Traditionally, category reviews are done by retailers on a yearly basis, with the goal optimizing the assortment. Retailers take this opportunity to understand what brands and items are productive in volume and velocity, identify items that are dragging sales down in order to cut them out, and discover new items to plug into the set. Ideally, a retailer wants to “comp” or outperform the sales from last year.

However, retailers are not the only people that can benefit from building a category review. The foundational data used for a category review is very similar to that for a sell story, but with one major difference – a category review is an objective, impartial view, while a sell story usually contains some strong bias toward the hero brand.

A well-structured category review starts off at a high level, and then trickles down and becomes more granular. For example:

• The Frozen Pizza category is up 2% versus last year.
• The bump in dollar sales came from an increase in units, which was in turn driven by an increase in velocity.
• Velocity was up due to increased promotional activity.
• Promotional activity was up due to a new summer sale executed by the retailer.
• Brands A and B were the main drivers of incremental sales during the summer sale.

While that is just one example, category reviews can reveal a variety of information. Big shifts in market share, distribution, velocity, or pricing can be traced down to their root causes, which are often due to the performance of specific items or brands during a certain period of time.

The next time you are reviewing a category, consider the following goals:

1. Analyze Competition: Compare sales with competitors and the overall market to find areas of strength and opportunities for improvement.
2. Boost Distribution & Visibility: Brands can discover how widely distributed their growth is by looking at ACV or TDPs. Sometimes brands are surprised that an item is not as widely distributed as originally assumed, which could be due to a number of external factors like delivery or out of stock issues.
3. Build Customer Loyalty: Category reviews are often paired with Consumer Panel data, which helps to uncover deeper trends relating to demographics, buy rates, or household penetration.
4. Refine Marketing & Promotions: Looking at both aggregated and trended promotional data can help brands identify what products are executing successful promotions that drive incremental units. Brands can dive down and see which weeks during the year were the most productive and what types of promotions or discounts were responsible for said growth.
5. Improve Product Mix: By grouping products using attributes, brands can see what types of items are driving growth and which are responsible for decline. If a brand sees that products with higher protein per serving are doing well, and they don’t have an item that fills that niche, they may want to consider creating a new item with similar qualities. A good category review can give the brand a view into the size of the market, growth of the market, pricing of similar items, and other valuable insights.

Category Review Elements

The “Category Review” dashboard in SATORI is an excellent resource to analyze a category quickly. These are the key elements to pay attention to:

• Subcategory vs overall Department growth – is this subcategory dragging things down or doing better than average?
• Decomposition tree – Breaks apart the category’s growth into distinct levers of growth, which are pricing, units, distribution and velocity.
• Brand vs Subcategory metrics – Easily identify which brands are overperforming and underperforming.
• Brand vs brand metrics – Of those brand which are overperforming, which ones are doing the best? Pay special attention to sales volume, velocity, market share and promotional spending.

From this point many brands will want to look at attributes, product group, or item level performance and trends. Depending on your thought process, theories and goals, SPINS can help you build or analyze any category in the grocery store.