By Paul Rossberger, Lil’ Drug Store Products
Finding the right product mix that meets consumer needs while maximizing profit in limited space is the goal of every savvy retailer. The challenge, however, is finding the time to analyze scan data and sales figures and revise planograms. Many top retailers are seeing the benefits of teaming with a knowledgeable category management partner to speed-up the process.
The constantly shifting trends in the HBC category, for example, can make it difficult for independent retailers to identify the fastest moving and most profitable SKUs, and weed out those gathering dust. Working with a channel supply expert offers retailers unbiased customized planogram recommendations that include retail pricing and mix analysis and SKU optimization.
The ideal category management partner will understand the business overall, as well as the unique demographics of an independent retailer’s store, providing customized guidance for selecting and pricing items with maximum profit and appeal.
Partnering for success
Market analytics, an extremely valuable element of effective category management, provide retailers unbiased insight into a store’s customer mix and the competition it faces. For example, one store may be classified as a neighborhood stop where larger sizes of HBC items should be stocked, while another store may serve travelers who prefer convenience sizes. Furthermore, competition from other retail channels in HBC make set decisions more complex. Without data from a category management partner, the retailer may be forced to determine a store’s HBC potential through trial and error.
Adding new products to the set is another consideration for retailers as they attempt to find space and decide which products to remove from their line. An experienced category management team can provide a map of the right mix of products for the limited space allocated, saving retailers both time and money. They will make the independent retailer’s job easier and more profitable while helping design an HBC section that is appealing and most importantly, attracts customers.
Double-digit sales growth and healthier profits were the result, says Joe Hamza, VP of Sales & Marketing for New England’s Tedeschi Food Shops, Inc., when he relied on his supplier’s category management team for HBC guidance. Customized market analytics and planogram development led to new opportunities for Tedeschi to implement new sales tactics, address unmet demand in growing HBC segments and improve shopper satisfaction in the category.
Partnering with a category management expert can give independent retailers the information, advice and resources necessary to operate with the same level of efficiency as a leading chain. Rather than a small fish in a big pond, smart retailers with an experienced CM partner on their team will feel more like a powerhouse fueled by knowledge and insight.
Paul Rossberger is VP, Sales & Marketing, at Lil’ Drug Store Products (LDSP). LDSP is a global consumer products company offering a variety of premium brands through its three divisions: Convenience Retailing, Consumer Products and International. www.lildrugstore.com.