What would you like to change about your eating habits in 2004?

Easy to say, harder to communicate and execute.

Most shopper data that is available to category managers relies on the cause and effect of past behaviors. Warm days, more cold beverage sales. Heavy in-store Super Bowl-themed promotions, more snack food sales. Category managers must study the seasonality, traffic flow, size of display, neighborhood ethnic background, shopper income, shopper age, and size of family in order to develop an objective "best of class" plan that will sell more goods. That's both more base sales and more incremental sales.

Category management at its best should be a real-time merchandising plan that is constantly shifting and anticipating consumer behavior. We all know that displaying more candy and treats for kids at Halloween translates into more sales. Attractive Thanksgiving displays sell seasonal products that otherwise sit on the shelves. We get it. Isn't it time to move category management to the next level?

Less sophisticated models prove the short-term effect of evolving the merchandising plan to anticipate shopper needs. Take the examples of the New York City deli that sells bottled water and flashlights on the curb during the blackout; the Southern California independent grocer that, as competitors' employees strike, expands its offerings and proactively asks its new customers what else the store should be stocking; and the gourmet retailer that always checks the editorial calendar of the local newspaper to match its displays to the scheduled food features.

The question is, how do we take this forward-thinking approach and make it into a 24/7 reality? It's hard enough to predict the future, let alone execute the merchandising in time to take advantage of the opportunity. Shifting the display and stock in one store is quite different from merchandising 1,000 stores. Or is it?

A shift to prediction

The study of past behaviors is just one indicator of future purchases. The world is moving at breakneck speed, food and health trends are shifting, and the role of the category manager must shift with them to include predictive behaviors based on a new future, not on past behavior.

For example, this Halloween season could have been an opportunity to build awareness and incremental sales in new categories. Just one week before Halloween, the television news programs were filled with stories that could impact retail sales. It was the one-year anniversary of the federal organic regulations, and all four major networks told the story of how organic products of all kinds have become mainstream and are growing in popularity and consumption. I didn't see a single retailer showcase an "organic Halloween" display. Prime-time television has been jammed with reports and specials on childhood obesity. I looked for "low-calorie Halloween treats" displays, but I didn't find any of those, either.

Category managers need to evolve to be part statistician, part executor, part communicator, part forecaster, and part trend watcher. There is value to basing the future on the past, but the value is diminishing with each retail execution.

Category managers will say their aim is to build consumer equity and that is being achieved, and the increases in sales and profits prove it. I disagree.

Consumer equity is built by the brand—by its advertising, its relationship to the customer, its quality, and its reputation, not by its shelf location and maximization by square inch. Don't misunderstand, these are critical elements of success and, in today's world, must-haves for both the retailer and the brand.

But it doesn't build brand equity; it builds passive and almost thoughtless buying habits. We've all seen supermarket shoppers mindlessly reaching out for products and putting them in their carts. We congratulate ourselves on a category management job well done. Or at least a shelf management job well executed. But that is not consumer equity. It's habit. And habits shift to competitors with a new product or a better ad campaign or even a better shelf position.

Category management is a valuable tool and an approach to merchandising that is proven. It's time to build the concept to the next level—perhaps category forecasting management?

Consumer Insight columnist Phil Lempert can be reached at PLempert@SupermarketGuru.com.