Also known as Category Management, it is a product placement strategy for generating successful retail sales. Learn how to use it for the benefit of your business.
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This article was translated using AI technologies from our Spanish edition. Errors can occur as a result of this process.
If you are already immersed in the world of sales, you surely know that product placement is vital to commercial success. In this sense, CatMan or Category Management is one of the most useful tools. It's a process that helps put the right product in the right place based on algorithms and data analysis.
The ECR committee defines CatMan as the process carried out between manufacturers and retail chains to manage product categories as strategic business units.
"In the context of purchases, category management refers to managing and forecasting the categories of products to buy for better performance and better profits," according to the America Retail portal.
The CatMan can be used in virtually any retail store, but it is more useful and complex over large areas. Image: Alexander Kovacs via Unsplash.com.
"It's a customer-supplier process where categories are managed as strategic business areas that target the end user and produce results in retail," the same medium explains in another publication.
In simple terms, the CatMan is a very effective tool that manages spaces in large areas and allows you to put the right product in the right position with the most convenient display to boost your sales.
How does the CatMan process work?
Good category management is achieved by analyzing product cataloging: margins, sales prices and sales. Consumer data analysis breaks them down by customer type, store, channel and region.
The result of the process is the planogram, a virtual graphic and analytical representation of the range of a certain category. This will be used as a placement guide for physical implementation on the sales floor.
The ultimate goal is to have an effective impact on the consumer to increase the profitability of a product at the point of sale.
Why is the CatMan important in the age of COVID?
Store hygiene restrictions imposed to contain the pandemic make the arrangement and organization of products key for customers to purchase an item.
The aim of category management in retail is to increase profits and offer the customer a better shopping experience. Therefore, it is important to strategically plan the location of the products on the sales floor and place them according to the category they suit and the attitude of the buyer.
Category management or category administration is used to position each product most conveniently according to its category in order to increase profit and offer the consumer added value. Image: Neonbrand via Unsplash.com.
The CatMan was created with Walmart in the USA in the late 1980s. Since then it has produced excellent results for various retail chains and manufacturers.
Currently there is the Category Management Association, founded in 2004, to bring together professionals immersed in this process. In this way, they can learn best practices in this regard at a global level.
Technological advances have helped streamline the CatMan process in terms of measurement and control. Now the challenge is to extend that strategy to the area of online sales, which has been growing in popularity since 2020 and continues to this day.