How To Be an Effective E-Commerce Category Manager
Updated: Feb 4
The contemporary market has a tremendous inflow of products and services. The key to making the most out of these products is category management. It is the art of grouping substitutable products together. Your brand’s effectiveness improves manifolds if you have a category manager. This process, in return, helps you achieve the desired impact on both your customers and the stakeholders.
What is Category Management?
Category management is the concept that has taken the retail and supply industry by storm. As a category manager, you will have to group similar products. Each of these collections of related products forms a product category.
Thus the management of each of these categories is called category management. You can either categorize the products bought by the manufacturer or those sold by a retailer. This decision depends entirely on your needs.
Each of these categories is a separate business unit. Therefore they are associated with a target turnover. To meet the profitability designated to each category, a good relationship between the retailer and supplier is mandatory.
Roles of a category manager
As a category manager, your task is to maximize sales so that you can meet the financial targets of each category. Generally, there are subtle differences between the roles of category managers who are dealing with a supplier and a retailer.
Assortment: you need to finalize the product range, either for a store or a cluster. You also need to decide upon which products to add or eliminate from the range.
Floor planning: this step includes deciding on the store layout. In addition to this, you have to finalize the aisle spacing and the creation of hot spots.
Space allocation and management: you have to allocate shelf space to products to boost sales. Therefore, the top-performing products need to placed strategically.
Visual Merchandising: in category management, you can make use of planograms to display products appealingly before the customers. The most used concepts here are that of brand blocking and color blocking.
Price planning: you have to decide on the appropriate product range. It should be in a range to suit your target customer’s price needs.
Inventory handling: inventory planning can ensure ample stocks and avoid over-stocking of any product.
Promotions: you have to plan out and execute the marketing campaign for a product or category of products.
Six pointers to be an effective retail category manager
The art of category management demands a varied group of skills. At the same time, you need to have a command over both traditional and contemporary practices. By working on the following skills, you can improve your chances of striking a home run in category management.
1. Supplier Management
As a category manager, you need to ensure the unhindered flow of products or services. You should try to be in the loop with your suppliers now and then.
Alongside this, keeping a check on their industry certifications and financial sustainability is mandatory. This action keeps trouble with the authorities at bay. It is thus ensuring that they finish their work well within time.
Only when you keep supplier performance in check, you can deliver the end product efficiently. This action will add to the promise that comes with your job.
2. Commercial Expertise
With the knowledge of the ongoing industrial scenario, a category manager will find it easy to manage the suppliers. To start with you can learn about:
The legal team will be at your disposal in this case. But your job covers the idea of making sure that all these factors are duly covered. Furthermore, your job involves finalizing the deal, which includes other commercial factors and determinants like pricing.
Here, you have to manage two aspects of the project, namely the program and the stakeholders.
You have to work through projects whose stakeholders have varying degrees of expectations. In addition to this, you need to maneuver cross-functional working styles and diverse cultural backgrounds.
Another critical point is to keep in check the budget and the time allocated to your project. You can easily win over people by delivering over these crucial project manager skills.
4. Domain acumen
A category manager with the knowledge of the desired domain can work wonders. A category manager needs more than just a sourcing background. In addition to that, you need to possess a deeper understanding of your category.
To take your company’s procurements to the next level, you have to be thorough with each category. With this knowledge at your disposal, you get to add real-time value to your projects and products. When stakeholders and customers see your insight as foolproof, they tend to trust you easily.
5. Zero-based budgeting
Zero-based budgeting is an upcoming method of budgeting. To account for the budget for each new period, you need to justify the expenses.
In category management, managers across organizations have discussions with stakeholders. In these discussions, it is imperative to reason out or justify their budget needs.
This discussion is to ensure that instead of directly allocating budget, you look at what is the desired budget. This action further allows you to put your money in the right place. Consequently, you can make the most out of your investments.
6. Digital nativity
Technology and digitalization is one tool that you can exploit as a category manager. Consequently, it will be easier to establish a global presence for your brand.
Category analytics finds its use in the procurement process. With your digital campaign in place, your procurement approach and procedure become more efficient.
Skills you require
In category management, no skillset goes unused. The long list of skillsets has three broad categories.
1. Soft skills
Should be able to deliver results even under pressure
Management and analytical skills
Communication and negotiation skills
An eye for detail
2. Education skills
A bachelors degree in business, retail, management, sales, marketing or consumer science
An MBA in a field such as retail management or merchandising
Three years of FMCG experience specifically in merchandising or product purchasing
Knowledge of category management principles
Understanding of category management software
Knowledge of buying systems and processes
Being a Category Manager
When it comes to managing suppliers and retailers, your approach differs significantly.
By helping the supplier in the required domain, you can boost the performance of each category. By optimizing on factors like shelf space and placement of competitor products, you can make the most for your brand as a category manager.
But when it comes to suppliers, they merely have a suggestive role. The final decision depends on the suggestion of the retailers.
When you are working with retailers, your daily duties include:
Inventory management and
By working with the relevant people, you have to decide on the optimal price for a product. Next, you have to identify the products that you have to add or remove from a range of products. Finally, you have to identify and act on trends. These trends are decisive when it comes to product performance.
These trends require thorough data analytics. You can find tremendous amounts of data these days. Accordingly, you can implement the information obtained in relevant areas in category management. Data is most effective in pricing, product performance analysis, along with floor planning, and other merchandising operations.
Why do you need a category manager?
Your brand will witness a noticeable change when in the hands of an effective category manager. When your brand undergoes this process, you will be able to source better. You could get your value for money by constant optimization. A few of the advantages can be:
1. IMPROVED SUPPLIER PERFORMANCE: The category management plan bridges the gap between you and your suppliers. It establishes a single point of contact with your organization. It will take less time to adapt and then implement the plan. Subsequently, the strategic approach will ensure better coordination with the suppliers.
2. BETTER INTERNAL MANAGEMENT: You can rely upon your category manager for the ins and outs of a project altogether. He or she can gather requirements, finalize bids, and even close contracts. This surety allows you to focus on other aspects of your business.
3. IMPROVED TRACK OF EXPENDITURE: when you implement a categorizing plan, you will be able to keep track of your spending. A comprehensive list of suppliers and their expenses will, therefore, help you identify the areas for optimizing.
Who would do well as a category manager?
Category management is a field where pressure is evident. This job is an ideal profile for someone who is driven by pressure and enjoys challenges.
Secondly, your communication skills will help you deal with suppliers and retailers alike. Your confidence will be a driving force because you will have to deal with many people, both suppliers and retailers included. In the same way, an ample amount of persuasion will be required to close deals. Further, some knowledge of emotional intelligence can ease your work.
Lastly, a good sense of management and analytical skills will help you plan your projects properly. All these skills will come together to have the right effect on customers and stakeholders.
Datahut is here to help!
Datahut extracts data from various e-commerce sources to help category managers make the most available product information. Our services range from product comparison to scraping product reviews.
Are you a category manager looking to leverage web data for your organization? Give Datahut a try.