Category management is critically important to a successful micro market operation. Because a micro market doesn’t restrain the vending operator to product size and price, having the right products, in the right place, for the right price – category management – is easier and more important. However, to the operator new to retail, this can be a daunting task. It requires looking at the sales numbers and reports to ensure the best product assortment, placement and pricing. Here are some tips to help operators achieve their goals.
Best product assortment
“As with any successful business, it’s important for micro market operators to leverage data to carefully monitor sales, profitability and trends,” explained Kelly Fulford, senior category development manager at General Mills Convenience. The data will indicate what products sell during what time of day, what items are being bought together and much more. Using this data will ensure operators are carrying the correct product assortment.
“The rule of the thumb is to carry 80 percent of the core – your highest performing, fastest-turning items, and balance the remaining 20 percent of your assortment with new and regional items,” said Fulford. She also suggests looking beyond internal data to the competitive markets to ensure operators aren’t leaving gaps in their product mix as well as carrying products across key center store categories – breakfast, salty, sweet and confection.
Best product placement and daypart
Another important consideration in driving sales with category management is product placement. “Operators need to consider the consumers' 'need state' or frame of mind at the time of purchase,” said Fulford. “Is the consumer looking for something sweet or salty? This is closely related to 'day-part' or what time of day the purchase is being made.”
An example might be a micro market operator placing cup cereal, granola bars, pastries, pop-tarts, breakfast bars and nutrition/energy bars together, according to Fulford. This grouping makes up a morning day-part and meets the breakfast-need state. “These products should be merchandised by the important a.m. [sales] driver – coffee,” adds Fulford, “which is a large morning destination for micro market shoppers.” Because consumers are only in the micro market for a few minutes, placement of similar items together is very important to increase the number of products a person buys.
Best product pricing strategy
For the greatest level of success, Fulford suggests operators mimic retail. “It’s important for the price to be clearly displayed so there are no surprises at the check-out,” she said. “Also, operators need to regularly monitor their stores to ensure there are no out of stocks and their products are organized and faced correctly.”
Because leveraging product data can by a daunting task and new to the operator, Fulford offers a partnership for the future. “My hope is that operators will partner with suppliers and manufacturers to help them formulate the best strategies for their stores,” she said.
To maximize profits, an operator needs to be strategic about product assortment, placement and pricing in today’s micro market environment.