How to Become America’s Favorite Grocery Retailer: Category Assortment
The Market Force report on America’s Favorite Grocery Retailer is about to be published and we’ve been looking what, exactly, you have to do to become America’s Favorite Grocery Retailer. Trader Joe’s won for several years running. Last year Wegmans won, out of the blue. But the bottom line seems to be, it’s all about customer experience. Stores have to be able to compete with the convenience of home delivery, and customer-centric fun and selection of a Wegmans. We’ve looked at Community and Customer Service, Innovation, and now we’re going to see what role Category Management plays.
Creating a Win-Win
First, it’s important to note that category management is not just the retailer’s responsibility. In fact, Retail Leader magazine gives its category management award to teams of one CPG company and one retailer. Unless they work together, they’ll both be fighting against the customer. They have to strategize which products are likely to compete best in which stores and be willing to negotiate for the best product mix for the customer. This of course, turns out to be the best product mix for the partners, too. They also have to collect and share data. A lot of data. That’s what makes the partnership work in the real world as well as on paper.
Traditional category management focused on making the arrangement super easy for the grocery store or CPG company and super laborious for the shopper. Stores offer products—not solutions. One store that breaks the mold is HEB. If you go to the HEB grocery in the affluent Westlake area of Austin, Texas, it will be a very different experience than if you visit the one on Oltorf St. in the center of the city, and both will have different items than the one closest to the University of Texas. They’re only a few miles apart, but HEB gives individual stores an unusual amount of autonomy around catering to the needs of their individual communities. Of course, this creates a lot more work than just buying products for “Austin” stores and distributing them. But it means that when you go in your neighborhood HEB it feels like your neighborhood HEB; it will have products that other HEBs won’t have. That creates loyalty.
But beyond that, HEB groups products together to create solutions, the HEB Meal Deal offers an entire meal from various CPG companies into one package—an entire enchilada dinner, with salad, for example.
One of the reasons Trader Joe’s won so many years in a row is because it offers interesting options: food from around the world and around the region you might not find anywhere else. Seeing “what’s there this week?” is a little like taking a voyage. It also offers lots of healthy and organic options at prices regular people can afford. Trader Joe’s category management makes it an adventure.
Latest posts by Seth Nagle (see all)
Comments are closed.