Category Roles

Destination: To be the primary category provider and help define the retailer as the store of choice by delivering consistent, superior target customer value.
Routine: To be one of the preferred category providers and help develop the retailer as the store of choice by delivering frequent, competitive target consumer value.
Occasional/Seasonal: To be a major category provider, help reinforce the retailer as the store of choice by delivering frequent, competitive target consumer value.
Convenience: To be a category provider and help reinforce the retailer as the full service store of choice by delivering good target consumer value.

Exhibit 31.7   Category roles (Source: TPG).

Depending on a chain’s identity and value proposition, categories vary in importance and in terms of the roles that they play within the chain’s portfolio of departments and categories.

As advocated by The Partnering Group (TPG), there are four basic category roles — destination, routine, convenience and occasional/seasonal. Described in Exhibit 31.7, these roles establish a category’s place within the chain’s portfolio and form the basis for the allocation of resources.

The roles distinguish categories in terms of their attractiveness and strategic importance:

  • Strategic Importance: Is there high synergy between the category and the chain? Is the category well aligned with the chain’s purpose and identity? Is it important to target shoppers?
    Two measures that help assess the strategic fit with shoppers are chain loyalty and propensity. Another relevant metric is the Fair Share Index:

    The fair share index reflects the importance of the category to the retail chain, in terms of the chain’s contribution to category sales.
  • Category attractiveness: Size and growth rate in terms of volume, value, profitability.

Destination categories rank high on strategic fit as well as category attractiveness. They are central to the chain’s identity and of strategic importance to their business.

For example, wine is a destination category at Cold Storage, an upmarket supermarket chain in Singapore. It is also the biggest packaged foods category at the chain; this despite the fact that wine is a relatively small category in the country as a whole.

On the other hand, at Watsons, a personal care chain in Asia that targets young women, facial care is the destination category.

Routine categories rank medium to high on strategic fit and category importance. Their presence and offering also has an important bearing on store selection. They reinforce the banner’s identity and image, but not to the same extent as destination categories. Tea and pet foods for example are routine categories at Cold Storage.

Supermarket chains usually stocks a limited range of magazines and newspapers, but usually no books. Some chains however made an exception for the exceedingly popular Harry Potter series, at the time the books were released. This served to excite their younger shoppers, and provided convenience to them and their parents.

Convenience categories such as books and stationery at supermarkets rank low on strategic fit and category importance. Their presence provides for a one-stop shopping convenience for the chain’s shoppers.

Seasonal or occasional categories include New Year’s greeting cards, Christmas and Chinese New Year goodies, and categories like sun block or insecticides in Europe.

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