Can you reduce product assortment? Of course you can!

Stephen Needel
Advanced Simulations LLC, United States

INTRODUCTION

Category management has now been part of our vocabulary for well over a decade. The philosophy of category management, as espoused in the early 1990s by such experts as Brian Harris (Harris, 1992), exhorts us to:

  • Treat categories as strategic business units. This means that a retailer needs to consider each category as a profit center, maximizing sales and profit per linear foot/meter.

  • Treat the categories as part of an overall retailer's strategy. In Harris' schema, the buying, merchandising, marketing, finance, and operations functions are integrated. A category is given a strategic role by the retailer's management. It's the job of the category manager to fit the category into that role (or change its role if need be). When marketing says Category X will be a loss leader designed to increase store traffic, the buyer needs to buy the products at the lowest possible cost, the merchandiser needs to place the category strategically to bring traffic to the desired areas, finance needs to figure the optimal price, and operations needs to make sure there's enough of the product on hand for the expected rush.