What are the steps to develop effective category strategies using shopper insights?

1 Define the category

The first step is to define the category and its scope. A category is a group of products that meet a similar shopper need or occasion. For example, the breakfast category may include cereals, breads, eggs, milk, juice, and coffee. You need to decide how broad or narrow your category is, based on your store format, assortment, and target market. You also need to identify the category role, which is the strategic importance and potential of the category for your store. For example, a category role can be traffic builder, destination, routine, or seasonal.

2 Analyze the category performance

The second step is to analyze the category performance and identify the key drivers and barriers of sales and profits. You need to use quantitative and qualitative data to measure and evaluate the category performance against your objectives and benchmarks. Quantitative data includes sales, margin, inventory, turnover, market share, and price. Qualitative data includes shopper feedback, satisfaction, loyalty, and perception. You also need to use shopper insights to understand the category trends, opportunities, and challenges. Shopper insights can help you answer questions such as: Who are your shoppers? What are their needs and motivations? How do they shop the category? When and where do they shop? What are their pain points and preferences?

3 Set the category objectives

The third step is to set the category objectives and prioritize the areas of improvement and growth. You need to use the SMART framework to define your category objectives. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Your category objectives should be aligned with your store goals and shopper needs. You also need to use shopper insights to identify the gaps and opportunities in the category. Shopper insights can help you answer questions such as: What are the unmet or emerging shopper needs? How can you increase shopper satisfaction and loyalty? How can you attract new or more frequent shoppers? How can you differentiate your category from competitors?

4 Develop the category tactics

The fourth step is to develop the category tactics and action plans to achieve your category objectives. You need to use the 4Ps framework to define your category tactics. The 4Ps stand for Product, Price, Place, and Promotion. Product refers to the assortment, range, and quality of products in the category. Price refers to the pricing strategy, policy, and execution of the category. Place refers to the merchandising, layout, and display of the category. Promotion refers to the marketing, communication, and incentives of the category. You also need to use shopper insights to optimize your category tactics. Shopper insights can help you answer questions such as: What are the best-selling or most profitable products in the category? How do shoppers perceive and compare your prices? How do shoppers navigate and interact with your category? How do shoppers respond to your promotions?

5 Implement the category plan

The fifth step is to implement the category plan and execute your category tactics. You need to use the PDCA cycle to manage your category plan. PDCA stands for Plan, Do, Check, and Act. Plan refers to the preparation and planning of your category tactics. Do refers to the implementation and execution of your category tactics. Check refers to the monitoring and evaluation of your category tactics. Act refers to the improvement and adjustment of your category tactics. You also need to use shopper insights to measure and improve your category plan. Shopper insights can help you answer questions such as: How effective are your category tactics in meeting your objectives? How satisfied are your shoppers with your category? How can you enhance your category performance and shopper experience?

6 Review the category results

The sixth and final step is to review the category results and assess the impact and outcomes of your category plan. You need to use the KPIs framework to review your category results. KPIs stand for Key Performance Indicators. KPIs are metrics that track and evaluate the success and progress of your category plan. You need to select the relevant and meaningful KPIs for your category objectives and tactics. You also need to use shopper insights to validate and refine your category results. Shopper insights can help you answer questions such as: How did your category plan affect your sales and profits? How did your category plan influence your shopper behavior and loyalty? How did your category plan compare to your competitors and benchmarks?

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?