The linchpin process in every Retail Category Management calendar is the Line Review or Category Review. Whether it is embedded in an annual budgeting process or stands alone, it is the point where every merchant is required to lay out the plans for delivering the required sales and profit dollars to the retail organization. Some merchandising organizations have a formal 3-month process and some buyers pull this out with a few all nighters. I’ve seen and done both and am of the opinion that neither approach guarantees any greater success than the other. What matters is the questions and the FOLLOW THROUGH on the plans.

    Here then are 5 questions that should be asked in every line review and for every category in every retailer:

    1. What problem does this category solve for customers and what else could do that for them? follow up with: What are you doing to get us into that business? (For example, if the review is vacuum cleaners, the problem being solved is “cleaning carpets, upholstery and flooring.”  Other things that could do that include a maid service and a carpet shampooing service.  Good Category Reviews spur on new business ideas that should keep a retailer’s new business pipeline filled for years.)
    2. Which of your vendors will be the first one to exit this business? follow up with: Why are we still doing business with them? (Good merchants identify long term players and vendors on the verge of becoming big early and jettison marginal vendors quickly.  It will build long-term category credibility in spite of short-term co-op funding hits.)
    3. What is being done in the stores to bring associates up to speed on your new items?  (Merchandising teams who devote themselves in service to Store Operations can get the necessary traction on new items to deliver their sales numbers.  Merchants who do not have Store Delivery plans will fail.)
    4. Who is the best online vendor of this category and why?  press on to: How are you meeting that challenge?
    5. What will you do if <enter name of fiercest competitor here> drops their prices to below cost to gain market share for 6 months?

    I don’t care if you are selling luxury watches or canned peas, these questions are relevant and important challenges every merchant and every merchandising executive need to understand after a successful Line Review.