Category management pools all items carried by a sales division into so-called categories which are tuned to customer needs. The idea is to increase customer loyalty and consequently boost revenues and earnings. 
Management Summary Category Management (CM)
METRO Group uses category management to create customer-friendly and sales driven product ranges: the trading group pools items to create categories which reflect customer’s needs. This helps customers to find their way around by finding product groups such as "Everything for Kids" or "Everything for a Barbecue" displayed in a special part of the store. Sales divisions use category management to reinforce their profile, increase customer loyalty and boost turnover.
What is Category Management?
Category management is a joint planning process between manufacturers and trading companies. The objective is to define the categories and to position and display them perfectly. METRO Group’s category manager collaborates closely with the category partner on the manufacturer side and communicates with the group’s purchasing and sales departments. The involved parties depend on a wealth of data. They fall back on internal information as well as market research studies, such as consumer and retail panels.
What is the Role of a Category?
Every Category has one of four roles: the destination role, the preferred role, convenience role and the occasional/seasonal role. Profile categories are tailored to the needs of the core target group of a sales division. The trading company uses this role to make its mark in a specific market segment and set itself apart from competitors. The preferred role is dedicated to daily staples such as basic foodstuffs in a grocery store. They account for the largest part of the product range. Supplementary items add some spice but are not part of the core business such as plants being sold in a supermarket. METRO Group only includes seasonal categories for a limited time, such as special candy for Christmas and Easter.
What are the Advantages of Category Management?
Category management is used to pool and manage large volumes of goods. Confusing product ranges are a thing of the past. Customers can find items in one spot which they understand to be related. Driving customer focus and providing a perfectly structured goods range helps the trading company to set itself apart. Deploying the CMplus software safeguards efficient cooperation between the category manager and his/her partners.
What is the Approach Category Managers Take?
Category management is a process which is broken down into eight steps. Category managers initially define target groups and pools different products to categories. Categories are then matched to their roles. This is followed by checking and analyzing the potentials of every category. The category management team then defines objectives, strategies and measures. The last step is to ensure everything is implemented in the stores and monitor success. A so-called category management scorecard is included in the CMplus software. This application highlights all relevant business related metrics at a glance and simplifies the evaluation processes.
How does METRO Group use Category Management?
Category management has been established in METRO Group’s sales lines Real and Metro Cash & Carry. METRO Group uses the software CMplus to ensure that category management works efficiently. The software is available to all parties via the Internet and pools, analyses and structures all data and derives recommendations about the compilation of the product range. The category management scorecard feature included in the CMplus software provides actual/target comparisons. In the future all category managers and category partners are to be able to jointly plan promotions with this software. METRO Group also realized a link between CMplus and Spaceman, which is a software for shelf management.
