STOP & SHOP ADOPTS NEW CATEGORY MANAGEMENT SOFTWARE

ANNE B. HOLLYDAY

QUINCY, Mass. -- As part of a trend among retailers to step up category management efforts to show which products to put on shelves, Stop & Shop here has signed on with a new marketing intelligence software system. The software is designed to run on Stop & Shop's intranet to improve the efficiency of category management reviews and enable collaboration with food manufacturers on shopper product buying patterns.

Through relying upon the category management software's advanced reporting and analysis capabilities, Stop & Shop is aiming for better margins on its products, as well as an increased customer satisfaction and loyalty base.

"Understanding consumer dynamics affords us a competitive advantage," said Russell Evans, director of category management for Stop & Shop. He explained that by using the software, "we will empower our category managers to better understand the needs of consumers, resulting in a significant increase in customer service and satisfaction."

Stop & Shop's effort supports the findings of the Sixth Annual State of the Industry Report on Supermarket Technology, developed by editors of Executive Technology and Supermarket News. The survey noted that some retailers have begun working even more directly with manufacturers to improve category management and measure the effect of promotions -- not just on item sales but on the category as a whole.

The category management software from Danbury, Conn.-based Kenosia Corporation, offers advanced reporting and analysis capabilities distributed through the Web. The software is designed to enable planogram analysis on a linear foot profit basis, so that Stop & Shop can analyze how much profit each shelf generates.

The software system enables Stop & Shop's product managers to analyze buying habits, merchandising practices, and data as people buy from each food category at the checkout counter so they can best decide how to adjust their promotional efforts. The information lets A&P know how and where to advertise and how to structure promotional activities. For example, while Stop & Shop may increase unit sales of steak through a big promotion, the software system could reveal that similar efforts for paper towels are unnecessary, since existing customers are buying it anyway.

The category management software can also reveal how Stop & Shop's efforts will affect retailer volume in any category and will help them determine what level to discount a product in order to increase sales, but still make a profit on each unit sold.