Home Center Industry Isn't Sharing: Study

Manufacturers and retailers in the home-center market agree that category management systems will improve their sales results. But they differ on what the term means and how it should be achieved, according to a recent industry study."The Current Status of Category Management in the Home Improvement Industry", conducted by the Farnsworth Group, surveyed 41 retailers and 49 manufacturers in the home center channel. Its results indicated that the two groups have different goals for category management programs and are hesitant to share their data."The lack of information sharing is potentially the greatest threat to the success of category management in the home improvement industry," says the report's analysis, published in the Summer 1998 issue of Home Improvement Data magazine.Both sides agree information sharing is good -- as long as they aren't the one sharing. For instance, 94.7 percent of retailers said manufacturers using a category management system should share their total-category sales information, including that gained from competitive stores. But only 77.4 percent of vendors agreed this should be done.Similarly, only 36.8 percent of retailers said they should share their own competitive-brand margin and inventory/turnover information with vendors providing a category management system, while 63.4 percent of vendors said this should be done. And 47.4 percent of retailers agreed they should be sharing their total category sales information, while 81 percent of manufacturers said this should be done."At this point, how much anyone on either side is sharing SKU-level sales and margin data is questionable," says consultant Brad Farnsworth. "They certainly aren't sharing across brands, as some other industries do."

Home Center Industry Isn't Sharing: Study

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