In the Recent Times, there is a lot of Convergence seen in the non Food Retail World.
There have been a lot of changes off late in the way the businesses operate. Either they are brick and mortar or an online e-commerce platform. Brick and mortar businesses have been and still are the best way in which the businesses operate. But off late due to the power of internet, there has been a contiguous shift of customers who prefer using the online e-commerce platform for their shopping needs owing to a lot of factors like cost, delivery scheduling and so on.
For example, marketplaces and offline/ hybrid retailers have lived side by side for many years, these lines are becoming increasingly blurred. On the one hand, marketplaces want to be more than just that, and invest effort and money into “curated shopping” experiences, as recently seen in Amazon’s fashion push. On the other, retailers increasingly choose to operate a platform category strategy in order to increase offer breadth. While this will result in more traffic it will also bring an exponential growth in SKUs to manage.
The latter trend poses significant challenges to any retailer from the “old world” that tries to manage the increased number of products with the same organizational set-up, tools, and capabilities. In particular for non-food categories, retailers need to bring category management to a whole different level in order to remain competitive.
Challenge: Dramatic increase in number of SKU’s & resulting decision complexity.
With the absence of physical shelf space restrictions in e-commerce, retailers have dramatically broadened their assortment catalogues. In some instances, this is a deliberate long tail strategy in order to differentiate the offer.
The category manager of an online store is the owner of business within a business. The 5 functions of a category manager are
- Does the category manager impart tactical category promotions?
- Does the manager have authority to make their own decisions?
- Does the category manager have enough authority to develop a store?
- Does the CM understand or analyze the basic metrics of the customer?
- Does the CM use up to date analytical tools?
Hence the category management in the online e-commerce environment requires special skills and a lot of attention to detail and hence should need a very robust training methodology and systems.