GROCERY: Category Management: The center is holding

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GROCERY: Category Management: The center is holding

After years of being "quite boring to shop" -- and losing share as a result -- the center store is finally starting to turn things around, says Thom Blischok, Information Resources, Inc.'s president of retail solutions, strategic consulting, and integrated solutions.

And Blischok should know: Chicago-based IRI's recently released Time & Trends report, "Center Store Revival: Retailers and Manufacturers Stage a Comeback" lays out in detail how and why this revitalization is taking place in stores across the United States.

Sharpened category management strategies have, of course, played a key role in the change, notes Blischok, who cites a new focus on item rationalization through such innovative displays as Campbell's iQ Maximizer gravity-fed can-dispensing system, which simultaneously saves shelf space and helps the average shopper find her preferred soup varieties in just seven seconds.

Another way the center store has earned back share is through products and assortments that are evolving both externally and internally, he says. While such packaging innovations as the easy-open caps on Nescafe jars provide practical solutions for shoppers in search of convenience, reformulations like the ubiquitous 100-calorie packs on center store shelves reassure consumers that they needn't sacrifice health concerns when buying items in the section.

A radical reinvention of the center store will also depend on what Blischok calls "solutions-based merchandising," which he thinks will become increasingly popular over the next five years. A current example of this are "thirst centers" featuring all beverages types in one place.

Spirit of cooperation

Similar concepts Blischok predicts will catch on are a "perfect picnic" area with all of the components for a successful picnic, including condiments, utensils, and baskets; a convenience center within center store offering such grab-and-go items as pain relievers, bottled water, and even umbrellas; and a home care solution gathering all types of cleaning products together.

An additional part of this overhaul will be the redefinition of familiar center store products, notes Blischok, just as Kellogg has done with its venerable cereal brands, positioning them not only as classic breakfast fare, but also as food appropriate for lunch, dinner, or an anytime snack.

For such changes to take hold, however, category management must evolve into "a collaboration to focus on the customer, rather than to cut a deal," warns Blischok. This spirit of cooperation must even flourish among CPG companies as more and more all-inclusive merchandising solutions feature complementary products from multiple manufacturers.

The above examples are just a few ways that the supermarket industry is "shape-shifting" the center store, using a "reminder-based, innovation-based, and need-based strategy," observes Blischok, although he concedes that "a lot more needs to occur" in this direction.

What's to come in center store? Blischok says we can expect "an explosion of spice displays in coming years" as mainstream consumers are ever more exposed to various cuisines using an array of soon-to-be-well-known spices.

Likewise, the health-and-wellness obsession shows no sign of slowing down, he adds, with aging baby boomers poised to look to supermarkets to help them manage conditions such as diabetes through informational packaging and signage.

In Blischok's view, an alignment between manufacturers and retailers "around thinking, understanding, and actionability" to best serve the customer will prove to be the key to a lasting center store revival.


Become more 'shelf-centered'

A new book from the New York management consultant firm Booz Allen Hamilton details how manfacturers are increasingly working in concert with grocers to win placement in their stores by perfecting assortment, promotions, and shelf quantities via the emerging strategy of "shelf-centered collaboration."

"Moments of Choice: Driving Profitable Growth with Shelf-Centered Collaboration," edited by Melissa Master and Catherine P. Taylor, with an introduction by Rich Kauffeld, Edward Landry, and Tom Casey, describes the approach as a major paradigm shift in the way grocers and vendors have traditionally worked together, requiring large-scale operational changes to enable them to create product demand based on the best available information, and design demand-driven supply networks to respond effectively at a granular level.

"Gone are the days when a handful of mass marketers and retailers ruled the consumer universe," says Kauffeld, v.p. with Booz Allen. "The dynamics and complexity of today's marketplace are forcing retailers and manufacturers to pursue revolutionary strategies to win by giving consumers what they want, where they want it, and at the right price. Shelf-centered collaboration is emerging as an integral strategy for leading companies to drive growth and profitability through large-scale capabilities to meet differentiated consumer demands at the individual store level."

The book discusses how CPG companies and retailers are successfully adjusting product assortment, promotion allocations, and shelf-replenishment quantities; sharing information to boost shelf profitability; and achieving unprecedented differentiation to significantly reduce out-of-stocks.

Among the companies the book holds up as examples of this innovative style of collaboration are Tesco, Giant Eagle, Procter & Gamble, Kraft, and Kellogg.