Knowledge Bank Blog, Category Strategy

Category Strategy: 4 Things to Think About – No. 3

Everything is sold in the same way

This is the third in a series of four articles (and accompanying videos), highlighting key issues and opportunities for Category Strategy.

Here’s our third issue.  Have you noticed how, when you look down a supermarket aisle, you will often see everything being sold in the same way? We see it all the time. There might, for instance, be a premium and a value bay, a healthy bay and an indulgent bay.  To us, industry insiders, we can perhaps decode it, but to the passing shopper, it just looks like a long row of products.

One reason is that Category Strategies are often not clear enough about what the sub categories are, and what needs to be done in each of them.  There isn’t enough clear thinking “bay by bay”.  They need better sub category strategy, to allow prioritisation of resource.  Not trying to do everything everywhere, but doing the right things in the right bays.

So how can you go about establishing a clear sub category strategy?

First, decide on how to sub-categorise. Be pragmatic.  Look for a sub-categorisation that shoppers could easily recognise or quickly learn their way around – the more intuitive the better.  Look for a sub-categorisation that helps the Retailer and Supplier encourage profitable shopper behaviour.  The key may be usage occasion (lunch vs breakfast), consumer type (child vs adult) or price (standard vs premium).  Often we find the easiest for shoppers is simply product type (e.g. craft beer, standard lager, stronger lager, bitter).  Don’t agonise over it or over-analyse.  Keep it simple.

Second, be clear about the strategy and tactics for each subcategory.  Often we see Established sub categories, delivering lots of volume, at a lower price per occasion, in gradual decline – for example, in biscuits, packets of Digestives and Rich Tea.  Then Emerging sub categories in growth, with a higher price per occasion – Healthier biscuits, Breakfast biscuits and new Premium offerings.  The right answer is almost never to let Established sub categories drop like a stone. More likely, it is to manage their decline or even hold volume.  Tactics may be about efficient range, the right space for big sellers, being super easy to shop, and driving volume with promotions.  For Emerging sub categories, the goal is often to drive Category growth and spend per visit.  Tactics may focus on maximising the allure of the bay, trial driving mechanics, and giving the shopper the right information to make a choice.  So you have very different strategies for different bays.

Finally, you need to think about delineation of sub categories at the point of purchase.  Setting out the aisle so that is it clear to shoppers what different bays are for, and how they can help.  Not just adopting a common-sense layout – but signalling it loud and clear.  The shopper who came in to buy “healthier” finds her eye is caught by “sharing bags”. She remembers she has friends coming on Friday, so she buys an extra item.  By clearly signalling what the different bays are for, you give more reasons or occasions for which to buy.  If companies were to put even half the effort into the signalling, that they put into deciding what is the right layout, they would see huge benefit.

So if you want to avoid everything in your aisle being sold in the same way, you need better, clearer sub category strategy.  Decide on a pragmatic way to sub categorise, be clear about the strategy and tactics for each sub category and then clearly delineate at the point of purchase.  Don’t try and do everything everywhere – focus effort on the right things in the right bays.

Next week, our fourth issue.  Too often, well thought out Category Strategies fail to get sufficient cut-through with decision makers.