Category growth is seldom a ‘given’. Certainly, the Covid crisis has resulted in winners and losers. Gains in the Home Channel have sometimes been offset by losses Away from Home. Category Management is all about influence: the ability to collaborate internally with brand teams to better meet shopper and channel needs, while partnering externally to set customers up for the next stage of growth.
This role has become more complex in a world where many customers operate across multiple channels displaying divergent growth trends. My prediction is that a seismic change is coming to category management in FMCG. A change that will see more innovation, more experimentation and a wave of new tooling to enable omni-channel category leadership.
I was recently invited to join a virtual roundtable with Category Directors, seasoned industry consultants and academics working in this space. Suppliers ranged in size from the biggest multinationals to UK scale-ups. I was asked to share some thoughts on the future of insight in Category Development. A rich discussion ensued, pointing to a new scope and new skillset for Category Teams of the future.
The Data and Insight Paradox
We discussed how each participant saw their company in relation to peers when it came to availability of both data and insight. There is no direct link between data volumes and the availability of penetrating category insights. Some larger suppliers felt that they had vast reams of data. Yet this didn’t always translate to being the masters of category insight.
In contrast, a couple of the smallest companies were working from skeletal datasets but believed that they were comparatively good at delivering meaningful insight to customers. This is, of course, based on self-report and I know that several of the largest suppliers score very highly on the Advantage survey. However, there does seem to be a nagging belief that there must be untapped value lurking in the data.
Influence is about shaping beliefs more than imparting knowledge
Business decisions are usually based in implicit beliefs rather than explicit facts. A belief, for example, that listing product A and delisting product X will lead to net profitability gains. In such a situation, there is no specific ‘knowledge’ of the future case that can be imparted. Modelling can help, as can reference market information – but we cannot see the future.
Category growth depends on our ability to partner with customers to deliver mutual wins. Our job as Category Leaders is to inspire and give confidence for bold choices. To do that, we need to inform the customer’s beliefs about the category.
Whilst Behavioural Economics has taught us a lot about human bias, one of the more fascinating aspects is the fact that our beliefs actually inform our recall and reconstruction of memories about choice. We post-rationalise to support choices that we actually made – and even to support choices that we believe we made in the past but did not in fact make.
So, by influencing beliefs we can not only impact choice but also impact the recall of memories related to that choice.
This is, perhaps, where start-ups and scale-ups have an edge. Their very existence is down to their ability to inspire through storytelling – whether that is to convince their first customer to take a punt on their products – or to convince an investor to provide funds to scale production. They compete not with ‘more data’ but with persuasive human arguments.
The role of insight in shaping beliefs
Great Category Managers are exemplary visionaries and influencers (not unlike entrepreneurs). Quantitative data and insight play a critical role in identifying and quantifying growth opportunities. However, real influence comes through blending this insight into very human stories, making this feel ‘real’ to each individual customer. When we do this brilliantly, we engage heart as well as mind, extending our influence.
Accelerated Insight is essential
Today, too much time is spent by highly skilled Category Managers on mundane number-crunching. Time that could be spent in store understanding shopping behaviours. Time that could be spent building richer, more engaging and human stories to influence customer beliefs and choices. The good news is that tooling is already available to help on this journey. If you’d like to find out more about how automated insights could help your Category Team deliver with more impact, get in touch.
Donald Miller, Building a StoryBrand: Clarify your Message so Customers will Listen, (2017) Harper Collins