Does Shopper Marketing Mean The End Of Category Management?

Category Management 8 Step ProcessWhilst researching and writing, “The Shopper Marketing Revolution” which I wrote with Mike Anthony, I got the opportunity to speak with and get to know Dr. Brian Harris. Back in 1989, Brian effectively ‘invented’ Category Management by publishing an 8-step process which has guided collaboration between retailers and consumer goods companies for the last 23 years.

I asked Brian what the advent of Shopper Marketing meant for Category Management and his response was interesting. Brian sees Shopper Marketing as the latest evolutionary step of retail marketing, which began in the 70’s with product scanning and has passed through category management, ECR and into collaborative CRM.

In our book we take a different view. We make the case that shopper marketing creates a revolution in consumer goods marketing in general. We believe that the traditional core of consumer goods marketing; the idea that brands succeed by creating massive awareness and converting this awareness through massive distribution; cannot survive in a world of democratic media and dynamic retail structures. We advocate that by expanding the focus of marketing to drive the creation of different consumption behaviors by changing purchase behaviors, marketing becomes more complete and more effective.

So is category management dead then?

Well Brian accepts that the collaborative process he originally created is perhaps a little unwieldy today but he asserts that as a core retail practice category management will continue into the future. We agree; retailers cannot and should not put aside the imperative to grow category sales and we believe shopper marketing enables suppliers to work better with retailers by sharing a common understanding of shopper behavior.

This doesn’t mean that shopper marketing is a “big retail thing” nor does it mean that we advocate “doing category management”. Far from it, but we think many practitioners risk getting hung up as the confuse shopper marketing with category management and this does need clearing up.

First things first, let’s be clear that shoppers shop everywhere and not just in organized supermarket chains. If you really want to create a complete picture of how best to market your brands to consumers and shoppers you have to consider all the environments people shop in from small independent retailers, c2c portals, e-commerce sites and hypermarkets, to name but a few. Category management by contrast is only fully applied by a small group of very well organized (generally grocery) retailers.

Further, category management is a choice, not a business imperative, for most manufacturers. This choice has some significant advantages but comes at a stiff price to. Category management can be an extremely effective way of securing retail implementation from retailers who have a synchronous shopper profile with a brand, but the category management process can be costly and if the chosen retail partner is not effective at implementation this cost can be wasted. Shopper marketing helps make this choice work more effectively.

Companies who want to work really well with their customers using category management today have to start with a clear understanding of which consumers they are targeting and what they want them to do. Knowing this enables them to target shoppers and shopper behavior more clearly and helps define which channels they should prioritize. This makes selecting a retail partner easier and further creates clarity of the outcomes that will work best in retail environments.

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18 thoughts on “Does Shopper Marketing Mean The End Of Category Management?

  1. In my opinion, Category management [CM] focuses on the collaboration process across differences departments such as supply chain, finance, operation .,etc. CM aims to synchronize process and KPIs. Whereas, shopper marketing aims to understand shopper behaviors and be valuable or measured by sales and marketing or downstream of value chain only, and being ignored by upstream such as supply chain , finance, or operation. it needs CM as a mean to bridge downstream and upstream to sync and work together.

    • Hi Pornnapa,

      I’d be interested to understand if you see category management as a function or as a process? In my blog I have focused on category management as a process for collaboration between retailer and supplier. As such the interface it creates enables supplier supply chain, finance, sales and marketing teams to work with their counterparts in similar retail functions. In this context category management’s impact, whilst felt throughout the organisation can only be focused on specific retailers and is therefore limited to the business done with those retailers. By contrast I would argue that understanding shopper behavior and influencing this to drive consumption of a brand is key strategic imperative for the modern consumer goods company which drives change throughout the entire value chain. What do you think?

      Toby

  2. Pingback: Does Shopper Marketing Mean the End of Category Management? | POPAI

    • Thanks for this, however our article doesn’t suggest the end of Category Management. Shopper Marketing enables and enhances the Category Management approach whilst helping manufacturers improve their offer in a wide range of retail environments where the Category Management process is difficult to apply.

  3. I know as a fact from experience that shopper marketing and category management are to complete different things and one does not kill the other. As you gracefully point out, category managment is a retailer-supplier strategy driven by sales trends. Shopper marketing mixes the emotional component into the equation as on waht really drives the consumer (shopper) purchase on the different retail outlets, whateveter their nature. At modern trade chanels (grocery stores) category managment should complement the shopper marketing initiatives. This strtegy pairing is almost or non existent in Traditional trade channels tipical in Latin americna countries where small Mom and Pops still account for 80%+ of the FMG sales.

    Gongrats on the interesting article.

    • Carlos, Thanks for an insightful comment – we are in full agreement! It would be great to hear from you how shopper marketing solutions are being applied in the independent trade in Latin America, as they are here in Asia.

      Best Toby

  4. I think CM killed creativity. The focus and drive for efficiencies meant a too linear process. SM allows creativity and innovation focus which results in more growth and behavioural change than CM could achieve. Ultimately CM was a ‘process’ while SM is a behavioural science

    • Thanks Ken and sorry for my slow feedback to all! I agree with the concept of CM being a process, particularly a collaborative process between retailer and manufacturer. Whether the process itself kills creativity or whether the managers that operate do that is an interesting point of debate, but its certainly true that many players have been disappointed by the outcomes of category management. I wholeheartedly agree that SM, like consumer marketing, has a huge component of behavioral science and a significant requirement for creativity.

  5. Interesting article and good comments all! I believe that Shopper Marketing is yet another evolutionary step in a more effective and efficient way to grow value from the shopping experience for retailer, supplier & shoppers alike. Where traditional category management disciplines provide an all important statistical elements, shopper marketing adds a behavioural lens – combining the two delivers a greater impact than each in isolation – the veritable mix of art & science if you will, delivering more insightful strategies, more effective activity & more valuable outcomes. What do you think?

  6. Pingback: Shopper Marketing Revolution or Evolution | Shopper Marketing

  7. Pingback: Does Shopper Marketing Mean The End Of Category Management?

  8. Hi Carlos, thanks for the insight. There’s some confusion in the comments about shopper marketing Vs. category management but really they run alongside each other and can strengthen each other as I think you suggest. Be great to see a case study?

  9. Hi,

    The thrust of the argument here is that Shopper Marketing is a strategic process which enables brands to define which shoppers to target, which channels to prioritize and which marketing mix to apply to secure results. Category management (by which I mean the joint working process between a specific retailer and a manufacturer to define category growth strategies, activities and measures which they will mutually employ to drive sales) is greatly enabled by solid shopper marketing strategies. However category management should be seen as a vehicle to implement these strategies, not as a parallel process, but as a successive one.

    Best Toby

  10. Pingback: Shopper Marketing Revolution or Evolution? - Toby Desforges

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