Behind the scenes
More AI, more price transparency – dispatches from Hackfest
by Martin Jungfer
Category what?
20.2.2020
Translation: Jessica Johnson-Ferguson
Pictures: Manuel Wenk
For many at Digitec Galaxus, Category Management is a black box. What around 200 employees actually do is a riddle wrapped up in an enigma. I asked around in their department, eager to find out what their daily business has in common with Super Mario and his brother Luigi.
Ask employees at Digitec Galaxus what Category Managers do, and you’ll get a lot of vague replies. Expect things like «aren’t they the ones who plan Black Friday deals» or simply «they work on the fourth floor». Most people I asked struggled to give a general definition.
So what is it that «the people on the fourth floor» in Zurich’s Westpark office building do? Stefan Fraude, Head of Category Management IT + Lifestyle summarises it as follows:
«We have three main tasks: The first one is to establish the ideal level of availability of goods at our warehouse in Wohlen. This is achieved by making cost-efficient deals with manufacturers and distributors and buying the right amount. In technical jargon, this is called «sell-in». The second one is to sell the products by means of product marketing (including SEO), a well-maintained and tidy online shop and attractive price-setting or «sell-out». This also includes our deals of the day and Black Friday offers. What’s key is striking the perfect balance between sell-in and sell-out. In other words, ensuring that there are always enough goods available at the right price, on the one hand, and that our warehouse is not bursting at the seams, on the other hand. The third task is category development. This mainly involves introducing new products to our online shop via merchants or manufacturers and automating the processes with these partners as much as possible.»
Moustaches!
When it comes to their work, Stefan and his category managers draw parallels to the classic video game Super Mario Bros.: the goods purchasers are referred to as Luigis; the goods sellers as Marios. The plumber brothers want to send as many products as possible through their pipe system (the online shop) to their happy customers (the demanding Princess Peach). The engineers of the pipe system are our Category Developers. The challenge they all face is to keep suppliers and merchants (Koopa Troopas) on their toes. What’s more, they want to eliminate manual steps (Goombas) and turn them into scalable solutions by means of automisation (mushrooms). The ultimate goal of Mario, Luigi and the engineers: making Princess Peach happy.
It's a-me, Mario!
Enough of the start menu, let’s get into the game! First up, we meet Osman «Luigi» Erdogan at sell-in. Next up, there’s Claudio «Mario» Mohr at sell-out and, last but not least, pipe engineer Xenia Löffelholz. These three platform leaders describe their levels as follows:
Osman:
«In Category Buying, our job is to ensure that we stock up on the right products at the right time to avoid customers having to wait longer than necessary for the products they want. Today, 80 per cent of our products are purchased automatically.»
Claudio:
«In Category Marketing, we set the prices of our product range, plan promotions and present new products in our shops. Much of the pricing is now automated. Naturally, we’ve always got an eye on the competition. We’re also constantly refining our product categories. Our aim is to create an environment in which customers not only intuitively find the products they’re looking for but also have all the necessary product data at their disposal to help them make their purchase decision.»
Xenia:
«In Category Development, we are in charge of expanding the product range. We look for new suppliers and merchants and onboard them. In addition, we expand existing partnerships via interfaces and automate things wherever possible.»
Doing the speedrun
And what’s the game like to play? How do you unlock new levels? What are the biggest challenges? I found answers in the various departments; answers given by four Digitec Galaxus newbies, who only recently started working for the company:
Buyer Silvan Liechti from DIY + Garden:
«After an intense start in a well-rehearsed garden team, I have found my spot. Looking back on a suboptimal 2019 season with the suppliers from the pool and BBQ sector provided me with a solid foundation for my work in this area. Now it’s on to planning 2020 with a healthy aversion to «bad weather excuses».
Marketeer Seraina Lanfranchi from DIY + Garden:
«We’re currently working on becoming more established in customers’ minds as a pet supplies provider. This includes making the range available at attractive and competitive prices. Our cat TV ad helped us boost sales.»
Developer on the supplier side, Pascal Achermann from Health + Beauty:
«In recent weeks and months, we’ve been busy working on closing gaps in our health and beauty range – we now have more products than ever before. Establishing new partnerships definitely helped. We are now also working on our efficiency. The relationships with existing suppliers are optimised and we’re automating what can be automated.»
Marketplace developer Cynthia from Fashion:
«Last year was all about expanding our shoe range. It’s a range that grew very rapidly. That’s why we’re acting on all fronts to improve product data quality. Our aim is also to improve the presentation of our range. This year, we are focussing on the integration of new merchants in the fashion sector.»
Wahoo!
Alex Hämmerli
Senior Public Relations Manager
Alex.Haemmerli@digitecgalaxus.chAt Digitec and Galaxus, I’m in charge of communication with journalists and bloggers. Good stories are my passion – I am always up to date.
