Developing category management for an online retailer

Challenge

After years of strong growth, the online retailer of consumer products faced deteriorating profitability and capital efficiency due to increased cost base and high inventory levels originating from availability challenges during the pandemic. Now, the company wanted to address these challenges by taking the first step towards more systematic category management.

Brave the Future

With analytical rigor, August evaluated the represented product categories and client’s current performance in them. Better transparency to category performance, profit drivers, and contributions of different brands enabled the client to define clear category roles (win, build, maintain, streamline or exit) to drive future profitable growth.

Working closely with the client organization, August formulated category strategies that highlighted concrete development opportunities and their financial potential, as well as provided a sample tool for supplier negotiations.

Furthermore, in a cooperative manner, August developed a recommendation on how the client should revise their organizational structure in order to make the most out of systematic category management practices in the future.

Impact

Client received a comprehensive picture of their assortment’s performance across all categories, combining view of the market attractiveness and own capabilities, as well as advice on how to proceed in category management.

The findings and recommendations were well-received by c-level executives and board members, emphasizing the value of a fresh outside view of the business and the presented recommendations.