Brick & Mortar categories are defined by retailers, and Digital categories are defined by shoppers.
Defining the category is the first step in the category management process. In the brick & mortar channel, category definition is largely driven by where retailers place products within the store. For example, orange juice is in the refrigerated section, eggs are in dairy, cereal in center store, and waffles are in frozen. Category definitions have been created based on the physical limitations of the retail store environment.
In the digital world, these physical limitations are lifted and shoppers now have the opportunity to define the category. Their category definitions are not necessarily defined by a product’s physical characteristics. Without aisles, shoppers often use broader criteria – such as occasions and need states. Online, many consumers shop for Breakfast, not RTE Cereal; or Snacks – not necessarily limited to the salty kind. With such a tremendous sea change at hand, how do you ensure your products are in the consideration set?
Online Shoppers Make Different Decisions
Online shoppers have different priorities than those observed in a traditional CDT – which is no surprise as online, products can come from anywhere, from anyone, at any price, at any time. As categories are redefined by consumers, buying decisions move further upstream.
Products are evaluated differently, largely because of the wealth of product information available online. For example, 90% of buying decisions are influenced by reviews – which can dramatically impact the importance of factors such as brand and price.
Online shoppers can easily switch to a competitor with quicker delivery. Lead time continues to impact sales volume and stocking decisions become more important when the online assortment is exponentially larger.
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