Small business beating the barriers of FMCG category management
One of the core challenges in category management is simply the way the term has been interpreted operationally.
Let me explain.
Category management is a data intensive game, the numbers count for everything, and the depth that can be plumbed nowadays with the combination of scan data, loyalty cards and increasingly social data is astonishing.
However, this can lead to a sort of blindness.
If it is not in the data, by definition it does not exist.
Right?
Wrong.
Think about where all the great innovations have come from.
“Left field” is the usual term. Few genuine innovations have come from the established orthodoxy of any category, they involve things that currently do not exist or exist in another, unconnected category in a different form.
The disciplines of Category Management, weather we like it or not tend to eliminate these outliers, thus limiting category innovation.
Not the desired outcome.
The challenge of running the data intensive margin maximisation regime by leveraging existing category variables while minimising risk stifles true innovation while encouraging range extension behaviour.
Innovation by its nature is both risky and outside the accepted parameters of category consideration. Successful innovation requires both leadership and wisdom to be displayed before a guernesy is given for the investment required to get a new SKU on shelf, even if it is a replacement for a tired item.
Neither management quality is in great supply.
It is in this space that SME’s can build a competitive position against their larger competitors who may have the advantage of scale as well as category captain status, but are failing to be genuinely innovative. By building a history of innovation in outlier and niche retailers, independents, and direct to customers, smaller suppliers can build the “attraction quotient” with the supermarkets, and have the chance to retain some control.
Become successful in those outliers and the mass retailers will follow, that is their nature, they are followers.
Somehow you have to find a way to manage by both the data, and a product benefit /brand narrative that is entirely from the perspective of the consumer.
