Category Management

In 2018, one of my colleagues who was a key global talent on secondment to the UK accompanied me to visit our buying team in Sainsburys. He was keen to sell-in one of our brands which had been struggling against the market leader.

Sainsburys were leading the market in terms of category growth. He took them through a couple of slides to make the case for them to list a variant. They weren’t convinced. He was expecting the objection, so he jumped straight to the appendix to show them data of how the brand was performing so well in the market.

 “You are missing out on an opportunity with this brand. You aren’t giving it a fair chance”, he said.

My head of buying barely blinked. Without a hint of emotion, he replied:

“We don’t care about brands, we care about categories”.

The Philosophy of UK Trade

That sentence sums up the entire philosophy of the UK trade, which is arguably the most developed in the world. They look at everything from a category and shopper lens. As long as their categories are growing ahead of their competitors’, they don’t see a need to make change. Even how much money they are making is secondary to this because they know in the longer term only the shopper centric retailer wins.

That is why the key to winning in the market is this discipline of category management.

What Category Management is (not)

To understand category management, it is useful to apply Charlie Munger’s inversion method. What is NOT category management.

·       It is not about brands stealing share from each other.

·       It is not a tactical or short term approach.

·       It is not decision making about categories in the absence of data and insights.

·       It is not about investment and commercials.

·       It is not siloed decision making, devoid of collaboration between and within manufacturers and retailers.

·       It is not a one size fits all approach regardless of channels, retailers and formats.

The role of Data in Category Management

Category Management is first and foremost centred around analysing data related to transactions, shopper demographics & their attitudes. The most important of these are the behavioural or transaction data with metrics like:

·       sales value,

·       volume,

·       number of shoppers,

·       transactions,

·       average selling price,

·       average basket size,

·       number of products purchased etc.

Retailer priorities can shift from time to time but some metrics such sales value and volume would always be relevant, using them to compare growth over same periods previous year or recent periods this year. Data like this is generally acquired from retailers’ EPOS, or sourced from data aggregators like Nielsen and Kantar. Also important for Category Management is being shopper centric to build lasting relationships with them and delivering consistently positive experiences.

Applying Category Management in Emerging Markets

I often wonder whether, when I was in Pakistan working on modern trade, I could have used this approach. The retailers at that time were mainly concerned with commercial discussions and would do most things for your brand given the right investment. And the answer is yes. I think I could and it would have been valuable. I may not have got the reactions I wanted initially but it would have resonated with them over time. The only constraint was data back then. But now you can partner with a lot of retailers to obtain EPOS and that would be the bedrock for your category-based collaboration with them.

The Role of category managers

In Western markets, most manufacturers typically have a dedicated Category Management functions.

Category Managers have a unique status in the sense that while account managers are thought of as caring just for their brands, category managers are trusted by retailers for their neutrality. In fact even competition authorities informally assign a special status to category managers and their conversations with retailers. In most cases, category managers live up to this trust. One reason is that they know if the customer feels that they are actually not truly looking after the category interest, then their role becomes redundant. Ofcourse they wouldn’t actively advocate for anything that would completely wreak their own organization business. Where they are helpless against data, they would communicate through silence.

If the category manager is diligently adding value and truly trying to be as neutral as they can be, then the retailers are willing to do a bit for them as well. Afterall a great part of the relationship between a manufacturer and a retailer is about trading compromises.

Hence the game changer is how well can an account manager wear the category management hat. Use data and insights that would benefit the customer’s shoppers and grow category value. How they can help their customers win against other retailers. How well they collaborate internally and externally to make plans come live instore.

Why retailers value category management?

Because retailers have countless categories to drive, they cannot possibly possess expertise and knowledge and insights on all of them. The buyers in the UK have a range of suppliers and their businesses spanning across multiple categories each to look after. And I know that the buyers in Pakistan had even broader domains. It’s very difficult for them to coordinate hundreds of moving parts in a manner that optimizes their performance. This is where suppliers can help them with strategy, analysis and general cognition to be able to recommend the best decisions that are win-win for both retailers and suppliers.

A Lesson in trust: My experience

I once took over a key customer relationship where the buyer had been in the role for a long time. Their past interactions with my predecessor had made them skeptical of my proposals, assuming they weren’t in the best interest of the category—even when they were. This lack of trust made it difficult to influence decisions, while our competitors had a much stronger foothold.

Despite this challenge, I navigated the relationship by consistently wearing the category management hat in all my external conversations. Over time, this approach paid off.

As one of my line managers used to say:"Think of it as a language—talk in the category and shopper language, even when selling your brand or business."

That shift in mindset transforms credibility. When customers see you as a true partner focused on their category’s success, they become more open to collaboration—and new opportunities open up for both sides.