Can category management catch up to the omnichannel shift?
Through a special arrangement, presented here for discussion is a summary of a current article from the bi-monthly e-zine, CPGmatters.
The Category Management Association recently announced “a new strategic direction” called Cat Man 2.0, which is focused on “the evolution of category management in an omnichannel world.”
“It took the pandemic to really shake the behavior of the CPG industry,” Mike Gervasio, vice president of category leadership for PepsiCo and the new chairman of the association, told CPGmatters after the CMA created the new position.
Indeed, the pandemic was especially disruptive to major players such as PepsiCo that are “category captains” in bricks-and-mortar chains. These leading suppliers are essentially put in charge by the retailers of managing the vast array of offerings that can fit into specific aisles and help optimize sales of an entire category, not just their own brands.
“We have lots of capabilities and tools and inherent knowledge for category management in a bricks-and-mortar environment,” Gervasio said. “But now consumers can buy their products anytime, anywhere and in any way, a reality that’s been accelerated by five years over the last five months.”
Mr. Gervasio said companies have to “acquire whole new sets of data and tools, hire data scientists and get new skill sets. Then, members need to make sure data is consistent and accessible across all retailing channels.” They need to solve challenges such as “figuring out how digitally curated search engines can create the category management equivalent of the front page of a newspaper ad or a lobby display or a [selected] assortment of products in a store. It’s all the same, but digital is different, with different levers.
“AI and machines are going to carry the ‘what just happened’ and help us decide what to do next, and how we should grow, and what choices to make and accelerate in regard to shopper behavior.”
Unfortunately, in the status quo, Mr. Gervasio said, “a lot of tools and capabilities and approaches are somewhat siloed in the ecosystem of bricks and mortar. The data and information, and the analysis, don’t necessarily connect with what’s happening in e-commerce. The tradeoffs and data sets aren’t apparent. We have to build new data sets and new mindsets to take advantage of shopping behavior and fully understand it, to be a half-step ahead of where shoppers are.”
DISCUSSION QUESTIONS: Do you see opportunities for category captains to help guide and speed omnichannel journeys for retailers in CPG categories? What near and long-term challenges may retailers face further translating category management to omnichannel practices?