With 25 years of experience in Category Management at Aldi, Shell, Thalia and Denner, and clients of McKinsey, Markus Schröder offers a unique perspective on today’s retail challenges. We spoke with him to enrich the development of Zenline’s AI Agents. Here are his most important insights on Category Management:
Markus, you have gained more than 25 years of experience in retail – from Aldi and Shell to Thalia and Denner – Which experiences have shaped your understanding of Category Management most?
I am very grateful that I have had the opportunity to practice Category Management in many different contexts over the past 25 years. What I have learned is this: There is no “one-size-fits-all” approach to Category Management. It makes a fundamental difference whether you optimize a beverage assortment for petrol convenience or plan the assortments for the market entry of an international discounter. At the core, it is always about the shopper, about understanding occasions and positioning yourself effectively against the competition. What really helps are fast, clearly structured insights and tools like Zenline that adapt flexibly to different category contexts and provide exactly the insights that are relevant for the situation at hand.
Looking back over the past 25 years: how has the role of the Category Manager evolved, and which capabilities are essential today?
Twenty-five years ago, Category Management in Germany was mostly executed as project work between manufacturers and retailers. Many initiatives had a pilot-type character: manufacturers were the main driving force, while most retailers were still strongly shaped by traditional buying departments. Other markets, such as the UK or the US, were already more advanced, with retailers like WalMart or Tesco pushing the discipline further.
A lot has changed since then. Retailers, especially in grocery, have built dedicated teams and systems for Category and Shopper Insights, complemented by additional solutions for planograms, pricing, and promotions. On the buying side, the rise of global sourcing alliances and centralised procurement departments has also significantly altered the landscape.
Today, Category Managers operate far more as generalists. With a wide range of systems and interfaces at their disposal, they effectively hold a “Swiss Army knife” of tools that must be used as efficiently and effectively as possible. Two aspects are particularly important in my view:
- The ability to derive strategies and tactics from Shopper and Category Insights
- The growing number of interfaces and stakeholders requires strong soft skills – such as stakeholder management, change management, and the ability to communicate a clear story both internally and externally.
Many Category Managers still rely heavily on Excel. In your view, what are the biggest weaknesses of this Excel-based way of working?
First of all, Excel is a very flexible tool and extremely useful when you need to analyse numbers in a needs-based, ad-hoc way. I also use Excel frequently for category case work, for example for simulations or to calculate the size of the price.
However, I see three major weaknesses in the day-to-day work of Category Managers:
- First, the lack of standardisation: A standardised reporting framework is essential to identify trends and opportunities quickly. On top of that, producing these reports is time-consuming, highly error-prone, and can result in misleading or arbitrary conclusions.
- Second, the limitations in analytical perspectives: A true 360-degree view with multiple angles and drill-downs is essential to understand the deeper drivers of performance deviations. Excel only supports that to a limited extent.
- And third, the limited data capacity: Excel quickly reaches its limits when dealing with more complex yet highly relevant analyses, such as penetration rates or basket analyses.
What difference does it make for Category Managers when concept development, forecasting and tracking all come from one integrated source – instead of being fragmented across multiple tools?
This creates a major efficiency gain for any Category Manager. Developing concepts with the support of AI provides greater credibility due to a comprehensive 360-degree view, especially when incorporating structured and already-structured external trend data. Faster concept creation also helps with internal alignment and external communication (e.g., with suppliers) and significantly shortens the time to market.
When I develop a concept, I can run a forecast immediately and then track performance after implementation within the same environment. This avoids media breaks, data inconsistencies and manual copy-and-paste across systems. I see immediately whether my assumptions from the concept phase materialise creating a closed feedback loop that enables continuous learning.
And last but not least: Developing and executing new concepts is highly motivating for every Category Manager. It is far more stimulating than the large volume of administrative tasks that often dominate day-to-day work in many retail organisations.
You emphasise the importance of deep Shopper and Category Insights. Can you give an example of a situation where these insights made the decisive difference?
For me, the starting point is always hypothesis-driven and ideally top-down: What do I believe are the biggest opportunities in my category? What is my fair share? How high is the penetration? What customer behaviour do I see regarding basket size, promo share, and so on, and what tactics derive from that?
For example, in my work with category teams in the petrol convenience, we identified markets with already very high penetration of energy drinks. Our focus therefore shifted to driving basket size (e.g., through 3-for-2 promotions, multipacks, etc.) or leveraging the category’s strength to support adjacent areas (cross-selling, merchandising, bundles, and so on).
Zenline promises to make assortments more shopper-centric and more profitable. Based on your experience, how realistic is that and where do you see the biggest levers?
I am convinced that Zenline enables an entirely new perspective on assortments, like: How am I positioned in category XY across different price tiers? How does this compare to competition? Where do I see cannibalisation between brands or price ladders? In which direction are trends moving, internally as well as externally?
Assortments become more shopper-centric because integrated shopper insights reveal which needs, missions and occasions are being served and where the gaps are. Profitability increases because cannibalisation is reduced, low-performing items are identified faster, and assortments can be better balanced between reach and margin.
“Retail is detail.” There is rarely one single big lever; rather, it is the combination of many measures, driven by insights, creativity and disciplined execution, that delivers real results.