
Unlocking brands through category growth
Top performers are transforming their growth strategies. They excel at ‘category’ using this to navigate the path to sustained growth, successfully reduce complexity and as the context for aligned engagement with internal and external stakeholders. At Quantic we believe that category is a powerful catalyst for supplier and customer responsible growth.
Captivate, connect, collaborate
In a world where everything is changing, some things remain constant. The consumer and shopper remain at the core of a winning business. But both are changing. Shifts in consumers and consumption behaviour is creating continuous challenges for all types of retailer and suppliers.
In our experience these continuous shifts create opportunities. Following and anticipating consumer behaviour to reset the market (where to play), models and mechanics of execution (how to win) is at the heart of our category offer.
‘Category’ has different interpretations. At Quantic we split ‘category’ into three ‘solutions’:
- category growth strategies
- category based selling
- category management.
All three interpretations of category are entirely valid. Category management can exist totally independently of a category growth strategy.
The over-arching context provided by a full category growth strategy provides the greatest internal ‘connections’ against which to align an organisation and gains greatest credibility externally with customers.
Total shareholder value delivered over five years by organisations with a focused category strategy vs. 12.8% for those with a diversified brand led portfolio. (Bain)
Categories need to constantly evolve to stay relevant.
Adopting a category based selling approach will allow you to better meet the needs of consumers and shoppers, showing customers how to secure their spend. Customers favour category focused suppliers who deliver a four times win (consumer, shopper, customer, supplier).
Put the excesses of what you have to good use.
Suppliers and customers are overwhelmed with data but category is a way to use what’s available, reframe what’s needed and eliminate the surplus. Retailers place greatest value on the data they generate, own and use as a revenue stream so it should be incorporated through all three category solutions.
Come together around a consumer and shopper-based strategy.
Great category strategy has immediate impact. It’s intuitive to understand because it’s relatable and that unleashes the potential of teams, accelerating every action they take.
Unlike brands, category is a shared interest.
Customers are more likely to work with suppliers who take time to understand their business, their shoppers and how they are performing within their category. If you show them a way to build their category, growth or profit, based on fact and insight you create mutual competitive advantage.
Category efficiency is a powerful commercial currency.
Category management done well goes beyond revenue benefits. Working in collaboration with a supplier, a food and beverage distributor raised margins by 10% while reducing inefficient SKUs by 50%.
An improvement in category portfolio that reduces cost of goods by 1% raises EBITDA by an average of more than 18%.
(McKinsey)
Without a ‘picture of success’ there’s no reference of what good looks like.
Most advanced customers use predictive analytics, sometimes powered by AI, to generate automated recommendations on range and space. In the absence of any other perspectives shared with a customer, a supplier’s presence at the point of purchase will be shaped for them.
Establish a clear role that customers can get behind.
Mapping the full category portfolio against the drivers can enable suppliers to navigate retailers to harness private-label as a lever for category growth whilst maximising the role and growth of brands. Private-label integration done well is a powerful tool.
Embrace opportunities presented by customers from category conversations.
If 73% of opportunities proposed to retailers fail to make it to instore execution it’s critical to be part of the 27%. Showing the route to value creation opens opportunities for experimentation by brands with the support of customers.
We work with clients to identify growth strategies and commercialise them:
Challenge the current category boundaries based on consumer insight and foresight.
Identification of the category problems to be solved.
Reframe category segmentation to reflect the changes in category buying behaviour being targeted.
Determine the responsible category growth opportunities and filter to capture quantified category growth drivers. Support with activation platforms.
Develop the supplier’s strategic imperatives.
Brand and portfolio mapping to reveal:
- innovation, renovation and deletion opportunities
- the brand relevance of category activation platforms to strengthen the current core.
Brand architecture development to determine the roadmap to growth set against relevant category drivers.
Lead high impact innovation sprints to create and test concepts.
Build in-house capability across relevant functions to create category-based selling stories that are objective consumer and/or shopper truths used to help engage customers in:
- the full category strategy
- initiatives or activities.
Facilitation of supplier-customer working sessions to co-create long term joint category business plans.
Develop a repeatable process to manage the point of purchase in all channels (on and offline) with a focus on range, merchandising, promotions, pricing, and shopper marketing.
Integrate RGM findings to optimise returns from available space.
Engaging supply chain partners in joint category plans to connect range recommendations to inventory management that optimise efficiency.
Problem
The client, a global brand leader was experiencing a long stream of unsuccessful new product introductions. This was accompanied by market share decline in major markets and declining Advantage Survey scores.
Approach
A central, cross functional commercial team were guided through the category strategy process. The key strategic outputs of category growth drivers, Activation platforms and strategic imperatives were all identified. The growth drivers created the context for portfolio mapping across the category and the client’s brands. This created a strong and meaningful brand and product portfolio strategy rooted in consumers needs. 30 markets were then engaged to adapt and adopt the strategy based on the relevance to their local realities.
Outcome
- A clearly defined innovation and renovation pipeline aligned from the centre.
- Greater portfolio consistency across markets maximising central ATL messaging and support.
- Improved customer engagement.
- Share growth in key markets.
- Top box advantage survey scores against consumer marketing and category criteria in targeted markets.
