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Suppliers Add Value With Category Management
DotActiv TeamJul 5, 2018 8:20:40 AM7 min read

How Suppliers Can Add Value with Category Management

While the adage - two heads are better than one - is a tired cliche, it still serves a purpose. That’s especially true if you were to use it when referencing category management. Or, if you were discussing the influence a healthy retailer-supplier relationship can have on category performance. This relationship should be a partnership that is collaborative rather than disconnected.

Fortunately, there are many different things that you can do to ensure this relationship is mutually beneficial. More importantly, there are many different ways that you can get involved and add value with category management.

1. You can become a category captain

The first way in which you can get involved and add value is to become a category captain.

What is a category captain and what role do they fulfil? We’ve already answered both questions in full in another article, which you can read here.

In short, category captains are suppliers or manufacturers who have the most prominent brand in the category or one who has the resources to create planograms. They’re also likely to have in-depth knowledge of the category, gained from years of experience. That means they can offer valuable advice on how to grow a category. More importantly, they can help retailers achieve a competitive advantage.

Of course, that’s not to say that you can’t become one if your brand isn’t prominent or if you’re not a certain size. With time and effort, a supplier of any size can become a category captain.

Let’s say, for example, that your category doesn’t have a captain. You could take the initiative and approach the retailer, offering to create the planograms for them, thereby working yourself up to become the captain for that category. Or, if you’ve noticed that the incumbent category captain isn’t pulling their weight, you can meet with a retailer and explain why you’re a better fit.

Interested in getting involved as a category captain? Then it’s worth reading this piece. In it, we touch on key characteristics that will make you a good fit, as well as the skills and knowledge you must acquire to become one. It’s also worth enrolling in a retail training course.

2. Give input when retailers have already centralised their approach

If there isn’t an option to become a category captain - most likely when a retailer has decided on taking a centralised approach - that doesn’t mean you can’t add value.

While in instances of centralisation, the retailer takes full control of the category management process, they do still call on suppliers for their input as and when needed. That’s especially true when you consider how helpful a second perspective can be.

For example, there is room for you to make recommendations for changes along with motivations for why they will benefit the category's performance. After all, while they're in full control you still have a unique perspective on a category that they should welcome.

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Also, because you might have more category knowledge, you could offer assistance around ranging and product flows. If you approach the retailer in the right way - offering genuine help rather than blatantly trying to push your own products - they’ll be open to your suggestions.

Of course, if the retailer does ever ask you for your advice, you do need to be careful not to over favour your products. After all, regardless of if the retailer follows a centralised category management approach or not, your role remains the same: you’re there to offer advice to help grow the entire category. And your suggestions should be impartial.

3. Partner with other suppliers to help a retailer (Category Partner)

A third approach to take if you want to get involved with category management is to become a category partner.

As a side note, this is the approach that we at DotActiv would suggest a supplier take. In fact, we’d recommend a retailer takes this approach too. That’s because when done right, it’s the most collaborative form of category management which yields the best results.

It’s also a less biased approach - more parties are involved, so every supplier can have a say in how a category is laid out. Of course, that does mean that you need to be open in how you communicate with the other suppliers and retailers so that there are no preferences.

As for who should consider this approach, that’s simple. This approach can work for you if you want to be involved and “have your say” but don’t want to be at the forefront of the category. It can work just as well for you if you’re a category captain for another retailer and you are looking to offer suggestions to a different retailer who has taken the category partner approach.

So how would this work correctly? Let’s assume that you’re working as a category partner. Once you’ve built a planogram, you’d first send it to the other suppliers who are working alongside you to get their input. Once everyone is agreed on the planogram you’d present it to the retailer for sign off and implementation.

4. Fund category management initiatives

As we’ve already noted, category management can be resource-intensive. However, rather than viewing this fact as a barrier to entry, as a supplier, it’s the perfect opportunity for you to help.

You can do that by either completely or partly funding a category management initiative that the retailer plans to roll out.

But how can you do that? There are a few ways, depending on whether the retailer has appointed a category captain or invested in multiple category partners. As a side note, this doesn’t apply when a retailer has already centralised its category management approach.

Let’s say, for example, that Retailer A prefers to work in close cooperation with a few suppliers, including yourself. To become a category partner though, Retailer A requires you and other suppliers to pay a monthly fee. Of course, they do need to prove to you that the price they’re asking you to pay is worth it. If they don’t, that’ll damage any relationship that you’ve built with them.

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You could look at investing in planogram generating software, and as a value-added service, generate data-driven planograms for your retailers. You can also outsource this to a third party such as DotActiv.

As a result, you can then offer to cover the cost of generating planograms for the category. Of course, you’d have to do a test run first; create and then implement planograms in a few stores and measure their performance before determining if it's worth rolling out to all stores. But the fact remains: you can provide the retailer with value by funding this part of the category management process.

5. Create a category management capability

While you can certainly look to fund any initiative that a retailer wants to roll out, have you ever considered creating your own category management capability?

Not only does this give you a competitive advantage over other suppliers, but having this capacity can give you additional insight into the process, which can help you provide more value.

As a supplier, there are multiple areas for developing such a capability. It starts with a category management platform, that includes data and insight, understanding shopper behaviour and more.

As for what a category management capable supplier looks like, you only need to consider the different areas that we mentioned above.

For example, it’s a supplier who has a well-established business and has their products in multiple retail stores. If this is you, you’d also have access to the retail data from all of these stores as well as a database where you could store all this information.

On top of that, you likely have a category manager and dedicated space planners who would be able to analyse data, product ranges and planograms.

That said, you can also outsource your category management needs to a third party such as DotActiv. DotActiv is an all-in-one category management solution that works for suppliers just as well as for retailers.

DotActiv can provide you with solutions that range from planogram generation and assortment planning software to floor planning and in-depth retail analytics. Using our software, users are able to analyse, strategise, compare, forecast, range, report and planogram.

What’s more, through our data integration process, you have the opportunity to link directly to data from your ERP / POS or just about any other system or data source. This will provide you with easy access to the information you’d require to manage the category as a whole.


DotActiv Team

The DotActiv team comprises category management experts lending their retail experience and knowledge to create well-researched and in-depth articles.