So far, we’ve taken a look at what category management is all about, and explored key aspects of the digital shelf, including its various channels and shopping missions. Now it’s time to discuss how to apply this knowledge to help shape your approach to category management on the digital shelf.

Let’s start by looking at the eCommerce growth formula, and the key drivers behind online category growth.

Although this formula might vary slightly depending on the area in which you’re looking to achieve growth, category growth is generally driven by increasing: traffic - in other words, the number of people visiting the category, conversion rate - the number of shoppers who purchase from the category, or average order value - which is the average value of the shopper basket.

Manipulating any of these three drivers - traffic, conversion rate or average order value - will have an impact on category growth and performance, and the eCommerce growth formula can help you determine which driver - or drivers - are contributing to that change.

But, how can you influence these drivers in the first place? Well, this brings us back to the four levers - or Ps - of category management that we mentioned at the start of this lesson: product, placement, promotion and price. Your approach to each of these levers can have an impact on any one of the drivers in the eCommerce growth formula, so let’s take a look at how you should approach each of the 4Ps to achieve category growth online.

First up - product. You’ll need to carry out a product assessment that focuses on three key areas: portfolio, content and availability, to help you identify how easy it is to discover and purchase your products on the digital shelf, and whether your online content is helping or hindering this process. Keep in mind that all of these can also be linked to physical store processes, depending on the retailer.

The first area of focus during a product assessment is portfolio. During this process there are a number of things you’ll want to determine. First, you'll want to check whether category best-sellers are actually available to buy online. Then, you might seek to understand how different online shopping missions influence the performance of different pack sizes, compared to the physical store, for example. And, of course, you’ll want to discover if there are any opportunities to improve assortment for the online shopper.

The next area of focus - content - is integral to the digital shelf. You should look for opportunities to improve product images, titles and descriptions, to help shopper navigation and to drive category conversion. You might also want to identify opportunities for additional content, such as lifestyle images or videos, to provide more information about a product, its benefits and uses.

Finally, consider product availability. Now, availability doesn’t necessarily just mean whether or not shoppers are actually able to buy an item, it also relates to a product’s discoverability - in other words, whether shoppers are even finding it in the first place. Are your products being shown to shoppers in response to relevant search queries? Are best sellers visible through search and taxonomy? How far down the results page are your products placed? Are they making it into the favorites lists of shoppers?

The next lever you’ll want to assess is placement. This is where you’ll focus on improving the overall appeal of a category, and making sure it's easy for shoppers to make a purchase. You’ll want to do this across all of the key shopper touchpoints, including search, taxonomy and favorites lists.

To get a good understanding of search, category managers will first need to understand the basics of retailer search algorithms, as well as the keywords shoppers are using to find products. This is where product content comes back into play. To properly assess how effective a retailer’s algorithm is at placing your products at the top of a search results page, you’ll need to recognize the integral role of product content, like titles and descriptions, in driving product discoverability. Products that are missing high traffic keywords from a title, for example, might not be visible at all for a search using those keywords.

Next, taxonomy. This can be compared to the layout and planograms of a physical store. Here, category managers should be asking questions like: “how can the taxonomy be improved to make it easier for people to shop?”, and “how can the category be made more visible?”

Taxonomy also offers category managers the opportunity to drive ease of shop, conversion and traffic by meeting different shopper missions and need states.

Walmart, for example, created a dedicated page on its retail site for its ‘Built for Better’ campaign, designed to highlight its range of healthy and sustainable products. To help shoppers find this designated page easily, it added a ‘Built for Better’ subcategory to its main ‘Savings and Featured Shops’ category within the taxonomy.

The final thing you’ll want to consider when assessing placement, are favorites lists, because these can be a significant source of basket adds for certain retailers and, often, products that don’t appear in favorites lists lose visibility elsewhere online. It’s therefore important to get any newly launched products into the baskets of shoppers quickly, to help secure a place on these lists.

Category Management on the Digital Shelf

About