Category management based assortment strategy in retailing: Development and testing

Abstract

Extensive globalization, competitive environment and market saturation with the goods and services demand new ways to increase the product utility in order to satisfy the customer needs and to increase the retailers’ competitiveness and revenue, which determines the relevancy and the practical implications of the study. Category management based assortment strategy developed by the author is versatile and can be adjusted to any wholesale and retail sale. This strategy can be applied both to the consumer goods and to the animal products which sales have their specific nature. Thus, the purpose of the study is to develop a versatile category management based assortment strategy in retailing and to illustrate it with a company dealing with the animal products. The study provides the solutions to the following retailing problems: 1) distribution of duties and responsibilities within the company structure interferes into the category management; 2) a company has no mission, purpose and strategy. Assortment structure in a retail chain has been assessed, the categories, subcategories, product groups and subgroups have been verified against the customer decision tree, in-house sales statistics, market trends, relationships with the suppliers have been evaluated, role and strategic analysis of the assortment strategy has been performed, actions have been proposed, and tactograms have been prepared for each product category of the retail chain in question. This author’s strategy comprehensively evaluates the trading activities of the retail chain and develops particular recommendations from the obtained results to increase the company’s efficiency: changes in the company’s structure, mission identification and verification of the purposes and strategies of the retail chain, review of a classifier and the assortment structure for each product category, subcategory, group, subgroup, as well as the analysis of the product categories, identification and review of the roles, strategies and actions for product categories / subcategories in a new classifier. Relation marketing based cooperation between the retail chain and suppliers will efficiently involve the resources of the stakeholders. These measures are aimed to fully satisfy the customer needs, to increase their loyalty, and thus, to increase the company’s revenue and the profit on the whole. The author’s category management based assortment strategy has significant practical implications for the Russian retail chains, including the regional level, because this gives them an opportunity to be developed from the proper applications of the available resources to satisfy the customer needs. Ever-changing market and extensive digitalization justify further studies in online category management and omnichannel.

Keywords

assortment strategy, management of assortment strategy, category management, wholesale trade, retail trade, animal product market, customer needs, retail chain, online store, omnichannel

For citation

Ilyenkova K.M. Category management based assortment strategy in retailing: Development and testing. Perm University Herald. Economy, 2020, vol. 15, no. 1, pp. 150–172. DOI 10.17072/1994-9960-2020-1-150-172

Acknowledgements

The author would like to extend her thanks to Sergei Mikhailovich Vorob'ev for valuable advice and recommendations which contribute into the quality of the article.

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