Category planning teams aren’t short on talent. But when you’re managing hundreds of categories across departments and regions, even the sharpest, most capable teams can encounter major issues. Throwing more people at the problems doesn’t necessarily work, especially when better systems could eliminate the chaos in the first place. And in retail, as in so many other sectors, AI is a key element of these better systems.
According to McKinsey, 78% of companies are using AI in at least one part of their business. Whether it’s powering pricing algorithms or improving demand forecasting, the brands moving fastest are those adding AI-powered systems and decision-making to their toolbox.
In this post, we’re exploring how AI gives category teams a competitive edge—not by replacing people but by clearing the path. With fewer bottlenecks and smarter data-backed decisions, retailers unlock faster category planning at scale.
What Makes Category Planning So Complex
Category planning is like orchestrating a high-stakes operation that stretches across your entire retail ecosystem. You can think of it as a constant negotiation among data, demand, and deadlines.
You’re managing products and juggling thousands of SKUs, each with its own shelf life, pricing history, and role in the broader product assortment. Some items are staples, some are seasonal, and some are gaining the type of momentum you don’t want to miss out on. And one misstep—such as overstocking a slow mover or underestimating a rising trend—can throw off the entire category performance.
For some retailers, there’s also the issue of geography. You’re balancing local preferences with national initiatives. What sells in Southern California might flop in Chicago. You need to consider consumer behavior in each market, all while sticking to company-wide business objectives.
And let’s not forget about your internal teams. Merchandising wants more space for new products, and procurement is worried about supplier performance, all while your supply chain team is trying to nail down lead times. And everyone wants results, fast.
Modern category planning needs real-time data, automation, and systems that keep your teams aligned and moving. Because when you’re stuck chasing reports and reconciling spreadsheets, you’re losing opportunity.
What Happens When You Take the Manual Work Off Their Plate
Smart technology doesn’t replace the people on your team. It empowers them by clearing the busywork and giving them time to think bigger. Here’s how AI supports a more efficient, scalable category management process:
Planning That Doesn’t Start from Zero
Instead of rebuilding every plan from scratch, AI platforms retain context. If a certain planogram layout boosted performance in specific product categories, an AI system can flag similar opportunities elsewhere. If shopper behavior shifts, forecasts update in real time without manual intervention.
Dynamic Assortments Based on What’s Happening Now
Traditional planning often relies on historical data from the previous quarter or the previous year. And given the breakneck pace at which retail changes, that historical data isn’t always helpful. With AI, your team can simulate different category strategies before committing to them. If you’re looking to test a new mix of SKUs, explore regional variations, or address other business needs, you can see projected sales and inventory impact up front.
Everyone Working from the Same Playbook
Shared dashboards are nothing new, but when powered by AI, they transform into something beyond reporting tools. AI ensures that the data flowing into these dashboards is continuously updated, automatically validated, and decision-ready. Your merchandising, supply chain, and finance stakeholders no longer rely on static reports or lagging indicators. Instead, they work from the same real-time insights, with fewer surprises and smoother rollouts across the board.
More Time for Strategy, Less Time on Templates
AI can automatically generate planogram options, update supplier scorecards, and flag low-performing SKUs. That gives your team more time to focus on higher-impact work—like refining category strategies, testing new product mixes, and building stronger vendor relationships—instead of just keeping the wheels turning.
Better Supplier Decisions, Made Earlier
AI tools can track supplier performance on key metrics such as cost consistency and defect rates. When a vendor starts slipping, you’ll find out early instead of at the shelf. This gives you time to adjust and preserve in-stock positions while driving cost savings over the long term.
Metrics You Can Trust
With consistent up-to-date access to core KPIs across product categories, your team can track what’s working and make smarter adjustments. When planners can point to a 10% reduction in markdowns or a 7% lift in performance, the conversation shifts from justification to optimization.
What Smart Planning Actually Looks Like
Let’s say you manage a seasonal category—grilling kits in the summer. Without AI, planning looks like this:
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- You pull last year’s sales manually.
- You rebuild your SKU lists by hand, guesstimating what will work this season.
- You chase down supplier updates, and by the time you find out about delays, it’s too late to make significant strategic changes.
Compare that to an AI-supported category management process:
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- Forecasting pulls in POS data from last year, updated with real-time market signals.
- Assortment planning simulates product mixes based on region and shopper demand.
- Supply chain tools alert you to delays early enough to pivot.
- Next season’s plan improves automatically based on real-world results.
When you ditch the guesswork, you’re left with smarter execution that aligns with your business objectives.
Choosing the Right Tech Partner for Scale
AI can transform the category management process—but only if the tools are built to grow with you. That means supporting larger datasets, expanding product lines, and enabling faster decisions without adding headcount or complexity.
Here’s what to look for when evaluating your next platform:
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- Virtual testing tools. Can you quickly simulate layouts and assortments at scale, across multiple store formats and regions before rollout?
- Retail-specific intelligence. Does the AI go beyond generic patterns to understand how real shoppers interact with different product categories, helping you scale decisions that actually reflect in-store behavior?
- Flexible integration. Can the platform plug into your existing systems without disrupting procurement, planning, or reporting, even as your operations grow more complex?
That’s where InContext shines. Our tools are purpose-built to help retailers streamline category planning, align growing teams, and make better decisions faster, without getting bogged down as the business expands.
The Power of Arrangement AI
InContext’s Arrangement AI is purpose-built for category management at scale. It draws on one of the most robust behavioral datasets in the industry—more than 2.5 million virtual shopping trips and counting—to help teams simulate, optimize, and validate strategies before they hit the store.
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- Test Layouts Without the Guesswork
Quickly compare multiple planogram options in a virtual environment. See which ones perform best before spending time or budget on in-store trials. - React Faster to Change
Market trends shift fast. Arrangement AI helps you respond just as quickly with tools to update arrangements, retest variations, and go to market faster. - Pinpoint Category Drivers
Whether it’s shelf position, product pairing, or pricing, InContext’s AI helps isolate the factors that actually drive results, so you can make more strategic, data-backed decisions. - Validate at Every Stage
We help you back up every plan with predictive insights. From initial concept to final rollout, you’ll know your strategies are rooted in real shopper behavior and not assumptions.
- Test Layouts Without the Guesswork
Why It All Matters
Some people think effective category management is about having more data, but it’s really about having the right data, applied in the right way. That’s what InContext offers. Our platform supports every stage of the category planning process, from idea generation and forecasting to in-store execution and performance tracking.
So whether you’re trying to boost profitability, streamline the supply chain, or align teams across business units, partnering with InContext can help you build a stronger customer experience at every touchpoint.
If you’re serious about scaling up your category management strategy, now’s the time to upgrade your tools and your team’s potential.
Reach out today to get started.
