How to operate a qualified category?

Category operation is also called product operation . This position is relatively special and is generally only available in companies engaged in e-commerce business.

In recent years, with the rapid development of e-commerce and the development of POP stores on large platforms (Taobao, JD.com, etc.), more and more people are engaged in category operations, and the proportion of category operations among the operating population is increasing.

As a member of the category operation team, I would like to briefly share the basic situation of category operation.

1. What is category operation?

1. What is category operation?

Category operation is derived from the e-commerce module, because e-commerce has many categories (industries). As the business grows, the categories need to be divided and operated.

Baidu Encyclopedia defines category operations as:

It means that the category manager is responsible for the category structure of the e-commerce website. He or she listens to the voices of category users, tracks all relevant data of the category, discovers problems that hinder the development of the category, and cooperates with the quality, marketing, product and other departments to solve the problems, establish a more active and effective market, and serve the tens of millions of users of the e-commerce website.

A senior operator once summarized the concept of category operation very well:

Category operation refers to the use of all human means to improve the KPI of the category and its share of transaction volume in all industries through planning of products (categories), product selection, product promotion, event themes and other dimensions.

2. Goals of Category Operations

The goal of category operation is to increase the GMV of the category you are responsible for.

GMV, or total transaction volume. All operational work is carried out around the annual GMV target, which is then broken down into monthly, weekly, and daily targets.

2. Category Operation Work Content

According to the classic formula for calculating total transaction amount:

Sales = traffic × conversion rate × average order value × (1 + repurchase rate)

In order to achieve the overall GMV goal, the daily work of category operations will also focus on the following work content:

1. Get traffic

That is, the traffic reaching the products in the category you are responsible for, including the maximum exposure, PV, UV, etc. for the products in the category.

Traffic is generally acquired through main site promotions and category activities. Main site promotions are promotions of large-scale comprehensive categories of the S, A, and B levels of the platform, which generally require the assistance of various categories to participate. At this time, category operations need to strive for corresponding entrances and product exposure positions for the category to assist in the promotion. Category activities are large-scale promotional activities independently launched by the category based on the characteristics of the category, such as Valentine's Day gift-giving activities for light luxury jewelry and New Year's Festival activities for food and beverages.

2. Increase or maintain average order value

Each category has its own unique average order value. The average order value of a category is generally affected by the following factors:

• Platform user characteristics: that is, the main user type of the e-commerce platform. For example, NetEase Yanxuan's users are mainly white-collar workers with relatively high average order value. Pinduoduo mainly targets low-end users, so the average order value is relatively low.
• Category characteristics: For example, the average order value of digital home appliances is higher than that of household daily necessities.
• Price range of the main products promoted in the category: Each category has products in low, medium and high price ranges. For example, major sports brands such as Adidas and Nike are of higher grade and higher prices; while the brand grade and price of Xtep and Warrior are relatively low. When Adidas and Nike products are the main products promoted, the average customer spending will be higher than when Xtep and Warrior products are the main products.

The average order value of a category generally has a normal and reasonable level based on the platform and category positioning. Generally speaking, category operations should appropriately balance the relationship between the number of orders and the average order value while ensuring GMV.

3. Increase conversion rate

That is, to analyze and optimize the conversion rate of the entire purchase chain from exposure to ordering.

Mainly based on the AARRR model, the conversion effect of the entire process of optimizing exposure - product details page - specification selection - order page - payment is analyzed, and problematic links need to be specially optimized.

4. Increase repurchase rate

In the era of traffic inventory, many e-commerce platforms attach great importance to repurchase rate. Studies have shown that nearly 75% of e-commerce companies with poor sales have no user repurchases in the early stage; and three years later, 50% of the company's sales come from repeat purchases. Therefore, repeat purchases contribute greatly to GMV.

For category operations, it is necessary to maintain old users, conduct regular user recall activities, and increase the repurchase rate of the category.

5. Carry out daily product management

Mainly include:

• Pre-sales: listing and delisting, inventory maintenance, product title and details page optimization, etc.;
• During sale: including price monitoring (price comparison), activity price setting, etc.;
• After-sales: including monitoring of data such as returns, compensation, product reviews, and reducing after-sales rates.

3. How to be a qualified category operator

1. Familiarity with the user

Users are the center of category operations and the source of everything. Whoever wins the consumers wins the world. Therefore, as a category operator, you need to understand the attributes and user needs of the platform and your own category.

User attributes include age, occupation, gender, region, consumption level and other labels. These labels determine consumers' needs and value propositions, which in turn affect our product strategies and planning.

User demand is the foundation of category operation. It is necessary to conduct portrait analysis based on user attributes and characteristics, understand user demand for products in specific scenarios, and push marketable products to users based on user needs.

For e-commerce businesses that are just starting out, category operations’ understanding of users and user needs is based on data analysis. User portraits are relatively vague, and the main products are selected based on operational experience.

After a period of operation, the products in the category have a certain fixed customer base. Category operations need to re-recognize consumers to make user cognition more concrete and thorough, user portraits clearer, and user needs more specific.

When the platform is mature and stable, it needs to combine multiple means to understand consumers and consumer needs at a high frequency, and it also needs to be able to respond quickly to consumer needs, so as to better attract and retain customers.

2. Familiarity with the market

A category is equivalent to an industry, and category operations are closely related to the industry in which the category belongs.

An industry veteran once said that to be able to do a good job in category operations, one must immerse oneself in the category for at least three years. This just shows how important it is to understand and recognize the industry for category operations.

This requires that when operating a category, one must understand the market situation of that category, such as market size, growth trends, corresponding consumer attributes, upstream and downstream relationships in the industrial chain, category giant brands and their respective shares, etc. The more thorough the understanding of the market and the deeper the cognition of the category, the easier it will be to find suitable products to meet user needs.

3. Be familiar with traffic

Whoever gets the traffic wins the world.

Therefore, we must fully understand the traffic distribution of the platform, the characteristics of each resource position and exposure position, arrange activities and goods according to the traffic size and user attributes of different exposure positions, utilize the traffic of each position in the most efficient way, and do a good job of corresponding traffic acceptance to improve the conversion rate of each link.

4. Be familiar with the products

Being familiar with products is the most basic task in category operations, which includes being familiar with the product calendar, product role classification, product life cycle, product width and depth, and product structure analysis.

Product calendar: The product calendar is the promotion time node for all categories of products on the platform. For category operations, it can grasp the platform's product promotion rhythm throughout the year and guide merchants' product plans (including product inventory and supply chain). The product calendar should be planned in a detailed weekly dimension and adjusted and reviewed on a monthly basis. A good product calendar can enable product operations, platforms, and merchants to collaborate efficiently to meet consumers' user experience.

Product role classification: refers to the role played by a product category. The simplest way is to divide the products into main products, traffic-generating products, expensive products, and general products according to the four-quadrant method.

There are also more complex role classification methods, which need to be interpreted and refined in combination with the actual operational needs of the platform. For example: the platform needs to divide the product roles according to the online traffic situation and the sales attributes of the product, including flagship models, traffic-generating models, expensive products, high-conversion models, potential models, seasonal models, etc.; from the perspective of product sales attributes, the product roles are divided into: main products, auxiliary products, competitive products, popular products, basic products, trial products, etc.

Product life cycle: A product also has its product life cycle. The general product life cycle includes four stages: listing, growth, maturity, and decline. Understanding the product life cycle can guide us in choosing product promotions, activity forms, and resource matching at different stages.

Product structure: The analysis of product structure mainly starts from the category attributes and user decision-making dimensions. The main contents include but are not limited to the composition of sub-category products, the proportion of TOP products, price range distribution, brand distribution, etc.

5. Be familiar with various e-commerce marketing activities

In addition to daily merchandise sales, we want to achieve GMV targets. The platform generally has a variety of marketing activities. The main forms of activities include flash sales, direct discounts, full-price discounts, full-price free gifts, full-price returns, multiple discounts for multiple items, N yuan for M items, etc. Therefore, category operations must be familiar with the basic gameplay and characteristics of various marketing activities, and create category-specific operating methods; for example, the N yuan for M items format for food, and multiple discounts for multiple items for clothing.

In addition, you should also be familiar with the event times of major marketing nodes so that you can prepare marketing activities in advance.

6. Product selection ability

The most important thing in category operation is product selection, and whether the product selection is good enough depends on the several "familiar contents" mentioned above.

When selecting products, you need to consider market attributes (seasonal products, hot products), product attributes (price, promotion method, whether it matches the users, high frequency, rigid demand), promotion attributes (channel distribution, marketing methods, promotional materials, etc.), and user attributes (products must match user characteristics and needs). If the product selection is good and the main products are all hot-selling products, it will be easy to achieve the GMV target.

The above is my sharing content, which mainly revolves around what category operation is and how to be a qualified category operator. It is relatively simple and I hope the comparison will be helpful.

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Author: Hiphop Village

Source: Hiphop Village