CRU: Best practices to win the race of category performance
DALLAS — Convenience stores average 160 million transactions a day (that’s more than half the U.S. population), and 60% of non-alcoholic purchases are consumed within 10 minutes and 80% are consumed within an hour.
Michael Davis, NACS vice president of member services, and Casey McKenzie, senior principle consultant at Impact 21 Group, share these and other facts during their breakout session at Convenience Retailing University(CRU) in Dallas.
“We’re going to talk about horsepower,” said Davis. “You need a lot of horsepower to compete and win at your stores.”
It’s no simple task for category managers. With so much going on, McKenzie said it’s easy to neglect the basics: the three W’s of who’s driving category management, what resources are invested in category management and when is the process employed and measured.
In terms of “who,” it’s not just about category managers.
“Category manager is a role, category management is a process: it’s not one in the same,” McKenzie said. “You’re very limiting when you say that only category managers are responsible for category management.”
McKenzie added that this sentiment is true regardless of a retailers’ size.
“Now it might be vested in one person–you may have a category manager,” he said, “but it should be a shared philosophy, process and responsibility across the organization.”
Not every team member needs to live category management the way category managers do, but everyone should at least understand the company’s category management philosophy. Category managers should be able to communicate with the marketing person and with the ops person about why category management is important, as well as be able to listen to them and get their advice and their input.
“It needs to be an organizational way of thinking,” said McKenzie. “For our organization to be truly successful at category management, we all have to think that way, from the president of the company down to the cashier.”
McKenzie likened the second W, the “what,” to driver’s ed. Teenager’s aren’t just handed a driver’s license on their 16th birthday: they take lessons, practice and have to pass a driving test.
“It should be same for category managers,” McKenzie said. “Category manager is not just a title: you need the training, the skills and to update that training.”
That training, according to McKenzie, should be formal, continuous and applicable and beneficial to a category manager’s specific situation. After all, a category management position has many different responsibilities, from planning and analysis to supplier and product management to financial accountability. Depending on the individual, different category managers might be better at different areas.
“It’s really about doing a self-assessment on yourself as a category manager to recognize what areas you need to work on,” McKenzie said.
Category management is also about having consistent measurements of how you are doing as a category manager–the third W, the “when.” Continuing with the car theme, McKenzie described this evaluation process as “scheduled maintenance.”
“You need to have maintenance for your category management process, just like you would for your automobile,” he said. “And these tuneups need to be scheduled consistent and actionable.”
Consistency in these evaluations is key. How does a company identify success in category management and do those metrics remain the same?
“Those metrics can’t be changed every month or every quarter,” said McKenzie.
“You want to measure things that are actionable,” he continued. “You don’t want to measure just to measure. I tell people to concentrate on the top two or three metrics. They’ll help you find success in your category.”