How CPGs can win the argument for category space in 2 minutes

How CPGs can win the argument for category space in 2 minutes

With many retailers looking to rationalize SKUs, it couldn’t be more critical for CPG manufacturers to prove their brands at the shelf. So as a manufacturer, how do you do this intelligently and provide the best assortment recommendations for the category and the customer? Learn more in this 2 minute interview with our Head of Category Planning, Julian Miller.

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    Manufacturers are constantly pushing innovation into the category. They’re always looking for new opportunities, new flavour variants, value engineered pack sizes, and actually, it’s ultimately for the retailers to make the right decision. A busy category manager does not have the time to properly evaluate all of those decisions in a structured and sophisticated way. So often, it’s the manufacturer that will give the largest slotting fee, that wins. And this isn’t always the best choice for the category or for the customer.

    So one of the things we look very carefully at, is the customer data. And through the customer data, we’re able to understand a number of different things. We’re able to understand which products are important to customers, but also when we delist a product, how the demand from those products will transfer or even if it will transfer within the category. That enables us to rationalize the assortment in a much more sophisticated and scientific way, than perhaps we’ve done in the past. We can also make these decisions very quickly in real time and we are always using the most up to date customer data.

    I was recently working with a large manufacturer in the UK and they had a suspicion that one of their categories was significantly over assorted in one of the retailers that they work with. And they wanted to take this argument to the retailer, but they didn’t really have evidence to back up this claim. We ran the analysis and we looked at which items we could safely delist, and it turned out that 20% of the assortment was redundant. And actually, by delisting those items, we could do it in a away that shoppers would actually be likely to transfer their purchase to a more expensive item, and ultimately it would grow sales for the category by around about 1%. This of course, was the crucial piece of evidence that the manufacturer needed to take back to the retailer, to win the argument around category space.

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