How to Be a Category Captain in Today's CPG World

Editor's Note: Learn more about CatMan 2.0 in Progressive Grocer's 2018 Category Management Handbook.

This article explores the role and work to be done, the data requirements, necessary skills, and the process outlined in CatMan 2.0.

Each retailer has a distinct set of expectations and deliverables for category captains; however, there are core job requirements. Manufacturers that deliver on the requirements will help influence strategies and tactics in the role of category captain.

RoleS and Responsibilities

Let’s start with a definition: A category captain is a person or team of people who help a buyer at a retailer drive the retailer’s sales through a focus on tactics and strategies that deliver that category’s shopper.

The tactics and strategies are developed from insights obtained through marketplace analysis of what drives shopper purchases. A category captain is an unbiased analyst who works to deliver the retailer’s goals for the category.

The work of a category captain falls into the following buckets:

1. Planogram or modular responsibilities

2. Weekly reporting of category results/key sales data (pricing/promotion/assortment)

3. Marketplace analysis to determine whether a retailer is winning or losing, and providing insights as to why

4. Strategic yearly review of the category for insights into needed tactics and strategies

5. Ad hoc analysis per buyer requests

Planogram/Modular Responsibilities

A category captain is expected to fulfill the responsibilities of today’s planogram process. There are several solution providers and analytic tools that can help deliver the steps of the process:

1. Category review: The captain performs an analysis of current assortment to evaluate additions from the marketplace and potential deletions. The review should look at current clustering to determine opportunities for potentially different store groupings.

2. Pre-modular work: The captain downloads the data, cleans them to ensure all “like” UPCs are captured correctly, attributes the data to a retailer’s request, rolls data to the appropriate store group or cluster or trait, and loads them into the appropriate planogram-drawing software.

3. Modular drawing/proofing: The captain needs to follow the retailer’s shelf principles to accomplish shelf goals, maximize in-stock and minimize inventory.

4. Post-modular evaluation: After implementation in store, there needs to be an analysis of modular performance to determine opportunities for improvement. The analysis is done by store, or cluster or at the chain level.

Weekly Reporting

Each retailer has key measures that it expects to be recapped and time trended on Monday morning. One set of measures is from the retailer’s data: dollar sales, volume sales, inventory, turns and potential profit dollars.

The weekly report on the retailer’s data should track results versus annual goals. Another set of weekly reports comes from syndicated data – Nielsen/IRI – with a focus on the retailer’s market share on dollars/units/volume. These reports can look at pricing versus competition, ads run in the marketplace, and assortment measures.

There's also a group of household panel measures that can be updated monthly: trips, dollars/trip, closure, loyalty, leakage and others.

Marketplace Analysis

A key responsibility of the captain is to be a marketplace expert on the category, with an ability to provide shopper insights and highlight which retailers and channels are winning and losing.

The analysis of the marketplace is a daily responsibility that focuses on the sales fundamentals that drive the business: pricing, promotion/merchandising, assortment/distribution and shelving. The captain uses all available data sets to review the fundamentals to ascertain how retailers are using them to drive shopper behavior.

The captain will review market share trends based on dollars/units/volume, as well as the actual versus prior year and a run rate. The insights derived from the analysis should lead to strategic and tactical choices to drive shopper behavior and purchases.

The $100,000 question is, how do we get to these insights?

We believe that the insights come from thoroughly answering and understanding the dynamics involved from these questions:

• What is happening in the category?
• Why is it happening?
• How should the retailer respond?

Strategic Yearly Review

The category captain should provide a yearly review of the category, based on trends, sales and any innovation that has launched.

The review should focus on the key measures (dollars/units/volume), using the attribution of the category. The sales are then analyzed to determine who’s winning and why. The shopper data are an integral part of this review in determining how the shopper has shifted behaviors and purchases during the past year.

The key deliverables from a yearly review are:

1. Strategic choice on which segments to drive to deliver goals

2. Strategic choice on which brands to drive to deliver goals

3. Shopper choices: focus on closure, loyalty and leakage

4. Assortment and shelving in the marketplace, and key retailer competition

5. Pricing and promotion in the marketplace, and key retailer competition

Data Requirements

The data necessary to succeed at the category captain position have increased dramatically over the past five years.

The proper data warehouse is a must for category captainship. The category captain may not value all of the data sets below, but it needs to have expertise and understanding of the following data:

1. Retailer POS: Connect all of the various data types that exist in a retailer’s system.
2. Syndicated data: The majority of marketplace analysis is done using syndicated data to understand how changes in the sales fundamentals are driving shopper behavior.
3. Household panel data: Understand the terms and how they’re calculated. The key terms to draw insights from are closure, share of wallet, loyalty, leakage and household penetration.
4. Marketplace ads/coupons: Several solution providers capture all of the promotional ad details in a market.
5. Retailer loyalty cards: A category captain must be able to mine this data to ensure that strategies and tactics are delivering new buyers, increasing purchases among existing buyers and not alienating a target shopper group.
6. Ecommerce data: As more categories move to a significant share of sales online, a category captain needs to understand the ecommerce trends in its category and department.
7. Social data: Smartphones provide a never-ending supply of data on retailers, brands and categories.

The Process

The introduction of category management via CatMan 1.0 more than two decades ago marked a turning point in how retailers and suppliers approached merchandising, shelving and assortment-planning decisions.

This process is now at an inflection point, thanks to the emergence of new industry dynamics. These dynamics include the ever-changing shopper, an explosion of new data sets, the dramatic decline in data storage and processing costs, the development of analytical tools that allow quicker insight generation, and the growing importance of ecommerce.

CatMan 2.0  is the new industry standard process to create a comprehensive plan that meets shopper needs in a superior manner to produce better results for retailers and manufacturers. It’s a holistic approach toward developing a plan based on data analysis that generates insights, which leads to strategy development and tactical success models.

The process looks to enhance the workflows created in CatMan 1.0 by using all of the cutting-edge abilities of new data warehouses and analytic tools. Now panel or market-level data also includes a view into ecommerce results and shopper behavior.

In addition, suppliers can now measure activities like in-store displays, coupons and more across custom time periods instead of relying on weekly syndicated aggregates. The data provide extraordinarily valuable insights into brand and item loyalty, substitutability, and shopper behavior. CatMan 2.0 is one process to identify how these new data types inform and improve practitioners’ ability to build better category plans.

CatMan 2.0 highlights the key industry changes – an abundance of new data, the emergence of ecommerce, smartphones, and innovative technologies – and establishes a framework for how to integrate the changes to drive insights. The 17 workflows in CatMan 2.0 allow a captain to use the correct tool or process at the proper time to deliver insights that drive the business.

The CatMan 2.0 process includes choosing the right data visualization to bring to life “what is happening” and “why it is happening.” The new standard for presentations is a dynamic, easy-to-comprehend, automatically updated flow of data that’s turned into actionable insights. Today’s data visualization solution providers are constantly making their products perform better – outstanding graphics, more choices, easier to code, and outputs that are easy to understand.

CatMan 2.0 will continue to evolve and add necessary best practices and standards as shopper behaviors are shaped by technology. The Category Management Association is launching a major project on ecommerce category leadership that will define best practices for the industry on standards and analytics.

Category management is on the cusp of the biggest changes in its 25-year history. The combination of innovative technologies with a constantly changing retail landscape has given more power to the shopper. The retailers and manufacturers that turn their abundance of data into actionable insights will influence the shopper on their journey to purchase.