The assumption is that suppliers know better their customers, as they have more market studies, master the product innovation program, and have also data from other retail channels that one retail could benefit from.
Nevertheless, letting a supplier leading your strategy could be obviously biased. Indeed, it is pretty rare to have a supplier that is actually leading a complete category. And even if that it is true, its advice will be most of the time biaised and probably not aligned with customers' needs.
Let's take a clear example: The Baby section. An interesting section I had the opportunity to work in store. Prior to category management, you would have the different components of the category spreaded around the store:
- Diapers with paper products such as paper towels, pads...
- Baby food in the cans section
- baby care with the pharmaceutical one
- Car seats and furniture in another aisle.
Let's imagine you need to pick one category leader in the baby section, you obviously will take one of the leader of one of the main categories: food or diapers. But how could a diaper producer will know about feeding a baby. Obviously you know I am talking about Procter & Gamble. But they don't own any baby food brands. Neither do Nestlé's know about baby care.
In order to know how to set up the category, and have the most accurate customer response, that requires not to have a captain leader. And I believe more and more retailers are getting back their category strategies, in order to have a comprehensive category strategy, taking care of customers' need prior anything.