Thursday, May 07, 2015

Category Management: Questionning the Concept of Category Captain

Category management has been existing for over 20 years, and based on a strong relationship between one retailer and suppliers in order to respond the best at customers demand. Obviously, this concept has been very successful. It allowed both retailers and suppliers to question themselves on the way they conduct business, while improving the shopping experience and therefore the added value to customers.

The category captain has been one of the pillar of the category management concept: The retail picks one supplier, based on its expertise, its vision of the category, its market share to work hand in hand in the definition of the key component of the category: The concept, the merchandizing, the product range...

Here is an excellent article that is questionning this category captain concept. The key issue highlighted is the fact that category management is not dealing with customers at all. It is a partner between to business entities trying to boost their respective sales. 

One threat to retailers is that, in delegating category management to manufacturers, store operators may, from lack of use, lose their ability to analyze their customers’ needs and adjust product mixes accordingly. Another risk is that, over the long term, prices might increase and selection decrease as captains achieve “effective monopolization.” In the not-too-distant future, Kurtulus predicts, we might see exclusive arrangements in certain categories; one retail giant, for example, might sell only Coke products, while another offers only Pepsi.

Indeed, let's not forget that in category management, a category captain, as good as it may be, is still interested in selling its products.Hence, he may not be as objective as it may appear. 

Category management must still be mastered by retailers, even though obviously retailers may be a great source of knowledge. But part of my experience, it is true that the category captain concept has gone in limbo.