Category Control

How to manage your in-store categories before they manage you

By 
Mitch Morrison, Vice President of Retailer Relations

Ieva Grimm Frank White John Zikias Kim James Convenience Retailing University CRU (CSP Daily News / Convenience Stores / Gas Stations)

Ieva Grimm (left), Frank White, John Zikias, Kim James

(Photo: W. Scott Mitchell)

DALLAS -- "Look at your categories as distinct business units," advised Ieva Grimm, the former Sheetz Inc. veteran and now owner and president of Sigma Development Co.

At CSP's Convenience Retailing University (CRU) in Dallas, Grimm moderated Thursday's session called Category Management: The Cornerstone of Customer Satisfaction. Joining her were three respected convenience store experts: Kim James, brand marketing director at Alimentation Couche-Tard Inc., Laval, Quebec; John Zikias, COO at Holmes Oil Co., Chapel Hill, N.C.; and Frank White, retail operations director at Tri-State Petroleum, Wheeling, W.Va..

From new products to category appraisals, the panel delved into the challenges and key questions to ask.

New Products: When to Pull, When to Grow

"Be quick but don't hurry," said Zikias. "I don't want to move too quickly. You need to give two to three months to let it sink in with the consumer. If you move too fast [in pulling a new product out] you're going to create consumer confusion.

Zikias offers a structured approach to assessing a new SKU's performance:

  • First month: Review internal handling of a new product. Is it properly stocked and merchandised? Are store employees educated on the product? Are promotions in place and being executed?
  • Second month: If the product still is lagging, examine its impact on the broader category. Is the product undercutting its subcategory? Is it stealing from other items in the same segment?
  • Third month. If the product still isn't moving, it's likely time to pull it from your store set.

Retailer-Vendor Relation: Working With Each Other's Data Points

All three retailers said they seek out vendor information for broader trends, while relying on their own internal transactional information for in-store performance.

"I like to know from the vendor what's going on in the marketplace that's not me," said White. "What are your upcoming plans?"

James said she provides vendors with a benchmark template in order to cultivate consistent information. The criteria includes timeframes, unit sales and total dollars. "You have to understand what you're looking at … what is the story telling me?"

Zikias said, "I also ask what's selling in other channels of trade. … I want to know about emerging products."

Category Analysis Versus Paralysis

The retailers offered several tips:

  • Focus on the customer ahead of the vendor. "What really matters the most is the consumer," said Zikias. "I make sure we're calling the shots," added White. "It's about the consumer, not just what your data says."
  • Plan a strategy for the category, implement the plan and measure it. And, said White, "do it again and again." Plan, execute, measure.
  • James said she solicits fresh ideas and approaches from vendors. "Set some scorecards, some expectations," she said. "Measure things again and again and again."

The panel cautioned operators not to suffer from "analysis paralysis."

"You can drill down to know everything all the time," Zikias said. "But [by] then, the world has passed you by."

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