OREANDA-NEWS. September 14, 2015. “As the Big Data deluge washes over retailers, category captains can be a lifeline,” writes Steven La Schiazza. “With manufacturers’ expansion into SMAC (social, mobile, analytics and cloud) and Internet of Things (IoT) technologies, they command a wealth of data that they can pass along to retailers in the form of sharper product assortment and forecasting.” Excerpts:

“The assistance category captains can provide retailers is sorely needed—yet resistance to the practice lingers. But with manufacturers’ data-driven capabilities in demand forecast and replenishment decisions, the use of category captains merits a new look.

In an era where category expertise matters more than ever, manufacturers can go in for the deep analysis dive in ways retailers can’t. Manufacturers know how a category is selling across multiple retailers, and they have access to a wide range of information such as competitors’ downstream POS data and inventory levels. This type of expertise can prove wildly successful.

Not every vendor has the capability to benefit your organization. But the potential improvements make the partnerships worth exploring with key vendors. The following steps can help your retail organization carefully evaluate whether category captains can beef up its merchandising strategies.

Determine the right category. Retailers should continue to manage the strategic categories that are core to their organization. In addition, ensure hedonic level is low, and variety is not a major determinant of customer satisfaction.

Select the right team. Proven management skills are a must for team members, both within your organization and the vendors’. Be sure to involve non-captain suppliers in category-management decisions to avoid competitive exclusion.

Put controls in place. Adopt guidelines to govern your partnership with a category captain. Be sure to include language that specifies your organization is free to follow—or not to follow—the manufacturer’s recommendation.

Take it slowly. Begin working with a category captain on a limited set of basic category-management decisions such as pricing, assortment, and shelf-space management. Once you have developed confidence in the partnership, you can begin to tackle more complex issues relating to logistics and your supply chain.

Technology has expanded the role of category captains far beyond its original task of assortment and space management. It’s time to revisit whether category captains can help your organization deliver the competitive edge it needs.”