Every year, the retail landscape looks a little different. Next year, what format will appeal to what market? Should retailers care about international expansion? Or should they make the most of their home market? As store saturation becomes a reality and early movers produce tangible results, retailers need to address this sizable opportunity—quickly. Retailers have difficulty assessing the product sales performance, considering a competitive mix and hitting revenue and profitability targets. Category Management presents an opportunity to gain competitive advantage by implementing technology with the ability to increase the understanding and optimization of assortments, including product assortment performance at different store segments as well as monitoring assortment performance. A key benefit to the adoption of any formal category management process is that retailers must explicitly define the role that each category plays in the overall store portfolio. Being clear about category roles: be it traffic builder, transaction builder, cash generator, profit contributor, image or excitement creator, it leads to a disciplined approach to space management, everyday pricing policy, and promotion tactics. Category management also requires the retailer to define roles for their store brands, both at the chain level and within any specific category. In essence this process involves management of a category like an independent profit centre in all respects of sourcing, pricing and buying to selling to deliver customer satisfaction and strategic advantage to the store. A category manager may have separate team members to handle product management, buying and merchandising. Such a retailer is able to successfully differentiate its merchandise based on its consumer’s needs and wants. And such a retailer is one who is bound to succeed in today’s competitive retail environment.
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