Expert Column: Reaping the Benefits of Category Management Collaboration
“We have met the enemy and he is us,” wrote famous American cartoonist Walt Kelly in his popular Pogo comic strip. While meant to summarize the writer’s attitude toward the nature of the human condition, it can also illustrate how both manufacturer and retailer merchandisers feel from time to time. Long hours, endless work, and a struggle to get the simplest things done, the work can often be exhausting. Much of this stems from a failure to establish a truly collaborative atmosphere – from the development of strategy and tactics, to sourcing and planning, to execution. Not only does forgoing collaboration consume tremendous time, energy and resources, it also denies the parties the chance to ultimately build the best programs. “None of us is as smart as all of us,” goes the Japanese proverb.
Manufacturers Ahead of the Curve
Attitudes to collaboration tend to be rooted in the culture of an organization, and some retailers and manufacturers are better at collaboration than others. For example, many grocery retailers have been collaborating with CPG manufacturers for years. Because of this, manufacturers have invested in capabilities over time that have allowed them to establish the intellectual property necessary to collaborate successfully. In fact, many CPG manufacturers have actually outpaced their retail counterparts when it comes to successfully merchandising their products.
Today, collaboration is often being driven by the manufacturer, and manufacturers’ ability to develop a program that is highly relevant and localized often stretches retailers’ ability to assimilate and execute the program. For example, many retailers can’t support category-level clustering operationally or culturally – or accommodate regionalized and localized assortments to the degree that opportunity exists.
The call to retailers is to invest in analytics, supply chain solutions and store management capabilities to keep up with manufacturers. Some retailers rely on store-level clusters when research shows this is not the optimal approach. Because of the additional planogramming required, retailers often won’t add a third or fourth cluster, even though the time and cost investment is minimal in comparison to the potential gain. Unfortunately, this is a major roadblock to successful collaboration. Strategically, the excuses border on…pathetic.
A Team Approach
Successful collaboration takes a team of experts, all of which must be coordinated by a “strategy QB” who is usually the category director or manager. When the “strategy QB” calls a “play,” each team member should know what their role is and how it helps the team to achieve its shared goals. While there will likely be some competitiveness with various members of the team, it is important to leverage the skills of each team member to maximize program results. Good internal collaboration is also important. Category management, advertising and space management all must work in unison to ensure successful program execution.
Retailers should also take advantage of every available resource to push the consumer-centric envelope. For example, if Kellogg’s places a planogrammer on site, work closely with that person to ensure he or she is utilized effectively. However, it is important that retailers don’t rely exclusively on manufacturer resources. Retailers should develop complimentary resources and capabilities to maximize program effectiveness.
Collaboration between retailers and manufacturers at its core is simple management strategy. Gather a group of smart people, workshop, strategize and establish a plan that puts the right people in the best position to execute the plan. If teams within the organizations can let their guards down and work together toward a common goal, then all parties involved will win.