Key Role of Category Market Intelligence in the Retail Industry
The retail industry has witnessed a major shift in consumer needs and demands, market dynamics, and standards, which has led to the rising need for novel and innovative approaches to understanding the market, strategizing, and staying ahead of the curve. Category market intelligence and category management have become a highly prevalent method of segmenting and approaching spend, planning, procurement, sourcing, and production. With this strategic approach, companies can efficiently tackle various risks, minimize challenges, track expenses, and improve performance substantially. In the retail industry, utilizing category management can help companies significantly reduce risks, improve spend management, and propel growth within the company while minimizing errors and increase inter-departmental congruence. Categories are determined by segmenting products and services as per particular common criteria, such as size, type, pricing, or function. Category market intelligence provides companies with crucial insights into each category and enables better data-driven strategies and approaches to sourcing, spend management, marketing, and production. The role of category market intelligence is often overlooked; however, companies have become increasingly aware of the benefits in recent years, and its importance must be widely understood by category managers and CPOs to capitalize on the benefits.
Importance of Category Market Intelligence today
Data-Driven Decision-Making: The use of data, analytics, and real-time information is rarely given the importance required, and as the retail industry grows, the need for these tools becomes increasingly evident, particularly in the process of decision-making and strategizing. Making the right decisions for a business requires a comprehensive understanding of the market, potential factors affecting the industry, risks and challenges, and other major influencing dynamics. Category market intelligence provides companies with this and other relevant information pertaining to each category, and enables well-informed decision-making for each category, consequently improving overall decision-making within procurement and sourcing. This data also helps category managers keep abreast of their evolving categories, and ensure they stay ahead of the curve at all times.
Improved Relationship Management: As companies expand, their supplier and vendor relationships become increasingly crucial, and evolving markets highlight this importance repeatedly. A robust business relationship can lead to reduced costs, improved efficiency, sustainable growth, and unencumbered growth. Utilizing data from category market intelligence can help companies identify the ideal partners and best-fit suppliers for their future endeavors in each category. By identifying and partnering with suppliers utilizing a data-driven approach, companies can ensure transparency and clarity regarding expectations, standards, and targets. This approach can also enable and encourage crucial data exchanges, and provide both parties with the information required for constant improvement.
Strategic Support: Developing the well-informed and effective strategies can provide companies with an unparalleled competitive advantage, and boost performance significantly. However, developing and maintaining robust strategies and plans is a long-term, interlinked process, that requires managers and teams in various departments to work together. Category managers can work closely with CPOs and supply chain managers to develop robust strategic sourcing, procurement, and supply chain strategies that support and encourage growth across the company. Category market intelligence provides managers, teams, and other crucial departments with relevant information regarding a particular important facet of their business, and enable collaborative strategizing and growth.
Better Performance: In a competitive market, staying ahead of the curve is highly dependent on developing the right strategies, tracking and managing spend well, developing and fostering strong partnerships, and delivering differentiated products and services. More importantly, to gain a competitive advantage companies must maintain a high standard of performance, and consistently work to better it. Improving performance requires robust strategies, data-driven changes, and an understanding of industry standards and consumer expectations. With the information procured from category market intelligence, companies can identify, target, and improve any shortcomings, and continually find and implement necessary changes for better performance.
Spend Management: In any industry the importance of sales, market share, and competitive position in the market can be surpassed by the need for efficient, accurate, and real-time spend management. As companies expand, their expenses change, costs increase, investments change, and stakeholders add further pressure for change and growth. Spend management can help companies accurately track, assess, and evaluate all expenses, savings, and costs, while identifying inaccuracies, shortcomings, or potential for fraud. Additionally, it involved developing and implementing robust strategies to reduce costs and increase savings. Category market intelligence helps category managers to efficiently identify and understand costs, and procure essential data required to develop strategies and improve spend management.
As the retail industry continues to grow, companies are overwhelmed by the need for increased efficiency, improved spend management, segmentation of the market, and a sustainable approach to long-term success. While robust partnerships and data-driven spend management makes these requirements increasingly accessible, companies are struggling to understand the market and approach strategizing and procurement efficiently. Facing a similar challenge, a renowned retailer in North America witnessed a decline in efficiency and performance, and struggled to manage expenses, which led to major losses financially and in market share. To assess their shortcomings and understand how they can improve operations, the company approached SpendEdge, and our experts identified a lack of well-determined categories, and advised the introduction of category market intelligence. By working closely with the CPO, category managers and supply chain managers, our experts helped the company adopt a more efficient and data-driven approach to categorization, and encouraged the implementation of data analysis at every step. The experts’ recommendations helped the company identify their shortcomings, and leverage data to establish sustainable strategies for category management, higher efficiency, improved performance, and better spend management.