Knowledge Bank Blog, Category Strategy

Destination Categories

In the early days of category management, we all talked a lot about category roles.  Was a category “Destination” – one reason to visit a store?  Was it “Core” – important to shoppers, offering a good range and price?  Or was it “Convenience” – something shoppers could pick up whilst at the store, but where they wouldn’t expect the world’s best range or price.

We now live in an age where the Big 4 Retailers are struggling to grow.  They desperately need to convince customers of reasons to visit their big stores and not just shop Online or in Convenience Stores.   So perhaps we should be dusting down the concept of Destination categories, and thinking again about what needs to be done, to make a category influence store visits.  It is not easy, but the payback is massive.  To the Retailer, of course.  But also to the Supplier.  Suppliers who help Retailers in the war for footfall, can expect to be treated more like a partner and less like a vendor.

So how can you go about making a Category truly “Destination”?  We think there are six principles to think about.

First, choose a Category that matters often to shoppers.  Morrisons’ glory years were built on the Market Street concept.  Fresh food really matters to shoppers, and really matters on most visits.  Get that right, and people will come more often.  Getting BBQ equipment right, for example, won’t drive visits as often.

Second, know your audience.  George at Asda was a brilliant range designed with a crystal clear understanding of that Retailer’s core customer.  It might not have been a draw for everyone, but it certainly was for the people Asda were after.

Third, do it properly.  M&S have owned, do own and will own Prepared Meals, because they have put huge effort and investment into innovation, quality and their supply base.  If you’re going to go for it, you might as well be bold.  Know your strengths and really maximise them.

Fourthly, make it look fantastic at the Point of Purchase.  The way Tesco display food in Harris and Hoole and Euphorium bakery radiates confident body language and food credibility.  Don’t expect busy shoppers to notice great products of their own accord.  Make sure the products stand out and get mouths watering.

Fifthly, borrow authority if you need it.  Aldi’s reputation as a place to go to for wine owes a lot to the way in which they have used expert recommendation and medals, to convince shoppers who may have initially had doubts.  Lidl use “social proof” to similar effect, letting customers do the recommendation for them.

Finally, invest for the long term.  Waitrose customers are convinced that they are the best supermarket for meat.  Why?  Because Waitrose have built a unique supply chain over many years, and have consistently delivered quality from it.  It has taken a lot of effort and cost to build, but conversely it would take a lot to lose that reputation now.

If you can deliver against a few of these six principles, you will have a category that is competitive.  Deliver on them all, and you will really be helping to fill the car park.

Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG companies.  He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.