How to choose a category management tool for retail: a complete checklist

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  • Aug 23, 2023
  • 10 min read
Cover: How to choose a category management tool for retail: a complete checklist

We all know that choosing the right category management tool can significantly impact the success of a retail business , but oftentimes it is not easy to make the right choice. That is why we have created a checklist – a set of clear steps to help you select the best platform for your company and your needs.

The Ultimate Checklist

1) Analyze the problems and set a goal

According to a report by McKinsey & Company, an optimized assortment can increase sales by 2–5% and profitability by 5–10%, so implementing a category management tool is a strategically important step.

Therefore, step one is to define your business problems and goals clearly by:

  • analyzing the current state: You should collect and study data on the current assortment, existing management processes, and management solutions already in use. Highlight the strengths and weaknesses of the current system, and identify the challenges your business faces.
  • setting goals: Set clear expectations for the category management tool. This could be increasing sales, improving administration processes, optimizing the assortment, increasing customer satisfaction, etc.
  • listing the main required functions of the system: Apart from category management, you might also need assortment planning, sales analytics, inventory management, and customer demand analysis.

Don’t forget to include information about your business size, product types, number of stores, target market, and any particular challenges you face. This will help you understand what features you need and how they should address your specific challenges.

2) Evaluate the integration options 

Make sure that the system you choose can efficiently work with your company's existing programs and tools. This is a critical aspect of your selection. Successful integration will ensure uniform data exchange and efficient operation of all systems. The following are the main factors that can be used to evaluate the possibility of integration.

APIs and standards

Make sure that the category management tool provides documentation and APIs that will ensure secure data exchange with any other tools you are using.

Compatibility with existing applications

It is important to check that the chosen platform is compatible with your current accounting system in order to exchange data easily and accurately.

Data and security

When integrating systems (especially if they process confidential information), it is important to be certain that the data is protected. The chosen platform must offer the necessary security options, as well as mechanisms for resolving possible data conflicts.

Technical support

Pay attention to the service level provided by the system vendor. Make sure that they are ready to help with integration, training, and problem solving. There is nothing worse than being left in the cold by your provider during a critical phase of the implementation.

3) Think about the future

Your category management tool will stay with you for a long time so it should be able to scale with your business. The solution needs to fit your current needs as well as your future expansion plans.

That is why the system you choose must be able to handle large amounts of data efficiently. Business growth is always associated with an increase in the product range and sales figures. Therefore, it is important to process such information in a timely manner. It is possible that you will need additional tools or options in the process and the integration of new functions and modules should be easy and fast.

You might want to expand the product categories in your network in the future. Therefore, make sure that the chosen system is able to work with different types of goods and their characteristics. The same goes for new branches or sales channels. Maybe you will need a platform that can support and coordinate offline and online sales. Think about it based on your business strategy.

In retail chains, category management tools are also used by several specialists at the same time. So the tool has to support multitasking without losing speed and efficiency.

A Pro tip: if you are a global company (or you are aiming to develop an international market), choose a system that can operate with different languages and currencies.

4) Check out the interface

An intuitive interface will simplify the user experience and optimize the time it takes to load data, set up, and get results. The term "user-friendly" is used a lot when talking about interfaces, but this is what it really means:

  • It is easy to use and has clear navigation. No extra effort is required to understand the basic functions. This reduces the number of user errors. However, it is worth noting that almost every modern system requires at least a short training. 
  • Customization and personalization is available. This increases the efficiency of using the platform. 
  • Convenient access to sales, inventory, product range, and other information is a given, i.e., expect clear graphs, charts, and reports.
  • Cross-platform compatibility. The system interface should work smoothly on different types of devices.

5) Learn about the data management capabilities

The system typically collects and integrates data from various sources to provide comprehensive information about sales, demand, inventory, and customer behavior. If that is the case, you also need powerful tools for analyzing demand and forecasting sales. The use of analytical methods will allow you to predict changes in demand and adjust the assortment to meet the needs of your consumers.

The effectiveness of the assortment, being able to determine popular products and identify those that are not selling well, is also key, and only advanced data analytics options will help you make informed decisions about assortment management, product procurement, promotions, and sales strategies.

Other important functions:

  • customer segmentation by various criteria to develop personalized offers and marketing campaigns;
  • convenient access to reports in the interface;
  • fast processing and analysis of large volumes of data to respond quickly to changes and make instant adjustments to sales strategies.

The future of assortment optimization lies in the use of advanced technologies. Artificial intelligence (AI) and machine learning (ML) algorithms can work with significant data volumes and provide accurate results. We recommend choosing platforms based on such technologies.

For instance, LEAFIO Assortment Performance uses both modern AI and ML technologies to improve the efficiency of assortment management. In particular, the platform collects and integrates data from various sources, clusters stores based on common characteristics, analyzes assortment performance, and provides tips for improvement. 

6) Explore customization options

It is essential to have the ability to adapt the system to the specific needs of your business . Being able to do so ensures flexibility and efficiency in assortment management. 

Here are some key questions to consider when evaluating customization options:

  • Do you need to customize the interface for different users, because each employee has their own needs and tasks?
  • Do users have different responsibilities and require different access levels?
  • Do you often need to add fields and attributes for goods and customers?
  • Do you need to utilize the entire system all at once or just certain parts in order to avoid wasting resources and time on unnecessary functions?

7) Learn how support and training processes are organized

Vendors should provide users with access to training materials and instructions, as well as live consultations to resolve atypical issues. It is crucial to receive support throughout the entire system usage cycle or else the system may become another complication.

The provider should provide detailed user materials that include instructions on how to use and configure the system. Alternatively, it could be online resources where the content is created by an active community of users and experts.

The developer should conduct training to help your employees learn the system and use its functionality effectively. At the same time, you need to have access to technical support that will be ready to help with any technical issues. For example, the LEAFIO Retail Platform team provides training on how to use the system, and offers users a wide range of training materials and live support, which allows its clients to quickly master the system.

Make sure that the system provider regularly introduces updates and improvements that will help your business stay efficient. Make sure you have a documented support policy.

8) Pay attention to the SaaS orientation

It is advisable to choose a system based on the SaaS (Software as a Service) model. Firstly, it is cost-effective because it only requires the payment of a subscription fee and no significant upfront costs. This is especially valuable to small and medium-sized businesses with limited budgets. SaaS providers guarantee regular updates and support, simplifying the process of solving problems and automatically providing software updates.

In addition, SaaS allows businesses to use resources efficiently. There is no need to invest significant amounts in infrastructure maintenance. Easy scalability is another advantage: as you grow, you can increase or decrease your subscription level as needed. SaaS reduces risks by offering flexibility and lower financial commitments compared to traditional license purchases.

Related: A new level of merchandise planning: from BI to category management automation

9) Calculate the ROI

Investing in the system should be considered as a long-term project. Estimate the cost of implementing a category management tool and the expected benefits. 

  • Estimate the system acquisition cost, which includes licensing costs, integration, setup, and staff training. Some vendors may offer a subscription-based payment model, while others require a one-time payment or a combination of these approaches.
  • Consider the operational costs of maintaining and updating the system, maintenance costs, and other operational issues.
  • Determine how the system will benefit your business: cost-reducing features and capabilities, expected increase in sales, product mix optimization, and customer satisfaction improvement.
  • Analyze the return on investment. Calculate how long it will take to recoup costs and what the net profit will be after implementation.

11) Put the provider under the microscope 

The reputation of the vendor is vital. It points to its reliability, quality, and system support, as well as its ability to meet the needs of your businessFirst, find out how many years the vendor has been on the market and what experience they have in providing retail solutions. Check out its successful projects and partnerships with well-known companies.

Second, look for reviews from other customers. Real opinions from users will give you a clearer picture of the advantages and disadvantages of the system. It is independent platforms who collect customer feedback and form ratings of market leaders. For example, LEAFIO AI Retail Platform is among the TOP 5 retail assortment planning systems on

Third, consider the cooperation with a supplier as a strategic partnership. The supplier should be ready to work together with you to achieve your common business goals and support you in your development.

12) Check the update policy

Technological advances and changing market conditions require continuous software development. Make sure your system provider releases regular updates. They can be related to functionality improvements , bug fixes, security updates, etc. However, you should be clear on: it is important to clarify the following points:

  • how the update process is performed (automatically or after certain actions on the part of the user);
  • whether the vendor checks the service packs before releasing them (stability and security tests are especially important);
  • whether updates will affect your settings (especially if they are personalized);
  • whether there is a schedule for releasing updates and how the vendor's team supports this process (e.g., through consultation, warnings, backward compatibility).

13) Learn about process automation

Automation of business processes ensures efficient administration, reduces the risk of human error, and increases productivity. Specific principles of automation include:

  • Centralization of information on sales, inventory, and other factors. The advantage is accurate and up-to-date data for making management decisions;
  • Smart category management. Deep analytics provide a wide array of data from all levels of the category to understand which items/stores are not performing well and vice versa;
  • Automatic data analysis. The advantage is a simple identification of popular and problematic products, the ability to more accurately plan new purchases, and put together a more profitable assortment at retail outlets;
  • Transparency of reporting: each participant in the assortment management process should have unbiased information about the state of affairs at a particular time at her disposal;
  • Efficient procurement and supply planning give you the advantage of cost optimization and reduction of shortages and surpluses in the warehouse;
  • Control over the availability of goods. The advantage is the optimization of turnover processes, an accurate understanding of the volume and location of products.

There is no need to be concerned that automation will lead to layoffs as it is commonly believed. Instead, automation will free the team from a large number of routine tasks and allow them to focus on solving strategic issues, which will lead to an overall growth.


The global retail analytics market (which also includes assortment optimization solutions) is expected to reach $23.8 billion by 2028. It is developing rapidly and cannot be ignored. Successful selection of a category management tool means finding a balanced combination of functionality, integration, scalability, support, vendor reputation, cost, and automation that will ensure optimal results and increase retailers' competitiveness.

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