This was the message from yesterday’s IGD category leadership conference which saw the charity put forward a blueprint for category leadership.
“The environment in which people shop has really changed and expanded – and we have got to move,” said David Warren, associate at IGD.
The report outlines a way to catch up with consumers who have left industry behind; calling for category teams to rip up the rulebook and start afresh.
What has changed?
Historically, consumer journeys were relatively predictable, with similar products found in one location and channels acting as shortcuts to distinct shopper needs. Growth came from incremental improvements in range, price, promotion, and space.
But today’s shoppers navigate through missions, occasions and touchpoints. People no longer shop within categories, but across them; with discovery and behaviour shaped in completely new ways, driven by the rise of ecommerce and AI, and personalisation a necessity.
74% expect personalised offers as standard and 87% of consumers stay loyal to retailers who give them something relevant in return.
Kat Simpson, commercial & strategy director at Unilever
While other industries have been quick to adapt to this new world – think about the evolution from DVDs to streaming platforms, and travel agents to online booking – Warren argues that suppliers and retailers have lagged behind.
“If we don’t change, we will get smaller,” Warren warned, pointing to designers which have almost been wiped out due to the advent of technology because “they didn’t change”.
The IGD blueprint, which has been developed in collaboration with industry and is set to have further updates, outlines a four-way view in which shoppers, retailers, suppliers and service partners can win together in this new landscape.
Winning favour with customers
A big part of this new approach is focused on continuous evolution – the idea that shopping is no longer a static environment. As such retail experiences must be able to adjust dynamically to the environment and individuals as they change.
We’re moving from a world of a few range changes and promo windows to thousands of prices changing weekly for millions of customers.
David Warren, associate, IGD
Industry must also switch from tracking and analysing what has happened and spend more time looking ahead. With AI able to automate traditional functions, such as historical data analysis, category teams must now anticipate disruption and shape strategy; moving from analysts to strategic leaders.
As IGD retailer research shows, the most valued suppliers are those who bring thought leadership, deep market knowledge, and a clear view of what is changing next to retailers.
“You have to move from the ‘what’ to the ‘so what’ to the ‘what’s next’,” Olly Ainsworth, head of category for chilled meals at Samworth Brothers, told delegates.
Warren agreed, noting that growth is no longer coming from established brands but rather those that dare to be “brave” and identify unmet needs.
We need to deliver to “unmet need stakes, not new flavours in a crowded space,” he continued.
He offered Mojo as an example, which has demonstrated that “juice now needs to be functional – otherwise it’s just sugar”.
Categories shouldn’t be fighting over the same slice – they should be growing the whole pie.
David Warren, associate, IGD
Category leadership in action
CCEP’s ‘category collaboration tool’ is one example of how manufacturers are responding.
The tool allows its commercial and category teams to deliver sharper, faster and more influential recommendations to customers through four different capabilities.
This includes a range tool which uses algorithms to score products on performance, incrementality, cannibalisation and transfer volume; calculating the impact of adding or removing SKUs in real time.
It also enables menus to be personalised, meaning cafes and restaurants etc., can have unique offers based on personalised consumer data and geographical insight. Promotional materials can also be quickly customised with the customer’s own images (e.g. a picture of the chef’s chosen dish), while AI continuously assesses performance of the promo.
Category management may have been built for a different era, but the opportunity is there and waiting for those who are bold enough to change - and keep on doing so.
