The mechanism of selling merchandise in small quantities from a fixed location directly to the individuals for their end use is called as retailing. The fixed location can be anything like super market, hyper market, department stores and so on.
Merchandise - Merchandise refers to the various products available at the store for sale to the end-users. It is the display of the merchandise which actually attracts the customers into the store.
Let us suppose all the products available at the store are stocked at one place only. Would such a display impress the customers ?
The answer is NO. Presentation of products is essential.
As a solution to the above problem, the retailers came out with the concept of category management.
The concept of segregating similar products into separate groups is called as category management. The complete range of merchandise available at the retail store is divided into separate product categories consisting of related products.
Categories in a retail store refer to the various groups which consist of products belonging to a similar family. The retailer smartly displays all the related products together as distinct categories for his as well as the end-users convenience.
Toothpaste, Tooth Brush, Mouth wash, Tongue cleaner, soap, shampoo, body wash, cosmetics etc, can be displayed together under a single category called personal care section.
Vegetables, Fruits, Tinned Food, Juice, meat, dairy products form a single category.
Certain retail stores also classify their merchandise into women, men as well as kids category.
Department stores also have separate categories like:
Apparels, Footwear, Jewellery, Electronic appliances, Mobiles, Watches, Home furnishings, house hold appliances and so on.
The retailer must sort out the similar products which can be included in a single category. He must make sure that the products bear a strong connection with each other.
However some retailers find the above process cumbersome and only follow the below five steps:
The retailer generally appoints one individual who supplies all the products of a single category. This individual also called as supplier is known as a category captain.
The suppliers are equally responsible for the category and contribute their level best to maximize the revenue of the particular category. He works in close coordination with the retailer and is responsible for the profit and loss of his assigned category.
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