Stores Tire Of Category Management Techniques
While thinking of brands in terms of category management continues to be the status quo for marketers, retailers are kind of over it, a new study finds. Instead, stores are looking for smarter ways to drive sales by leveraging consumer insights, with Kroger, Walmart and Target earning the highest marks for their shopper-centric tactics.
So although 81% of marketers say the idea of category management is either very or extremely important, according to Kantar Retail's 2011 Category Leadership Benchmarking Study, only 72% of retailers agree -- down from 78% two years ago. Mass stores and convenience retailers are even less likely to rate category management as important, and some store executives included in the study voiced growing concerns over low ROI.
"In the past, both retailers and manufacturers used to be more focused on the tactics of category management, like assortments and pricing and promotion," Ginny Valkenburgh, SVP at Kantar Retail, based in Wilton, Conn., tells Marketing Daily. "But now, retailers are looking through a very different lens. They are asking many more questions about what people want: What are shoppers looking for? What occasion is a food for? Can they find the products they want in the store? Why did they choose this store, and not another?"
Increasingly, she says, retail executives are asking marketers for help in developing their insights with proprietary and customized information, linking that information with their own insights, and building plans around that.
Kroger, Walmart and Target were rated first, second and third in terms of their practices, as they were two years ago, "because they are so focused on these insights," she says.
"Kroger, Target and CVS have become stronger in this area with 1.7, 2.7, and 3.8 percentage point increases, respectively," the study says. "Walmart remains in the top 2, but has fallen nearly a point since 2009. Meanwhile, Safeway has fallen nearly 10 points since 2009, reflecting manufacturers' perception of a disconnect between effort put in and lack of action from the retailer."
The research, which drew on insights from both marketing and retail executives, concludes that both sides predict this ability to harness insights will be key going forward, with an increase of over 30 percentage points between now and the future. And both say that while the balance of marketing power is fairly even between stores and marketers today, it will shift decidedly toward retailers in the next five years.
Despite their differences, she says, "both sides will win if they are focused on consumers and shoppers. Where they tend not to win is if either one of them is focused on product or a singular brand."