Two of H&L’s main objectives in 2009 are (1) to improve operational efficiency; and (2) to use team effort to meet customers’ needs. In order to meet these objectives, H&L has started to implement a strategic approach known as Category Management. Category management is a tried and proven retailing concept which has been in use for many years across the world. Category management involves:
• Creating/Identifying Categories
Taking the total range of products carried by H&L and breaking them down into groups of related products
• Managing/Running Each Category Like A Business
Set objectives for each category (turn over, profitability, growth) and develop and implement strategies to achieve the set objectives
• Using Cross Functional Teams To Drive Performance
Category Managers and Buyers, will work closely with:
• Suppliers
• Supply Chain
• Retail & Merchandising
• Marketing
The concept of managing categories in “bite sized pieces” involves a greater mining of data to provide a deeper understanding of our business. This provides the basis for and analysis of areas that need improvement. Such improvement contributes to higher levels of operational efficiency. The people behind category management, who are referred to as the Category Team, measure results, with a view of mproving performance. In implanting category strategies H&L will leverage the following tools to ensure success:
• Merchandising (shelf, display, Point of Sale)
• Assortment (right variety, SKU management)
• Pricing
• Promotion
• Inventory management to improve inventory turns and gross margin returns on inventory investments
• More effective retailer/vendor partnerships (Information sharing, involvement and partnership on all category initiatives)
H&L will manage its categories of products more effectively with the successful implementation of category management in 2009. With the category management initiative fully implemented, the company is expected to increase its profits on each dollar of revenue as a direct result of operational efficiency gains. In the long term, it should be easy for H&L to sustain the benefits of category management because the process allows for greater oversight at the core of our business.
