ATLANTA -- Retailers need to work closely with manufacturers in order to be educated about the importance of category management, said an executive with a large supermarket chain.
"Most retailers don't have the foggiest idea as to what the heck [manufacturers] are talking about when they come in the office with their reams of data and set up their laptop computers and start spewing statistical information," said Robert Schwartz, executive vice president of New York-based Red Apple Cos.
Schwartz spoke last month at a Category Management Best Practices Conference here, sponsored by the Institute for International Research, New York.
"They could care less," he said, noting that most supermarket chains do not have a vice president of sales position. "There is a buying mentality, and if you don't know what sells, how the heck can you buy it?"
Schwartz said buyers need to get "out in the trenches" in the store to see what is selling.
"I can juggle that computer any which way, and it will come out right based on what my objectives are," he said, alluding to manufacturer selling tools.
Schwartz said retailers have to determine if category management is the responsibility of the merchandising team or store operations team.
"Most retailers in the United States today do not have a corporate mission that is meaningful, or a strategy that can accomplish their corporate mission. Most retailers want to be everything to everyone. Everyone is their customer, and anyone who sells anything is their competitor. They throw more money out the window trying to attract new customers to their store when maybe they should be trying to retain their loyal customers," Schwartz said.
Category management is a lot more difficult than people think, Schwartz said, citing several Center Store products.
For example, Schwartz cited Quaker Oats Co. and its troubled Snapple Beverage line. "No one has ever sat down with Quaker Oats and said, 'Guys, we have a problem. Together. Both of us. What can we do to sell more Snapple?' "
As another example, Schwartz noted that whenever his chain did a category analysis of the gelatin business, the Royal brand, which was manufactured by Standard Brands at the time, "always went South," because Jell-O was moving two-to-one against it. However, it was later figured out that Jell-O packed 12 boxes to the case, while Royal was packed 24 boxes to a case.
"The whole area of category management, Efficient Consumer Response, co-marketing, co-branding and partnering can't be segregated. They all belong together. They are all part of doing business," he said, adding that both the manufacturing and retailing worlds are changing dramatically.
"Today in most conventional supermarkets the pet food aisle occupies more space than the canned fruit and vegetable sections combined," Schwartz said. "That is pretty scary if you are working for Del Monte, but not too bad if you're working for [Nestle's Mighty Dog brand]."
