Category management is a collaborative, continuous process between consumer packaged goods (CPG) manufacturers and retailers to identify, analyze, and manage a consumer’s “need state,” which is often referred to as a “category.”

The discipline of category management is taking on increased importance for CPGs and retailers in the era of big data and shopper marketing. Category Management Association (CMA) lays out the key trends that are leading brand owners and retailers to devote greater resources to the discipline.

TIBCO Spotfire overlays these trends with recommendations on ways to apply big data and analytics to obtain optimal results.

Growing Power for Retailers

Retail buyers are called category managers for a reason. They’re incented and paid to grow categories, not brands. The retailer’s power is growing at the moment of truth when shoppers are interacting with products on the shelf.

The data that’s being generated in these instances – including point-of-sale data as well as data that’s gleaned from in-store video cameras and other sensory data – can be analyzed and used to inform retailers about consumer behaviors and to generate real-time, personalized offers based on that customer’s purchase history, customer lifetime value, and other factors.

Growing Importance of Marketing to the Shopper

Just as retail buyers think in terms of categories, consumers think in terms of “need satisfaction,” says CMA. That’s why shoppers often write terms on their grocery lists such as “detergent” or ”bleach” or “bread” instead of brand names such as Tide, Clorox or Wonder.

To engage and convert shoppers, retailers and CPGs need to think category first. Retailers and CPGs can analyze POS data, coupon conversions, and other transactional data to identify which categories resonate with specific shoppers.

They can then craft offers through data-driven marketing decisions that strike a balance between addressing a consumer’s category needs while securing the optimal profit margin for that product.

Using Big Data for Insight Generation

There’s a torrent of data being generated regarding consumer behaviors, shopper loyalty card data, data generated by social media sites used by shoppers for deals, etc.

Retailers and CPGs can use predictive analytics and data discovery tools to determine things like unmet needs that can be used for new product development; optimal locations for key communication touchpoints; and the emotional factors that influence a consumer’s needs.

Category management is extremely data intensive, very process driven and analytical in character. There are enormous opportunities for retailers and CPGs to better understand and act on consumers’ category needs to optimize operations and strengthen business results.

Next Steps:

  • Please join us on Tuesday, July 15, 2014 at 11:00 a.m. EDT, for our complimentary webcast, “Real-Time Category Management,” where you will learn how category management done right can help you connect with your customers, develop your brands, manage trade spending, optimize product placement decisions and help grow your sales.
  • Subscribe to our blog to stay up to date on the latest insights and trends in big data and big data analytics.

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