Walk into any store today, or open any retail app, and it’s clear the “shelf” no longer lives in one place. It’s everywhere. It’s in-store, online, in search results, in sponsored placements, and increasingly inside retail media ecosystems. And yet, in many organizations, category management still operates as if physical and digital worlds are separate. That disconnect is costing retailers and brands more than they realize.
Category management used to be about optimizing shelf space, negotiating placement, and driving incremental sales within four walls. Today, it’s about managing an interconnected system where shopper behavior shifts in real time, and where decisions made online directly impact what happens in-store, and vice versa. If category strategies don’t evolve to reflect that, they quickly become outdated.
The Shelf has Become Behavioral
One of the biggest shifts in retail is that the shelf is no longer defined by its location; it is defined by behavior. A shopper might discover a product through a sponsored ad, compare options on a mobile app, check availability in-store and then complete the purchase later online. At each step, they’re interacting with a different version of the shelf. Category management has to account for all of it.
The data backs this up. According to McKinsey & Company, more than 70% of consumers now use multiple channels during their shopping journey. That means the traditional model of optimizing categories separately for in-store and online simply doesn’t hold up anymore.
What’s needed is a shift from static planning to dynamic orchestration. Assortment decisions, pricing strategies, and promotions should reflect how customers actually move across channels, not how the organization is internally structured.
A practical example of this shift can be seen in how shoppers engage with value channels, such as dollar stores. In one instance, digital search trends and retailer app data pointed to rising demand for value packs, as budget-conscious shoppers were increasingly planning trips and seeking larger formats to maximize value. However, the in-store assortment remained anchored in the traditional dollar channel model of lower absolute price point SKUs, creating a disconnect between shopper intent and shelf reality.
By aligning these digital signals with physical shelf decisions, introducing value packs and strengthening distribution, we were able to better-match how shoppers were actually buying. Importantly, analysis showed that average spend per trip was already in line with the value pack price points, reinforcing the opportunity. The result was improved conversion and incremental category growth, as we unlocked unmet demand rather than simply shifting share within the shelf. What initially appeared to be an assortment gap was, in reality, a reflection of evolving omnichannel shopper behavior.
Data and Retail Media are Reshaping the Playbook
Another major change is the role of data and retail media in category decisions.
Retailers now have access to more granular shopper data than ever before, from clickstream behavior to basket composition to real-time demand signals. At the same time, retail media networks are turning product visibility into a paid, measurable lever. This is fundamentally changing how categories are managed.
For example, product placement is increasingly becoming about digital visibility. Sponsored search results, recommendation engines, and personalized offers all influence which products are seen and purchased. According to Emarketer, U.S. retail media ad spend is expected to surpass $60 billion by 2027, highlighting just how central this channel has become.
For category managers, this means understanding which products are being amplified through retail media, aligning promotional strategies across paid and organic placements, and measuring performance holistically across channels.
It also means working much more closely with marketing and media teams, something that historically hasn’t always been the case. The organizations that are winning here are those treating category management and retail media as part of the same system, not as separate functions.
In practice, this shift becomes clear when retail media signals are integrated into category decisions. In one instance, analysis of retailer search and sponsored placement data showed that certain SKUs consistently achieved high visibility through paid placements but were underrepresented in primary shelf space and in secondary in-store displays. By aligning in-store visibility with these digital performance signals and coordinating promotional support across both paid and in-store touchpoints, we were able to improve conversion and drive incremental category growth. This reinforced that retail media is not just a marketing lever, but a leading indicator of demand that should directly inform category strategy.
From Planning to Continuous Optimization
The old cadence of category management, annual reviews, periodic resets, and static planograms is increasingly out of step with how retail actually operates today. Shopper behavior changes too quickly. Demand signals shift too often. Competitor actions happen in real time.
What’s needed now is a more continuous, test-and-learn approach. This doesn’t mean abandoning structure. It means building systems that allow for faster feedback loops and more agile decision-making. That includes using real-time sales and inventory data to adjust assortments, testing pricing and promotions dynamically and aligning in-store execution with online performance insights.
It also means redefining success metrics. Instead of focusing only on category-level sales or margins, retailers should evaluate performance across the entire customer journey, including cross-channel conversion rates, basket sizes across touchpoints and incremental lift from integrated campaigns.
According to Harvard Business Review, companies that effectively integrate online and offline experiences see higher customer lifetime value and stronger loyalty. That’s the real prize, not just optimizing a single channel, but creating a cohesive experience that drives long-term growth.
In practice, this shift toward continuous optimization becomes clear in how promotional and assortment decisions are managed over time. In one instance at a leading value channel retailer, rather than locking in a fixed promotional calendar, we used weekly sales, inventory and store-level performance data to continuously refine execution. Underperforming SKUs were deprioritized in promotions and display space, while higher velocity SKUs received increased support and distribution. At the same time, promotional depth was adjusted in real time, scaling back where elasticity was low and reinvesting where returns were strongest.
Over successive cycles, these adjustments compounded, improving on-shelf availability, increasing promotional efficiency, and driving sustained category growth. The impact was not driven by a single reset, but by a series of faster, data-informed decisions that kept the category aligned with evolving demand.
Where Category Management Needs to go Next
The reality is that category management sits at the intersection of data, shopper behavior, merchandising and media. And as those areas continue to converge, the role itself needs to evolve.
Retailers and brands that rethink category management for today’s omnichannel reality will make more informed, data-driven decisions, respond faster to changing demand, and create more seamless customer experiences. Those that don’t will keep optimizing for a version of retail that no longer exists.
The opportunity here is significant, but it requires a shift in mindset, from managing categories as isolated units to managing them as part of a connected ecosystem. That’s where the next wave of growth will come from.
Aziz Jafri is a CPG commercial leader with over 15 years of experience driving growth across category management, trade marketing, and revenue strategy in global markets. He has held leadership roles at multinational organizations, including Reckitt, AkzoNobel, Nokia, Rose Petal Tissue & SC Johnson, with experience spanning the United States, United Kingdom and Pakistan. Aziz holds an engineering degree and an MBA, and has received multiple industry awards recognizing his contributions to commercial strategy and thought leadership.
