Will the role of Category Management survive the AI slaughterhouse?

Traditionally, a category manager has performed task-driven functions, such as supplier relationships, pricing and placement, assortment and promotion management. However, there is an ongoing shift within retail, due to high competition, increased demands, complexity, automation and accessibility to big data. Furthermore, brick-and-mortar stores are being replaced by a hybrid physical-and-digital environment. Clearly, the operating environment for a retailer is changing, and this creates an accelerating need for transformation for how you address category management!

Pressure to make the right move

New complexity in shopping behavior creates a need for cross-collaboration between manufacturers, retailers and suppliers in order to stay competitive. To add on – digitalization and technology development results in higher demands from customers, who have emerging expectations on all aspects of retail. This increases the importance of category managers making the right move. New technologies create opportunities to see business from a customer perspective, which if done correctly opens for personalized offers and localization. Increasing the retailers likelihood being the customers number one choice.

From teams to algorithms

Advances within automation create great opportunities for retail. By shifting tasks from teams to algorithms, both efficiency and accuracy can be improved as well as it allows immediate response to changes in demand. These factors will be crucial in the increasingly competitive environment, which will reduce the number of human touch points and need of traditional category managers!

Do you think this sounds like a faraway future? Think again, this is happening today! Amazon has begun to automate their retail team’s jobs by shifting tasks such as forecasting demand, ordering inventory and negotiating prices to algorithms.

Reduced competitiveness on a complex arena

Today, the accessibility to large ranges of consumer data create great possibilities for retailers to recognize shopping patterns, demand trends, personalize and optimize of offerings. Hence, big data can provide valuable insights if managed correctly. But many category managers still struggle with collecting, integrating and analyzing the huge amounts of available data they have available.

To be able to create valuable insights, improve business and create a competitive advantage, data analytics and interpretation abilities and skills are a necessity

The Category Manager capabilities of the fututre

The implications of the ongoing shift within retail, requires new capabilities from category managers.

Right now, supporting tools are used to generate data driven decision-support for category managers in tasks such as pricing and promotion. Tomorrow, supporting tools will be used to generate data-driven decision support. Soon, intelligent software applications will take over some of the category manager’s tasks. In the future, the category manager could be completely replaced by AI software connecting to both consumers’ and supplier’s data.

– So, is the role of a category manager dead tomorrow?

Probably not, but most likely the role will shift from task-driven functions to automated rule-based creation, which implies an increased need for analytic and interpretation skills, rule-based thinking and a more forward-looking focus on predictive analytics!

“Tomorrow will challenge the traditional role of category managers and push for more rule-based thinking driven by quantified insights”

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Digitalization / Retail & Consumer Goods
Adapting to the Digital Arena
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