---
title: "Beyond Store Revamps: The Retail Industry Needs 'Category Management'"
description: "Amid deep transformation in the retail industry, 'store revamps' have become a hot topic. Facing sluggish consumption, intensifying competition, and channel fragmentation, relying solely on low prices and imitation is no longer sustainable. How to navigate cycles through retail technology, product strength, and operational methods is a shared concern. On August 20, at the 5th China FMCG Retail Innovation Conference, Zhang Zhiqiang, a 30-year retail veteran, co-author of 'Category Management', and founder of Yuanzhi Category Management, used his practice and insights on 'category management' to systematically explain the core issues retailers should focus on beyond store revamps."
author: "张智强"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-09-03"
categories: "Consumer & Categories, Management & Methods"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/bC1rT5P__W6adWkbIYDkTw"
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citation: "张智强. “Beyond Store Revamps: The Retail Industry Needs 'Category Management'.” New Distribution, 2025-09-03. https://xinjignxiao.com/en/articles/beyond-store-revamps-the-retail-industry-needs-category-management-9924506b/"
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# Beyond Store Revamps: The Retail Industry Needs 'Category Management'

> Amid deep transformation in the retail industry, 'store revamps' have become a hot topic. Facing sluggish consumption, intensifying competition, and channel fragmentation, relying solely on low prices and imitation is no longer sustainable. How to navigate cycles through retail technology, product strength, and operational methods is a shared concern. On August 20, at the 5th China FMCG Retail Innovation Conference, Zhang Zhiqiang, a 30-year retail veteran, co-author of 'Category Management', and founder of Yuanzhi Category Management, used his practice and insights on 'category management' to systematically explain the core issues retailers should focus on beyond store revamps.

Amid deep transformation in the retail industry, 'store revamps' have become one of the most watched topics. Facing sluggish consumption, intensifying competition, and channel fragmentation, relying solely on low prices and imitation can no longer support long-term development.
How to navigate cycles through retail technology, product strength, and operational methods has become a common concern for the industry.
On August 20, at the 5th China FMCG Retail Innovation Conference, Zhang Zhiqiang, a 30-year retail veteran, co-author of 'Category Management', and founder of Yuanzhi Category Management, used his practice and insights on 'category management' as a starting point to systematically elaborate on the core issues that retail enterprises should pay more attention to beyond store revamps.
The following is his on-site speech (slightly abridged), compiled by New Distribution for readers.
## **Yuanzhi Category Management**
I have spent 30 years of my career in the retail industry, working with international, state-owned, and private enterprises, mainly in physical retail. I am the partner in China of Dr. B. Harris, the founder of category management, and last year co-authored the book 'Category Management' with him. When communicating, our company always emphasizes 'Yuanzhi Category Management', which differs from what you might understand from books; we call it 'Yuanzhi Category Management'.
Today's sharing starts with the topic of 'store revamps'.
Supermarket revamps have been the most watched phenomenon in the retail industry over the past two years. Even Pangdonglai has become a well-known brand for helping other retail enterprises with revamps, and is regarded as a particularly wonderful company, held in high esteem. Many retail practitioners also see Pangdonglai's revamps as a hope for the industry.
At a time when the entire retail and consumer goods industry faces huge challenges, revamps have become one of the ways out.
Many enterprises that have maintained rationality and carried out reasonable revamps during this learning process have benefited.
But there is also another situation: retail enterprises across the country are mechanically following suit, even directly moving Pangdonglai's products into their own stores.
For example, some enterprises last year placed Pangdonglai's big mooncakes in their stores for sale, resulting in losses due to imitation, estimated at tens of millions of yuan.
## **The Gap in Technology Retail**
More than thirty years ago, the development of modern retail in China was greatly inspired by Carrefour.
Carrefour opened its first supermarket in Beijing at the end of 1999, and many domestic enterprises followed suit, including the well-known Beijing enterprise Tiankelong. In August 1999, Tiankelong, as a representative of Chinese retail going overseas, opened a store on Arbat Street in Moscow, with support from both China and Russia, and was even specially mentioned during high-level talks.
In 2000, I went to Moscow to visit Tiankelong's overseas store. After returning, at a meeting, I summarized my impressions: the Tiankelong in Moscow and the Carrefour in Beijing were superficially similar—both sold Chinese goods, employed Chinese staff, and had a customer base mainly of Chinese people. But this similarity masked essential differences.
An important figure at Carrefour, Shi Rongle, once pointed out that Chinese retail had not yet entered the era of 'technology retail'. Facts have proven that in Carrefour's 24 years in China, from an initial investment of 80 million, it reached 6.4 billion at the time of final sale, with asset growth exceeding 100 times, clearly ahead of local retail enterprises.
Look at Walmart, which has more than 300 stores in China, including over 50 Sam's Club stores, and the general manager is Chinese. The entry of Costco and Aldi also shows that they possess retail technology different from that of Chinese enterprises. Domestic enterprises mostly have a 'copy system', while international enterprises master core retail technology.
Retail technology can be summarized in two areas:
> First, how to attract customers through stores;
>
> Second, how to efficiently transfer goods from suppliers to customers, including response speed, cost, and profit.
Factors affecting customers are not just price, but also the products themselves, promotions, and displays.
> The role of price also varies in strength; not all prices affect customers equally.
>
> Promotion is not simply selling goods, but making customers willing to visit again.
>
> Display is not just arranging items, but both making it convenient for customers to find what they need and promoting the sales of products the merchant wants to sell.
## **The Core of Category Management**
In the 1990s, American retail enterprises experienced a store surplus similar to that in China today. At that time, they turned to a deep understanding of consumers and widely applied the 'category management' proposed by Dr. B. Harris.
The core logic of category management is: **enhancing economic efficiency by delivering consumer value**.
Stores must first make customers like them before they can bring benefits. Categories are the basic business unit, and product planning and operational control should be based on this. Retail enterprises need to work closely with suppliers, share information and understanding of customers, and jointly complete product delivery.
Category management has been applied globally with significant results, especially emphasizing the relationship between products and customers. Products have never existed in isolation. Its application in China has even exceeded that in Europe and America, but many peers have misunderstandings. The true 'starting from the consumer' is not replacing consumer preferences with the operator's personal experience, but judging based on needs and data.
For example, in hypermarkets, ambient milk and chilled milk, yogurt and milk, are often displayed separately. But if adjusted to concentrate chilled and ambient milk together, while separating yogurt and milk, it better aligns with consumer shopping logic. Practice has shown that such adjustments typically lead to significant sales and profit improvements within a month, and gain supplier support.
Customers' judgment of a store is often related to immediate needs. In consumer in-store shopping psychology, there is a 'frequency illusion', where judgment is based on immediate needs rather than overall impression. Therefore, operations should also be based on categories.
Category management emphasizes that products are not just nouns, but verbs.
Retail operators must understand customer perception, go beyond needs, and form the enterprise's operational capability. This is 'product strength'. In Western concepts, retail is a performing art, the store is the stage, products are the actors, and operators are the scriptwriters and directors. The task of retail operations is to use products to interpret the beauty of life for customers.
## **The Value of Category Management**
To make stores liked and revisited by customers, it must be based on categories:
> Category optimization: use better single products to make customers feel affordable while ensuring gross margin;
>
> Promotion: highlight store advantages, not just clear inventory;
>
> Display: let customers easily find products while naturally promoting the sales of target products.
Category management has a professional definition: **a working method between retailers and suppliers that treats categories as strategic business units and enhances operational efficiency by delivering consumer value**.
Dr. B. Harris also gave a more humanized explanation: retailers operate products, but customers see life. Retail operations use products to paint a picture for customers.
In the current environment, I hope category management can inspire retail peers to understand consumer needs more deeply, help the industry overcome difficulties, and achieve better results.


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## Citation metadata

- Publisher: New Distribution
- Author: 张智强
- Published: 2025-09-03
- Canonical: https://xinjignxiao.com/en/articles/beyond-store-revamps-the-retail-industry-needs-category-management-9924506b/
- Original source: https://mp.weixin.qq.com/s/bC1rT5P__W6adWkbIYDkTw

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