PHOENIX — General merchandise is seriously lagging other aspects of retail in category management, which is resulting in a loss of space, corporate inattention and declining sales, said Eric Togneri, principal, CPG CatNet, a trade association in Atlanta.
Speaking at a workshop during the GM Marketing Conference here this month of the Global Market Development Center, Colorado Springs, widely known as GMDC, Togneri said GM companies that do category management well are a rare exception.
“The general merchandise companies that embrace category management will dramatically differentiate themselves from their competitors, because very few among the general merchandise folks are doing it,” he told SN after the workshop.
Retailers value category management, and supermarket companies value it most of all, Togneri said. A study showed that 86% of grocery retailers said it was important, while an average of 82% across all channels said the same, he noted.
Retail is numbers-driven, and other categories, notably health and beauty care, do it better, he said. Given a choice, retail executives will select a product with a better number story as opposed to one that only has an item price sheet, like many GM products, he said.
GM is one of the largest parts of the business that isn't performing up to the standards of others in category management, Togneri said. But suppliers are going to have to “step up. I think retail management is going to drive a great deal of that, but also, it's the right thing to do,” he said.
Retailers interviewed at the conference said a lack of good, syndicated data for general merchandise categories is a big part of the problem in category management.
“There's a lot of category management that isn't done because ACNielsen and IRI don't track the data sufficiently,” said one Northeast food retailer. On the other hand, HBC categories are well tracked, he noted.
The retailer does its own category management for GM in-house, but that has limitations, he said. For example, if a competitor carries 10 can openers, it's very difficult to get direct data comparisons. “You have to make some assumptions on what the rest of the market is doing,” he said.
“A lot of times we do run into walls when it comes to category management,” said Lisa Matthews, GM category manager, the Penn Traffic Co., Syracuse, N.Y. Because of the lack of category management, general merchandise is often considered last after Center Store grocery categories, she said.
If more of the big players in GM would implement wide-ranging category management initiatives, it would benefit everyone, said Mike O'Shell, director of GM/HBC at Penn Traffic. “GM does seem to be lagging behind, while HBC, in my opinion, is in great shape with category management. GM is a just a little behind, but I think they are going to catch up, just out of the necessity of keeping up with the electronic age we are into now,” he said.