Dr Pepper Snapple Group looks to automate category management
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
For the past six years, Dr Pepper Snapple Group has relied on a seven-stage category management process for space and assortments in stores. Now the beverage company wants to speed up the process. The goal is to continuously update the planograms by feeding more data into the system automatically.
"We want to make category management a continuous process, not a project-based process," said John Williams, director of category management for the company, recently at the Category Management Conference hosted by the Category Management Association (CMA) in Orlando. "We need to be more automated and then focus on insights and the shopper. That’s where we see it going."
Continuous Category Management is generally defined as a process that employs real-time information and instant alerts to enable trading partners to make informed category and product merchandising decisions more rapidly.
New business processes and technologies have enabled the automation of store-specific planograms in seconds rather than months. Meanwhile, data collection technologies from image recognition powered by on-demand robotic technologies that maps whole stores down to shelf positions can provide deeper insights into assortment management as well as optimally link the shelf to the supply chain.
Danny Halim, JDA Software’s VP of industry strategies, who spoke with Mr. Williams, said that while cameras in stores can monitor shopper behavior, they can also be used to view shelf conditions.
"The interesting thing about this is thinking beyond a snapshot of the shelf," he said. "What if we can get real-time information from all the stores? With a great deal of accuracy, we can understand the condition of the shelves: the compliance of the planograms on the shelves, the in-stock and out-of- stock conditions on the shelves. I think that is going to be the game changer."
The cloud could be another area of development for automation. Mr. Williams said, "As you know, an IT project can take a long time. Sometimes we might not have the resources. But put it into the cloud, and it becomes very automated. That’s where we see it going."
Continuous category management is another level to reach for; that is, having data feed into the process and allowing planograms to be created and reviewed automatically.
"We can also have analytics based on trends," Mr. Williams said, "not on what previously has happened. Days of supply: We could use a methodology that would be part of it. You would have the right days for a bottler delivery to the stores so you’re not out of stocks. We then take it from category to aisle and to the rest of the store."
In what ways may new data collection technologies reshape the future of category management? What parts of the category management process will benefit most from such real-time analysis and automation?