5 Challenges Faced by Digital Grocers in Category Management

Dave Weinand
August 26, 2022
5 Challenges Faced by Digital Grocers in Category Management

At A Glance

  • Robust category management can lure customers to purchase more items than their pre-planned shopping list
  • However, both consumers' expectations and those of grocers are changing constantly in the fiercely competitive market
  • With digital projected to rise to 20% of overall sales by 2025, grocers need to focus more than ever on category management
  • To stay competitive, grocers need to take category management to a whole new level
  • This article lists five challenges that grocers face in category management

Ever questioned why customers end up buying more than what they intended to when they visited a grocery store - be it physical or an online one? It is not the impulse buying behavior that leads shoppers to purchase those extra baked goods or bath care products; rather, it is an example of category management that results in them purchasing more than they came to buy.

This doesn't necessarily mean that the customers will purchase things they don't need; rather, it just means that strong category management can enable grocers to lure more customers to buy items in that specific category than what they may have planned earlier.

As the market gets more competitive, both consumers' requirements and expectations and those of grocers are changing. With digital projected to rise to 20% of overall sales by 2025, grocers will need to focus their attention on improving their digital execution, which also includes category management. To stay competitive, grocers need to take category management to a whole new level. Here are some of the challenges that grocers face in category management: 

Attracting Customers To Grocery Platform

It can be difficult to draw customers in today's market with merely affordable prices and offered products. Shoppers are more drawn to the convenience and amenities that grocers offer as part of their purchasing experience. According to the Incisiv Annual Digital Benchmark Report 2021, 80% of shoppers will leave a website if it fails to offer convenient navigation with relevant results. Grocers must recognize what makes their store unique and provide customers with a compelling argument to shop from them rather than at a rival establishment. This can involve working towards building and grouping categories on websites or stores to maximize the appeal.

Looking Beyond Individual Categories

Grocers find it difficult to maintain the store's overall performance while maximizing the performance of each specific category. However, they need to start thinking about how a particular category will affect other categories. Additionally, they must expand their knowledge and awareness of the various grocery categories to spot cross-category potential.

Understanding Overall Shopper Behavior

The data and intelligence available to retailers are better than ever. Grocers now have an opportunity to widen their horizons beyond just categories. So, while they are gauging innovative perspectives into category management, grocery merchants can also prioritize knowing the holistic shopping behavior outside of their own websites or stores. This can enable grocers to gain a competitive edge in the market.

Continuing To Address Pre-Existing Problems 

The problems that existed before the pandemic are still there, but they are now more difficult. The recent past has shown to be a poor indicator of potential future patterns. Understanding customer behavior has always been important, but a strong shift post-pandemic has made this all the more difficult. Another challenge comes in building a strong and transparent relationship with the manufacturers - another factor that has become more important than ever. What makes navigating through all of this even harder is not just the lack of data, but also generating actionable insights from large and complex data, if available.

Maintaining Consistency Among All Platforms

Even though the pandemic has moved more purchases online, it has also accelerated the growth of hourly delivery services. There used to be a distinction between a physical shop and its internet presence. It no longer exists. Cross-shopping between brick-and-mortar outlets, websites, and mobile apps is fairly common now. Therefore, grocers must work towards creating consistency in the categorization of various products across all platforms.   

The demands and expectations of shoppers are constantly growing as modern businesses compete more fiercely. Grocers face several challenges, including the aforementioned addressing changing customer demands and enhancing overall category management. Combating these challenges can truly empower the grocers to leverage category management in the best way possible, thereby, enabling them to stay ahead of the curve.