his co-author’s findings, Tom Compernolle, a principal at Deloitte Consulting LLP, said, “A shopper-centric approach is consistent with the opportunities we see around retailer-CPG joint business planning. The Holy Grail is data – business intelligence shared between trading partners hasn’t yet been harnessed, as evidenced by the research.”
The study assesses the magnitude of foundational shifts needed within companies to address the pace of change in the food retail environment, specifically detailing:
- Organizational alignment
- Analysis of shopper insights
- Addressing shopper solutions
- Aligning category roles in the annual review process and goal-setting
- Reevaluating merchandising solutions
For a copy of the report, visit www.fmi.org/store
Source: Food Marketing Institute