The Case for Category Strategy
What are the things you couldn't do without?
There are the obvious things - air, water, food, shelter. But we all have other must haves, right?
Maybe it’s your weekly exercise class? Perhaps it’s your favourite chocolate? Or it could be your daily flat white? In a focus group recently one woman said that she’d rather go without a shower than her morning cup of tea. Hopefully she is never in a situation where she has to choose between the two.
So, in an article titled “The Case for Category Strategy,” why are we talking about this? Well, at a time when the rounds of restructures and cost cutting exercises in the FMCG world are seemingly never-ending, we are used to hearing lots about focusing on must haves versus nice to haves. But we were still shocked when we heard Category Strategy being thought of as a “nice to have” at a company we respect, rather than a “must have”.
We think having a great Category Strategy is an absolute must have.
But we would say that, right? As a consultancy that works with a lot of FMCG companies on Category Strategy you wouldn’t expect us to say otherwise.
So, we thought we’d have a go at setting out a simple case for having a Category Strategy – what it is, why you need one and what a great one looks like.
What is a Category Strategy?
You’ll notice that we talk about a Category Strategy not a Category Vision. That’s deliberate. The biggest issue we see with Visions is that they stay exactly that – a Vision. Not much happens once it is created. A strategy is focused on what you need to do – now and in the future.
Retailers are interested in a strategy – what they can do. Not a vision – what might happen at some point down the line. They are also interested in practical solutions. Things that can be implemented and scaled. For instance, in a recent conversation we had with a buyer they told us, “Don’t come to me with a whizzy fixturisation concept. That just isn’t going to fly.”
A good Category Strategy hits the sweet spot between being ambitious enough and being grounded enough.
Why do you need a Category Strategy?
A Category Strategy is not just another document in the archives of the FMCG library. It can make a big difference to an organisation by setting some clear, strategic direction for the category.
There are three main roles it can play:
1. It should develop a Category first mindset: Helping you move beyond a focus on market share to a focus on category growth (with your brands winning disproportionately) and sustainable shopper behaviour change.
2. It should direct and challenge internal thinking: Helping you see and do the things that you wouldn’t have seen or done otherwise. It often helps you see the big opportunities. The biggest opportunities for your brand are often the biggest opportunities for your category. For instance, if the biggest opportunity in the category is penetration (more users) and your innovation and communication plan is all about new products that are trying to get existing users to trade up, you probably want to change some of those plans.
3. It should give you a clear view to take to retailers: One that acts as a framing device for key activities. This is how the category can grow. This is the role our brand can play. These are the activities we can deliver. For instance, snacking may be a key growth opportunity. Say it is a key opportunity. Then say that a key part of your innovation plan is new snacking formats. Then say that you will be bringing these to market over the next 18 months. Then each time you talk about an individual activity (e.g. a piece of NPD) you have a ready-made frame for doing so.
A Category Strategy sets out how the category can (will) grow and what you need to do (the role that your brands play) to drive that growth.
What does a great Category Strategy look like?
We have seen Category Strategies that are 100 slides long. People on the receiving end of them tell us that they are not sure what the real story is, what they are actually meant to do with it and that they are struggling to get retailer buy in. These are category strategies that start with the right intentions but, for several reasons, come up short. We are often asked to help get to something simpler and more directive.
To do that, we use 5 Golden Rules for creating the content of a winning Category Strategy:
1. Focus on what’s important.
The things that really matter in a category. Too many category strategies are overloaded with information. They include everything you know about the category. All the unimportant stuff distracts from the really important stuff.
2. Get specific.
Hone in on what things mean for your particular category. Too many category strategies are generic. They use motherhood statements that could apply to any category. For instance, “health” rather than the angle on health – e.g. “5 a day” or “functional benefits”.
3. Be directive.
Identify what you need to do (Growth Drivers) and how you need to do it (Critical Moves). Then prioritise. Too many category strategies have a shopping list of actions and tactics with little prioritisation. So many things that people could do that they end up doing none of them.
4. Tell a story.
Craft a simple, clear and memorable story. So that people get it, remember it and can play it back and talk to it. Too many category strategies are easily forgettable. There is often no clear story, no real hooks, lots of complicated language or jargon.
5. Challenge the status quo.
There should be certain things in there that make people feel a bit uncomfortable. Too many category strategies simply validate what the category (and brands within it) is currently doing. They focus on what you can do rather than what you should do.
So that’s it. No long white paper. Just three pretty short answers to three simple questions.
In a world where FMCG companies are considering what are nice to haves and what are must haves, Category Strategies are a must have. They are a key part of the FMCG furniture. It would be a pretty uncomfortable place without them.
If you recognise some of the things we’ve said or if you’d like to know more about our Category Strategy work, we’d love to talk to you. Drop us an email or give us a call: