A future-oriented category planning strategy
Challenges have long been the norm in retail, whether it's environmental disruptions or the ongoing COVID-19 epidemic, or structural disruptions such as changing consumer habits in the omnichannel world. In today's environment, solutions are needed that allow retailers and CPGs to have flexible infrastructure and operational data to manage these disruptions.
Many category planning tools have been in use for over 10 years. Fortunately, now is the best time to invest in innovative technology and analytics that already exist. A category planning strategy that takes into account biases and disruptions is essential for retailers and CPGs to thrive in the future.
Retail innovations will shape the future of business for decades!
Often times, retailers and CPGs are unhappy with the proposed category planning solutions. The reason is that they use technology to forming strategies that was created many years ago and, although it has been periodically modernized, has already reached the point where it cannot go further.
Retailers need to innovate to grow sales – old ways and methods are not enough today.
The urge to move forward is wonderful in itself. But, if it translates into the creation of a pseudo-hybrid model of the category planning strategy or comes down to trying to a little bit patch something, then this is work for the short term. Such a decision will definitely not prepare the business for subsequent changes.
More recently, talk of innovating in operating models has been perceived as utopia. But now the market is ready and even requires retail to operate in a new mode with constantly changing input data.
Today it's not just about replacing one solution with another, but about real innovation in category planning strategy. Given global trends, the changes in the industry over the past couple of years associated with the pandemic are definitely the right time for a change.
In addition, statistics confirm the need for innovation in retail. When asked about the degree of automation of business processes and the use of software, most of the respondents answered that, in their opinion, they have access only to basic analytics. With this state of affairs, it is impossible to quickly respond to such serious changes as COVID-19, or to keep up with online stores, which can change their assortment in accordance with the individual needs of consumers.
Consulting for Retail solutions for planning, optimizing and managing clusters and categories are up-to-date, forward-thinking and future-proof. The use of modern technologies, extensive expertise and the presence of a team of specialists allows us to develop and implement solutions that will be relevant for decades, ensuring business development in the face of constant challenges.
How does exploratory or predictive analytics support your category planning strategy?
In practice, according to a joint study by the Consulting for Retail vendor – Symphony RetailAI and Incisiv, 80% of retail chains do not have sufficient analytics to make timely and effective decisions.
Up to 5% sales growth can be achieved with the introduction of higher-level analytics categories into the planning strategy and bring them to a qualitatively new level.
In our practice, there are cases when the client uses analytics mainly to understand the interchangeability of products with demand switching. This is done to understand that a product or brand can be removed from the assortment, and sales will easily move to other products. Based on this data, the retailer builds an optimized assortment, which is an excellent example of using advanced analytical capabilities.
Another important point in the category planning strategy is the possibility of the CPG supplier and retailer collaborating to create the best consumer-oriented assortment. This is the best and win-win interaction for both parties. Instead of spending time negotiating, the supplier and retailer can focus on increasing mutual sales through data sharing. This collaboration benefits all three parties: the retailer, the supplier and, of course, the consumer.
The topic of collaboration between the supplier and the retailer was the subject of the report of the CEO and founder of Consulting for Retail, Pavel Shcherbakov, at the retail industry exhibition – RAU EXPO 2021. We wrote about this in our publication.
System Integration Improves Category Planning Productivity!
In terms of analytics and innovation, integration remains an important issue for a good category planning strategy. Cloud-based C4R solutions are designed to seamlessly integrate data from different sources. As a result, data is transmitted directly without manual adjustment throughout the platform. In addition, there is a significant difference between using on-premises database solutions and cloud-based solutions.
Cloud technologies, unlike local databases, offer more opportunities for data access and analysis from anywhere in the world. Also, an important advantage is access to the data of both parties and the traceability of actions to work with information, which reduces the risk of changing or deleting data.
Avoid silos system – an integrated analytics platform increases data storage reliability and productivity in the category planning process.
What are the risks of using outdated systems:
- Systems without integration allow users to manually overwrite data in the planogram on the desktop, any user can load the information into the database, and it will save them in tables, and there will be no checkpoint for recovery. Such manual methods of adjusting the data lead to changes in the data, which completely makes the use of analytics completely meaningless.
- In addition to all that has been said, non-integrated systems are inferior in that the data must be processed manually. What happens when users have to transfer data from one process to another, or somehow interact with information? The analytic process becomes dependent on the human factor, loses quality and takes a lot of time.
What conclusion can be drawn from this? Integration is really about improving productivity in category planning. A fully integrated platform makes the analytics process more productive, and you get a clean source of data to shape your strategy.
Interested in learning how to shape smarter assortment in practice, and how partnerships in managing your category planning strategy can help drive sales and profits? How to do your intelligently approach clustering, and how does a fully integrated system do all the hard work for you? Follow the blog articles or contact C4R specialists for advice on the automation of retail processes, audit and consulting services at +38 (044) 492-67-00!
Based on materials from symphonyretailai.com