Category management helps businesses to drive and deliver growth, value, and innovation. But there are many companies that still struggle with the transition from strategic sourcing to effective category management. Effective category management not only helps in smooth business operations but also helps in enhancing strategic sourcing consistently. The process of category management analyzes risks, trends, and demands in any category. Furthermore, it incorporates a program of demand management to understand the demand structure of goods and services better and prioritize them accordingly. Such an approach helps businesses to ensure that there is less wastage of revenue. Advanced category management analytics can make this process even simpler. In this article, our analytics team has highlighted some of the key steps to advanced category management analytics that can help companies to drive their material improvements in both top line and gross margin. Also, advanced category management offers a comprehensive overview of the performance report, report on collaboration with suppliers, and the development of category managers.
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Steps to Establish Advanced Category Management
Step #1: Start Your Analysis with a Broader Perspective
Advanced category management analytics starts with the step of analyzing data with a broader perspective. This can help in an in-depth and tactical analysis of different categories by reviewing the trends at different levels of geography. For advanced category management analytics, you must consider the trends in the national market across key channels. Here are a few questions that you must ask in order to offer advanced category management analytics solutions:
- Who is growing and slumping?
- How does this vary from your channels and region?
- And how can a company benefit from these results?
Such insights can offer a better picture of opportunities that can be incorporated into your tactical analysis and recommendations.
Step #2: Drill Down Through Data for Actionable Insights
Category management analytics can offer desired results only when you drill down through the accumulated data to gain a broader perspective. You must consider the data of more than one time period to analyze the long and short-term trends. Also, you must gauge different segments of consumer based on the decision tree of consumers to offer more personalized solutions. An effective data visualization is important in order to understand different metrics of the gathered data.
Want to know more about the benefits of big data visualization? Read our latest success stories driven by data visualization here.
Step #3: Refer Multiple Sources for an Effective Category Analysis
Utilizing multiple data sources is one of the significant steps to advanced category management analytics. It is important that you analyze your point of sale data, data of consumer panel, data of consumer purchase behavior. To do so, you need to develop an ability to look across various data sources and incorporate derived insights from multiple sources for better decision making. Furthermore, it also helps in identifying market opportunities.
Step #4: Make your Data Meaningful
Category management analytics helps in finding relevant benchmarks to offer best services to customers. Therefore, for advanced category management analytics, it is crucial that you analyze your data and extract meaningful insights to establish benchmarks for identifying new market opportunities. Also, you can compare the data of your competitors with your own data sets to understand the value of your data in related categories.
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Step #5: Set Thresholds for Category Analysis
Thresholds can be applied to your category management analytics to gain a perspective on which business strategy is driving sales in different categories. Also, for advanced category management analytics, you can measure the efficiency of SKU by gauging the number of items added to each brand in a certain time period.