PRODUCT INFORMATION MANAGEMENT: A Business Imperative
Customer decisions in eCommerce require perfect data
On the internet, the data is the product. Unlike in reality, where the customer can touch and examine products in order to compare them, in the online virtual world he must depend 100% on the product data (including images or videos). The basis of his decision is the product data available. No data - no comparison - no decision. No purchase. End of story. One more visit that adds to the unhappy balance of 97% non-purchasers. Preparing the data correctly and presenting it in the right structure is, then, a foundation for high conversion rates.
The ROI of good product information is probably much higher in reality than if we “just” take into account the savings made on the processing and handling of investment data. In online shops product data plays an important
role in the purchase decision – and the positive result of this decision is ultimately one which we can measure as
conversion rates. No figure correlates higher with the marginal income of an online shop – not to mention the
satisfaction of eliciting the simplest of decisions from the customer.
Learn more in chapter 5 of the best of breed whitepaper series PIM 360. I would especially like to thank Mr. André Morys, CEO of Web Arts.
The ROI of good product information is probably much higher in reality than if we “just” take into account the savings made on the processing and handling of investment data. In online shops product data plays an important
role in the purchase decision – and the positive result of this decision is ultimately one which we can measure as
conversion rates. No figure correlates higher with the marginal income of an online shop – not to mention the
satisfaction of eliciting the simplest of decisions from the customer.
Learn more in chapter 5 of the best of breed whitepaper series PIM 360. I would especially like to thank Mr. André Morys, CEO of Web Arts.
PIM Trends 2011: E-commerce & multi-channel strategies are the drivers of product quality in commerce
The search for the right strategy for multi-channel commerce is the strongest driver of data quality in commerce. As a leading supplier of master data management (MDM) and multi-channel solutions, therefore we have put together seven important trends that will characterize product data management for the multi-channel environment for 2011.
1. Greater collaboration in the information supply chain:
Precise descriptions help sell products. In commerce, the collecting and organizing of product details is therefore of great importance. Manufacturers are in possession of the best data. The challenge is to retrieve their data in the best possible, and most importantly, simple manner. To ensure the most efficient operation possible, the motto has to be "100 % supplier self-service". Using a supplier portal, suppliers can perform this step simply and directly, and in addition they will also gain a better insight into the sales channels of their products through commerce.
2. Conversion rate and return rate as key factors:
Merchants who wish to avoid high return rates because of product descriptions in their catalog and/or their eCommerce site that are not matching the supplied items, must improve data quality first and foremost. Conversion rates also determines success in eCommerce. On the Internet, the displayed data represents the product. Customers have to rely on the provided text, images and videos when making their purchasing decision. The importance of product data in eCommerce is illustrated by the Heiler study of the topic available at heiler.com/research.
3. PIM enables Faceted Search:
Browsing by property, characteristic or value – these are the filter criteria, which influence todays eCommerce sites’ navigation. The theme of the faceted search is not new, but has recently established itself as an important factor for fast and successful search. But only perfect product data with all attributes make the "faceted search" function properly and the eCommerce world go round.
4. Quality needs rules:
Ensuring data quality is easier said than done. Besides care and intensive maintenance, there is a need for rules. It is in its Data Governance that an organization defines guidelines as to how and by whom product master data is to be handled. Lawgivers are also making increasing demands regarding compliance in several industries.
5. New jobs and processes in commerce:
In their search for the right multi-channel strategy, companies are increasingly considering the creation of a new job, that of the "Multi-Channel Manager". Universities, such as the University of Applied Science, Wedel in Hamburg, are even creating dedicated courses. On the one hand, the Multi-Channel Manager has to stand back from the channels in order to organize the data in a neutral manner, but on the other hand he or she must think along channel-specific lines, because data preparation and maintenance take place increasingly within the context of the marketing and distribution channel, as well as of the medium. It is precisely from these channels that the Multi-Channel Manager will create a central set and view of all data.
6. Multi-shop management:
Internationalization and a stronger focus on individual target groups, this is the dichotomy that major distributors want to bridge. The right eCommerce strategy will therefore involve the creation of individual brands and eCommerce sites to suit the different countries and target groups combined with maintenance of a central platform that can supply all the international shop systems.
7. Customer feedback acting as a correcting variable for product range management:
Bringing customer opinions and supplier knowledge together and combining customer evaluation from the Internet with the manufacturers' knowledge will enable merchants to control their product ranges to the best effect. The idea of user generated content turns to user generated products and assortments.
To summarize, the following will apply for 2011 and beyond: Manufacturers, merchants and customers will come even closer together in eCommerce. The concept of "efficient customer response" is becoming a reality, driven by the search for perfect product data as the basis of multi-channel commerce.
E-commerce & multi-channel strategies are the drivers of product quality in commerce
The search for the right strategy for multi-channel commerce is the strongest driver of data quality in commerce. Heiler Software, leading supplier of master data management (MDM) and multi-channel solutions, has therefore put together seven important trends that will characterize product data management for the multi-channel environment for 2011.
1. Greater collaboration in the information supply chain: Precise descriptions help sell products. In commerce, the collecting and organizing of product details is therefore of great importance. Manufacturers are in possession of the best data. The challenge is to retrieve their data in the best possible, and most importantly, simple manner. To ensure the most efficient operation possible, the motto has to be "100 % supplier self-service". Using a supplier portal, suppliers can perform this step simply and directly, and in addition they will also gain a better insight into the sales channels of their products through commerce.
2. Conversion rate and return rate as key factors: Merchants who wish to avoid high return rates because of product descriptions in their catalog and/or their eCommerce site that are not matching the supplied items, must improve data quality first and foremost. Conversion rates also determines success in eCommerce. On the Internet, the displayed data represents the product. Customers have to rely on the provided text, images and videos when making their purchasing decision. The importance of product data in eCommerce is illustrated by the Heiler study of the topic available at heiler.com/research.
3. PIM enables Faceted Search: Browsing by property, characteristic or value – these are the filter criteria, which influence todays eCommerce sites’ navigation. The theme of the faceted search is not new, but has recently established itself as an important factor for fast and successful search. But only perfect product data with all attributes make the "faceted search" function properly and the eCommerce world go round.
4. Quality needs rules: Ensuring data quality is easier said than done. Besides care and intensive maintenance, there is a need for rules. It is in its Data Governance that an organization defines guidelines as to how and by whom product master data is to be handled. Lawgivers are also making increasing demands regarding compliance in several industries.
5. New jobs and processes in commerce: In their search for the right multi-channel strategy, companies are increasingly considering the creation of a new job, that of the "Multi-Channel Manager". Universities, such as the University of Applied Science, Wedel in Hamburg, are even creating dedicated courses. On the one hand, the Multi-Channel Manager has to stand back from the channels in order to organize the data in a neutral manner, but on the other hand he or she must think along channel-specific lines, because data preparation and maintenance take place increasingly within the context of the marketing and distribution channel, as well as of the medium. It is precisely from these channels that the Multi-Channel Manager will create a central set and view of all data.
6. Multi-shop management: Internationalization and a stronger focus on individual target groups, this is the dichotomy that major distributors want to bridge. The right eCommerce strategy will therefore involve the creation of individual brands and eCommerce sites to suit the different countries and target groups combined with maintenance of a central platform that can supply all the international shop systems.
7. Customer feedback acting as a correcting variable for product range management: Bringing customer opinions and supplier knowledge together and combining customer evaluation from the Internet with the manufacturers' knowledge will enable merchants to control their product ranges to the best effect. The idea of user generated content turns to user generated products and assortments.
To summarize, the following will apply for 2011 and beyond: Manufacturers, merchants and customers will come even closer together in eCommerce. The concept of "efficient customer response" is becoming a reality, driven by the search for perfect product data as the basis of multi-channel commerce.
Top Nine E-Business Trends
Top Nine Trends
The Top Nine E-Business Trendsfor the 21st Century
- E-business will become a critical competitive strategy that will revolutionize the global economy.
- Companies will learn to manage customers' relationships by virtually serving their needs "24 × 7"-24 hours a day, 7 days a week.
- E-business that enables customers to personalize and customize products or services will flourish.
- Using the Net to find new customers and to better target customer preferences will be a standard practice.
- Producing, marketing, and distributing products or services online will be a cost-effective strategy for business.
- Learning to develop and serve online communities with niche interests will be essential to building customer loyalty.
- E-business models that provide greater choice for customers will change the traditional economics of supply and demand.
- Ready access to the Net from multiple gateways-cable TV, satellite, wireless telephones, and other devices-will greatly expand e-business opportunities.
- Highly efficient e-business virtual supply chains will intimately link manufacturers and producers directly to customers.
E-commerce Paradigm Shift
E-commerce is currently undergoing a paradigm shift. While in the past the focus was on the question of how the dealer brought a sufficient number to his products, the question now is how the dealer places his products where most customers visit. The questions of what criteria online shoppers use to organize their vendor selection and what roles are assumed by the range of goods, brand reputation/credibility and price in this process are also interesting.
One consequence of this change is that the number of channels through which products can be searched and purchased is steadily increasing. New marketplaces with new (technical) features and the entire subject of social commerce set the agenda. The growing importance of social commerce in recent months also shows that the ability to market the product to the customer is just as important as bringing the customer to the product.
A present study confirms the following:
Today, major marketplaces are of great importance to the majority of online shoppers with respect to searching for information and subsequently purchasing products. The fundamental principle of the dealer operating where the customers are continues to be true for stationary retail as well as for all e-commerce activities.
A well-designed online presence and a high SEO/SEM budget are no longer sufficient. Correct placement in the right marketplaces is vital. Such measures are of great importance, especially for unknown retailers and small specialty mail-order companies.
Price and product search engines and consumer portals are important sales platforms and constitute another lucrative channel for retailers.
The absolute transparency of the processes is not only customer friendly, but can turn new customers into important and long-running repeat buyers.
The following is clearly visible:
Consumers receive purchase incentives through an incredible amount of channels. The keyword is multi-channel sales. Shop owners must realize that e-commerce strategies have changed. The right points of intersection with large markets will later generate revenue. Moreover, the decision maker has to ask himself a fundamental question regarding budget distribution. SEO/SEM is important, but to reappear on the right pages is just as important. Optimal market positioning and good SEO/SEM practices are interdependent and must be strategically planned by each decision maker.
One consequence of this change is that the number of channels through which products can be searched and purchased is steadily increasing. New marketplaces with new (technical) features and the entire subject of social commerce set the agenda. The growing importance of social commerce in recent months also shows that the ability to market the product to the customer is just as important as bringing the customer to the product.
A present study confirms the following:
Today, major marketplaces are of great importance to the majority of online shoppers with respect to searching for information and subsequently purchasing products. The fundamental principle of the dealer operating where the customers are continues to be true for stationary retail as well as for all e-commerce activities.
A well-designed online presence and a high SEO/SEM budget are no longer sufficient. Correct placement in the right marketplaces is vital. Such measures are of great importance, especially for unknown retailers and small specialty mail-order companies.
Price and product search engines and consumer portals are important sales platforms and constitute another lucrative channel for retailers.
The absolute transparency of the processes is not only customer friendly, but can turn new customers into important and long-running repeat buyers.
The following is clearly visible:
Consumers receive purchase incentives through an incredible amount of channels. The keyword is multi-channel sales. Shop owners must realize that e-commerce strategies have changed. The right points of intersection with large markets will later generate revenue. Moreover, the decision maker has to ask himself a fundamental question regarding budget distribution. SEO/SEM is important, but to reappear on the right pages is just as important. Optimal market positioning and good SEO/SEM practices are interdependent and must be strategically planned by each decision maker.
"e" leaves "Commerce"
We carried out an online seminar in the USA on "eCommerce meets PIM" together with Bryan Walker(principal analyst at Forrester Research). We had a far bigger response to our invitation than we planned, with over 600 registrations.
Multi Channel Reality
Bryan used his presentation to clarify the meaning of product content in all modern sales channels. Multi-channel has long been a reality since its implementation. More than 70% of US consumers research first online before they – however they do it – buy products. 85% of US consumers use multiple channels. They purchase in stores but also, at the same time,over the Internet, by phone and more and more with mobile equipment such as iPhones and now even iPads.
Direct sales are changing the distributionchannels
Another figure shows how important it is for manufacturers to be have direct customer contact via the Internet: 46% of all consumers already research directly on manufacturers' Internet sites. In addition, more and more manufacturers are opening stores on the Internet. Production and retail are increasingly growing together. Or, put less positively:more and more retailers are facing direct competition from manufacturers. This represents a definite danger for retailers stretching far beyond the question discussed up until now of what influence Internet shopping has on the prices for specialist retailers with stores. Such questions are rather irrelevant to consumers. They click on the "checkout" which they completely trust and where they can get a good price. Trust is based on security. And security has lots o faspects on the Internet.
Limited investment in product content
Some of the questions that web providers have to answer for consumers online today, before they order a product, concern the product content. Perfect product descriptions; detailed pictures and videos; as well astests, reviews and ratings strongly influence people's decision to buy products. However, in relation to the relatively high investment inonline stores and customer portals, very little is invested in content management. Distributors spend less than 3% of their costs on product information management. It's no wonder that many stores with productsthat don't display commodities (such as cellphones, digital cameras, etc.) are not successful. The customer gets an unsatisfactory idea ofthe product and is not prepared to go ahead with the purchase.
Multi channel PIM strategy
The Forrester analyst leaves no doubt that retailers need to draw a clear picture of their customers' behavior. Today, a retailer needs to know where their customers go on the Internet; where they get their information; what motivates them to purchase something; and why they have decided on a specific channel. But manufacturers must also understand that the product content they generate will be automatically replicated on the Internet and reappear in all channels without them being able to control this flow of information. They can, however,control the quality of their product information, creating a USP amongst their competitors. Bryan Walker recommends that retailers and manufacturers "develop their own product information strategies because your customers expect this from you."
When choosing the suitable PIM solution, he recommends that they look closely at the technology providers. I can only agree with him on this. The differences are quick to see when it comes to complex processes and large amounts of data. One more thing can be said: multi channel almost always puts you in control of complexity. Which is why the old IT themes of user friendliness,stability and performance still play a dominant role.
"e"
Following Bryan Walker's presentation, one can remove the "e" from the term "eCommerce". Commerce without the "e" no longer exists in the real world. I agree with his view that: "commerce meets PIM" and have forgotten the "e"already.
Globalization: a definition and impact as it relates to data and the digitization of all things business
Globalization: a definition and impact as it relates to data and the digitization of all things business
Globalization is the ever increasing interconnectivity and interdependency of finance, politics, culture, the environment, language, currency, trade, industry, technology, social networks, travel, disease, thought, research, collaboration, information, know how, expertise, and business, across local, national, and international boundaries.
Factories are becoming virtual. Engineering and design centers have nothing but human thought and computers to capture the works into digitized form. Factory scheduling, supply inventory, demand planning -- all done using algorithms, computers, and data.
What does this mean for business as it relates to data? Everything! Because your data has become more relevant in more ways to more users across more boundaries than ever before. Your good data is returning more and more value every day, and your bad data is becoming toxic, viral, distracting, and negatively impacting your business, every day, every year, every time it is used. Bad data is a disease to business.
How is globalization affecting your business? How is your data enabling these effects? Is it crippling you? Does your data affect those connected to you as well? Can you measure these effects? Quantitatively? Qualitatively?
What if BP did not know there were worn out parts, poor maintenance scheduling, bad supplier contracts, and sub par safety manuals, procedures and tracking (presuming these combined may have had a hand in their disaster); could better data have prevented the Gulf oil spill catastrophe?
Maybe! But, only if BP also had the culture, processes, and reporting necessary to know there was a problem and also to then act to resolve the problem on time!
Sometimes it's the simple purchase orders that always seem to ship the wrong part to the wrong place - and it costs you time and money to redo the order, restock the item, reship another part, not to mention that it may have been only a $10 part, but the production line went off-line for two days! What did that cost you? Maybe you have thousands of purchase orders that never seem to be correct, that's man-years of effort being wasted.
It is time to begin thinking about implications, impact, costs, and how these are affecting your competitiveness when the global economy has become so intertwined.
You may think of your data as fuel for your business, and your business processes as the engine, and management as the driver - without good fuel, you won't go far. If your competition has high octane fuel, and an F-1 super car engine, he may beat you to the finish line. Even the best drivers in the world cannot win races with bad fuel or bad engines.
Good, clean, relevant, complete, correct, current data is the new "Holy Grail" of business. Your business is (or may be) ready for success, but is your data?
Source: Utopia Inc
Internet Retailer @ Chicago. Big or Small.... Multi-channel strategies are everywhere... 2.0?
Multi-channel 2.0??
Internet Retailer was a great and successful conference for both attendees and presenters. For 3 days I danced the Product Information Management (PIM) dance describing to attendees the complexities of managing product information to meet the pace of business of tomorrow's multi-channel requirements.
I discovered Multi-channel is evident in strategies in all sizes of companies. While stores, print catalogs and fliers, websites, call centers and inside sales are still critical to success, sales channels have more than doubled in a short amount of time. Let's make a list...
Multi-channel 1.0:
- Stores
- Print catalogs and flyers
- websites
- call centers / inside sales
Multi-channel 2.0
- Mobile commerce
- Kiosks
- Social (Facebook, twitter, etc...)
- Aggregator Sites (Ebay, Amazon, Newegg, Overstocked, etc...)
- Multiple/Cross E-commerce
- Interactive TV
- Consumer Electronics
- ....
Front facing platforms (like e-commerce) are full of great tools to present products online, analyzing your customers, processing transactions, and bringing customers to the sale, among other neat tools. On the back end, ERP systems are necessary to manage pricing, transactional information, and the material master. Although both necessary, neither of them enable the flexibility to centralize and manage ALL data (Item data and media assets) for all marketing and sales channels, at any time, anywhere in the world, for any channel, in any format, in any language, easily and automatically. This is key to maximum marketing effectiveness and sales success.
It's like water!
Imagine the time when villagers had to bring a bucket to a well or lake, fill it to the top, than carry it back by foot to the household to perhaps fill up another bigger bucket which will contain the same water used for everything.
Imagine modern-day water systems and plumbing. Front facing platforms like E-commerce are the streets and buildings, ERP is the body of water. PIM represents the pipes and tools used to provide cleaned and enriched water for all point, in any amount, in any temperature, for any use, in any disbursement format, at the exact time it is needed, instantly. I am quite happy with the convenience and flexibility I have about consuming water.
Water is the life blood of our planet. In today's information age, data is more and more the life blood of the organization.
PIM Overview Website
Interesting interview between leading PIM provider and leading eCommerce provider.
Below is an interesting interview between a leading provider of PIM solutions and a leader in e-commerce solutions. Read on...
The following Q&A was conducted with Greg Wong, CEO of Heiler Software (PIM Solutions), and Dave Magnoni, director of product marketing at ATG (eCommerce solutions). The two experts will join Forrester’s Principal Analyst Brian Walker during a webinar called “eCommerce meets Product Information Management”.
Question 1: We hear it all of the time; companies spend seven to nine months tediously creating a general catalog, not to mention the cost and time it takes to create a targeted one as well. How can companies reduce this time and spend more effort targeting their customers?
Greg Wong: One word: Automation. Using a single repository for all of your data helps the automation process because you are able to create and store customer-specific content and standard product information. Then, you publish it with the click of a button for both creative or structured flyers and catalogs, and only the final touches or pre-press work is done in Desktop Publishing solutions like Adobe InDesign, QuarkXpress, or FrameMaker.
Dave Magnoni: Printed catalog creation is generally done outside of eCommerce, but Web data and User Generated Content available online may be useful for the process. You can capture the right information online and keep this in synch with the product content.
Question 2: Companies that are growing and increasing their offerings are overwhelmed by all of the data that they have to manage. How do companies with multiple sales channels (i.e. multiple Web sites, catalogs, brick and mortar locations) communicate their product and brand information efficiently?
Greg Wong: Having one central system allows you to have the ability to synchronize your product information across multiple domains, targeted catalogs, and brick and mortar locations in one step, as opposed to updating each one individually. In addition, data is not replicated and data governance policies can be enforced across channels. The whole idea behind the Long-Tail theory is being able to expand your product line and increase revenue. You can do this easily with a PIM.
Dave Magnoni: Yes, having product information in a single master system is very helpful, and it provides a starting point for the commerce process. For example, master product information may be in one place, but different online sites may show brand-specific catalogs, or a single B2B site might show only products authorized in a given customer contract. The commerce engine will pull the product information, add information from other sources (like inventory levels), and provide an environment where the merchant can effectively communicate his or her brand to provide personalized information and offers that will ensure each visitor has the best experience possible.
Question 3: Why is it important for eCommerce applications to work in-conjunction with a product information management solution?
Greg Wong: Most organizations have either become or are becoming multi-channel resellers. With this in mind, there are many different source systems of data and many different output channels. eCommerce is one channel in the ecosystem; the job of an eCommerce system is to provide the best shopping experience to end customers, but not to be a data harmonization, data quality, or data management solution. By off-loading this to a PIM, eCommerce systems can focus on doing what they do best, generating revenue for retailers. Businesses will need their eCommerce applications to support their multi-channel initiatives as customers are becoming increasingly demanding.
Dave Magnoni: Online commerce involves selling and supporting many channels: multiple brand and country Web sites, mobile sites, in-store kiosks, agents who provide customer service, feeds to social media sites, etc. The PIM provides strong tools to make sure the information used for multi-channel online commerce is both high-quality and consistent across those many different channels. PIM also supports other channels, like catalog production, which are not usually driven from the online information. This improves the consumer’s experience and, in turn, improves business results.
The importance of eCommerce applications and PIM working in conjunction can be demonstrated in the use of search facets. These are valuable features that help customers filter a wide assortment of products to narrow in on those that they want to consider for purchase. High-quality information is needed in the product feed to ensure those facets turn out correctly on the Web, mobile or other sites that a customer is using. The PIM helps get the information right so the eCommerce experience can be flawless.
The following Q&A was conducted with Greg Wong, CEO of Heiler Software (PIM Solutions), and Dave Magnoni, director of product marketing at ATG (eCommerce solutions). The two experts will join Forrester’s Principal Analyst Brian Walker during a webinar called “eCommerce meets Product Information Management”.
Question 1: We hear it all of the time; companies spend seven to nine months tediously creating a general catalog, not to mention the cost and time it takes to create a targeted one as well. How can companies reduce this time and spend more effort targeting their customers?
Greg Wong: One word: Automation. Using a single repository for all of your data helps the automation process because you are able to create and store customer-specific content and standard product information. Then, you publish it with the click of a button for both creative or structured flyers and catalogs, and only the final touches or pre-press work is done in Desktop Publishing solutions like Adobe InDesign, QuarkXpress, or FrameMaker.
Dave Magnoni: Printed catalog creation is generally done outside of eCommerce, but Web data and User Generated Content available online may be useful for the process. You can capture the right information online and keep this in synch with the product content.
Question 2: Companies that are growing and increasing their offerings are overwhelmed by all of the data that they have to manage. How do companies with multiple sales channels (i.e. multiple Web sites, catalogs, brick and mortar locations) communicate their product and brand information efficiently?
Greg Wong: Having one central system allows you to have the ability to synchronize your product information across multiple domains, targeted catalogs, and brick and mortar locations in one step, as opposed to updating each one individually. In addition, data is not replicated and data governance policies can be enforced across channels. The whole idea behind the Long-Tail theory is being able to expand your product line and increase revenue. You can do this easily with a PIM.
Dave Magnoni: Yes, having product information in a single master system is very helpful, and it provides a starting point for the commerce process. For example, master product information may be in one place, but different online sites may show brand-specific catalogs, or a single B2B site might show only products authorized in a given customer contract. The commerce engine will pull the product information, add information from other sources (like inventory levels), and provide an environment where the merchant can effectively communicate his or her brand to provide personalized information and offers that will ensure each visitor has the best experience possible.
Question 3: Why is it important for eCommerce applications to work in-conjunction with a product information management solution?
Greg Wong: Most organizations have either become or are becoming multi-channel resellers. With this in mind, there are many different source systems of data and many different output channels. eCommerce is one channel in the ecosystem; the job of an eCommerce system is to provide the best shopping experience to end customers, but not to be a data harmonization, data quality, or data management solution. By off-loading this to a PIM, eCommerce systems can focus on doing what they do best, generating revenue for retailers. Businesses will need their eCommerce applications to support their multi-channel initiatives as customers are becoming increasingly demanding.
Dave Magnoni: Online commerce involves selling and supporting many channels: multiple brand and country Web sites, mobile sites, in-store kiosks, agents who provide customer service, feeds to social media sites, etc. The PIM provides strong tools to make sure the information used for multi-channel online commerce is both high-quality and consistent across those many different channels. PIM also supports other channels, like catalog production, which are not usually driven from the online information. This improves the consumer’s experience and, in turn, improves business results.
The importance of eCommerce applications and PIM working in conjunction can be demonstrated in the use of search facets. These are valuable features that help customers filter a wide assortment of products to narrow in on those that they want to consider for purchase. High-quality information is needed in the product feed to ensure those facets turn out correctly on the Web, mobile or other sites that a customer is using. The PIM helps get the information right so the eCommerce experience can be flawless.
PIM and Multi-channel Commerce
Multi-Channel-Commerce
From the point of view of businesses that specialize in the acquisition, preparation, and distribution of product information, the motivational factors for the initiation of customer projects have changed massively over the past several years. Enterprise Product Information Management (PIM), which has become an uncontroversial, important business process, provides a variety of solutions to problems that occur as marketing and sales-related product information makes it way through the business landscape.
Looking back, the drivers of enterprise PIM have been on the selling side. Specialist solutions for output processes — print, in particular — had been available for many years. But it was not until people started to realize that PIM was particularly useful whenever data were generated by a PIM process based on a standardized, enterprise-wide repository that the solutions that exist in the enterprise PIM segment today were arrived at.
The subjects on which projects focused, along with Enterprise PIM, were the consolidation of supplier data, the creation of the "golden record" as an enterprise "place of truth", internationalization linked with a process-secured ("global-local") creation process, and of course in depth integration with the backend. Responsibilities also changed within corporations. The head of marketing's partially-automated print solution became the CIO's enterprise PIM.
Just as enterprise PIM emancipated itself between 2002 and 2004 by staking a new claim for the all-encompassing significance of product information as a business process, it is now on the cusp of a new stage in its development. The marketplace is increasingly focusing on enterprise PIM as the "long-lost brother of e-commerce".
But let's start at the beginning: what issues drive PIM projects today? Andrew White, a Gartner analyst, first introduced the "MDM era" as the successor to the "ERP era" in the fall of 2009. Gartner positions MDM as an enterprise-wide repository. In the scope of this repositioning, Gartner took the opportunity to coin a new term: "MDM for product data" instead of PIM.
Multiple channel distribution is becoming increasingly important, irrespective of whether the businesses in question are B2C or B2B-focused. Target-oriented distribution over different channels such as online stores, print catalogs, and point of sale opens up new target markets and increases awareness in the marketplace. It is precisely these developments in the area of multi-channel commerce which make the idea of a centralized PIM solution attractive. The key drivers are the long tail, multi-site, and changes in category management.
Long tail
Particularly in the area of distance selling, product selection policy has seen major changes. Previously, category management meant always having to deal with limited space. In a print catalog, only a certain number of pages were available. The logistics were also limited: storage limited the possibilities so clearly that most dealers attempted to find the perfect "catalog selection" with the highest number of top-selling items.
In our projects, we see these product selections in companies. It quickly becomes evident that compromises have been made in the selection of products. In most cases, only certain brands are carried, for instance. Or a segmentation of the product and target groups is performed. This is certainly useful for print catalogs, but online stores don't have these limitations!
In stationary retailing, the product range must be closely geared to reflect customer demand, due to the limited selling space. In doing so, particular account is taken of the demands of the majority, while anything that is not sufficiently profitable is often ignored. Many products remain unsold for this reason – it is precisely these which are the "long tail". The term derives from a graphical representation of a frequency distribution.
When one considers the margins, this distribution also has a highly interesting meaning: in most industries, the fast-moving items intended for the masses have a particularly low margin. Consider the market for music. What do you think has a higher margin: a top ten CD single, or a rare collectable album? The rare album, of course! This means that in the past, retailers had to forgo high-margin products due only to limited floor space, limited pages in catalogs, or perhaps due to limitations in their IT systems!
The long tail consists of a wide variety of products: a rare bottle of wine, special interest music, exotically spiced roasted peanuts, films that have been deleted from back catalogs, highly specific spare parts for which there is little demand. The list is endless. There is no shortage of products for which there is little demand. They are seldom available, however.
Compared to all other distribution channels, the Internet offers us considerable cost advantages. The digital mall consists of servers which can be readily expanded when necessary. Adding a new product takes little more than a few additional database entries. And perhaps a little space in a logistics center with efficient operations, or possibly run by the service provider – and in the case of purely digital products not even that: sending a digital music track over the Internet costs the retailer more or less nothing.
The only question is why retailers haven't been massively expanding their product ranges for years. Why are we seeing product selections numbering 300,000 items with typical B2C dealers, instead of 3 million items? The leading store systems and search engines are designed for these large product ranges. It would not pose any major problems.
There is a problem, of course: before products can be presented in a store, the product data must be obtained from suppliers and processed. In many cases, product ranges are also limited by the fact that the product data cannot be efficiently maintained.
It is here that the new PIM strategies are brought to bear: with an enterprise PIM solution, retailers can build and maintain extremely large product portfolios. For the first time, retailers can now use an integrated process: suppliers provide their product portfolios in electronic form. These data are checked and stored in a central repository. They are then structured and prepared for presentation in the stores.
Multi-site
In the past, a strong tendency towards vertical integration on the part of manufacturers has been evident in the retail sector. Manufacturers have not only set up flagship stores to attract more demanding customers and position their brands, they have also attempted to boost their turnover by setting up their own product presentations in retail outlets. This integrated product presentation is referred to as shop-in-shop. Retailers are showing an increasing tendency to set up brand and manufacturer-specific web stores.
Beside shops-in-shops, manufacturers are increasingly setting up target-market specific presences. If one investigates the online strategies of the large mail-order retailers, one finds both an increasing diversification of brands, and an increasing tendency to cross-sell. SportScheck sells a pair of Adidas sport pants in the Adidas-branded store on sportscheck.de while also cross-selling them on otto.de and on other platforms such as amazon, for example.
The complexity of handling product data arises from the multiplication of language, sales area, target group, brand specifics, and platform. With every additional website that requires product data, enterprise PIM gains greater importance as a central clearing house. Enterprise PIM is a precondition for the successful management of a large number of stores!
Changes in category management
Changes in the area of product selection strategies represent a further factor for the re-orientation of enterprise PIM. The massive growth of product portfolios in the marketplace has led to fundamental changes in the area of data management.
These changes are most clearly evident in the area of mail-order sales. In the context of a multi-channel strategy, PIM is typically positioned with the following process requirements: centralized data administration, increased automation, reduction of manual processes, reduction in media discontinuities, strengthening of clear responsibilities, early data capture, accelerated data availability, reduction of errors. In a real business, the following points would trigger an enterprise PIM project:
· Several employees are continuously occupied with copying and pasting image and text data from an existing database, in order to make them available to third-party users.
· Catalog page briefings (for print catalogs) typically involve the use of pen, paper, and scissors.
· Raw image data cannot be used for the design of web pages.
· 60% of all items in the web store were "re-digitized" from the print catalog.
· A call center employee has to check up to four systems simultaneously in order to supply the customer with all the required product data.
· In some cases, the same piece of text is translated multiple times per target language; and separately for online and print.
Growth of product portfolios has thus had an enormous impact on the data maintenance scenario. Until recently, back office staff may have manually maintained product group information article by article, but now this is no longer possible, or at least not as a sequential task. New processes are required here! In order to promote the "relevance" factor in data maintenance, we now import customer ratings from the various online stores into the PIM system. The employee simply navigates to the poorly-rated products. These are usually the products that have to be described more accurately... online stores thus provide an excellent source of real-time data quality ratings.
Organizationally, these changes in category management will lead to a restructuring of departments that have traditionally been responsible for data acquisition, maintenance and output planning. In many businesses, the publication specialists responsible for the print channel are organizationally separate from those responsible for the Internet channels. This often leads to redundant product data maintenance, and a failure to exploit synergies. The tangible indirect effects of this are different product presentations in print and on the Internet, different product portfolios, a huge manual overhead when transferring content between media, and redundant storage of product facts within the enterprise.
In the case of leading mail-order retailers, there has been a realization in the past few years that the convergence of presentation channels leads to a restructuring of departments. Reorganization serves two objectives:
· Simplifying and standardizing data creation. The purchasing department now has a new role as a supplier of highest possible product information quality.
· Publication planning is becoming increasingly flexible and will typically span multiple output channels. Any differentation between online and offline channels should be consciously avoided.
Conclusion
Following the emancipation of enterprise PIM as an independent business process, it now stands on the verge of a new stage in its development. Enterprise PIM (or Gartner's "MDM for product data") is once again gaining importance in marketing and sales: enterprise PIM is a prerequisite for successful e-commerce!
* Gartner Master Data Management Summit, October 5-7, 2009 Hyatt Regency Century Plaza, Los Angeles, CA
From the point of view of businesses that specialize in the acquisition, preparation, and distribution of product information, the motivational factors for the initiation of customer projects have changed massively over the past several years. Enterprise Product Information Management (PIM), which has become an uncontroversial, important business process, provides a variety of solutions to problems that occur as marketing and sales-related product information makes it way through the business landscape.
Looking back, the drivers of enterprise PIM have been on the selling side. Specialist solutions for output processes — print, in particular — had been available for many years. But it was not until people started to realize that PIM was particularly useful whenever data were generated by a PIM process based on a standardized, enterprise-wide repository that the solutions that exist in the enterprise PIM segment today were arrived at.
The subjects on which projects focused, along with Enterprise PIM, were the consolidation of supplier data, the creation of the "golden record" as an enterprise "place of truth", internationalization linked with a process-secured ("global-local") creation process, and of course in depth integration with the backend. Responsibilities also changed within corporations. The head of marketing's partially-automated print solution became the CIO's enterprise PIM.
Just as enterprise PIM emancipated itself between 2002 and 2004 by staking a new claim for the all-encompassing significance of product information as a business process, it is now on the cusp of a new stage in its development. The marketplace is increasingly focusing on enterprise PIM as the "long-lost brother of e-commerce".
But let's start at the beginning: what issues drive PIM projects today? Andrew White, a Gartner analyst, first introduced the "MDM era" as the successor to the "ERP era" in the fall of 2009. Gartner positions MDM as an enterprise-wide repository. In the scope of this repositioning, Gartner took the opportunity to coin a new term: "MDM for product data" instead of PIM.
Multiple channel distribution is becoming increasingly important, irrespective of whether the businesses in question are B2C or B2B-focused. Target-oriented distribution over different channels such as online stores, print catalogs, and point of sale opens up new target markets and increases awareness in the marketplace. It is precisely these developments in the area of multi-channel commerce which make the idea of a centralized PIM solution attractive. The key drivers are the long tail, multi-site, and changes in category management.
Long tail
Particularly in the area of distance selling, product selection policy has seen major changes. Previously, category management meant always having to deal with limited space. In a print catalog, only a certain number of pages were available. The logistics were also limited: storage limited the possibilities so clearly that most dealers attempted to find the perfect "catalog selection" with the highest number of top-selling items.
In our projects, we see these product selections in companies. It quickly becomes evident that compromises have been made in the selection of products. In most cases, only certain brands are carried, for instance. Or a segmentation of the product and target groups is performed. This is certainly useful for print catalogs, but online stores don't have these limitations!
In stationary retailing, the product range must be closely geared to reflect customer demand, due to the limited selling space. In doing so, particular account is taken of the demands of the majority, while anything that is not sufficiently profitable is often ignored. Many products remain unsold for this reason – it is precisely these which are the "long tail". The term derives from a graphical representation of a frequency distribution.
When one considers the margins, this distribution also has a highly interesting meaning: in most industries, the fast-moving items intended for the masses have a particularly low margin. Consider the market for music. What do you think has a higher margin: a top ten CD single, or a rare collectable album? The rare album, of course! This means that in the past, retailers had to forgo high-margin products due only to limited floor space, limited pages in catalogs, or perhaps due to limitations in their IT systems!
The long tail consists of a wide variety of products: a rare bottle of wine, special interest music, exotically spiced roasted peanuts, films that have been deleted from back catalogs, highly specific spare parts for which there is little demand. The list is endless. There is no shortage of products for which there is little demand. They are seldom available, however.
Compared to all other distribution channels, the Internet offers us considerable cost advantages. The digital mall consists of servers which can be readily expanded when necessary. Adding a new product takes little more than a few additional database entries. And perhaps a little space in a logistics center with efficient operations, or possibly run by the service provider – and in the case of purely digital products not even that: sending a digital music track over the Internet costs the retailer more or less nothing.
The only question is why retailers haven't been massively expanding their product ranges for years. Why are we seeing product selections numbering 300,000 items with typical B2C dealers, instead of 3 million items? The leading store systems and search engines are designed for these large product ranges. It would not pose any major problems.
There is a problem, of course: before products can be presented in a store, the product data must be obtained from suppliers and processed. In many cases, product ranges are also limited by the fact that the product data cannot be efficiently maintained.
It is here that the new PIM strategies are brought to bear: with an enterprise PIM solution, retailers can build and maintain extremely large product portfolios. For the first time, retailers can now use an integrated process: suppliers provide their product portfolios in electronic form. These data are checked and stored in a central repository. They are then structured and prepared for presentation in the stores.
Multi-site
In the past, a strong tendency towards vertical integration on the part of manufacturers has been evident in the retail sector. Manufacturers have not only set up flagship stores to attract more demanding customers and position their brands, they have also attempted to boost their turnover by setting up their own product presentations in retail outlets. This integrated product presentation is referred to as shop-in-shop. Retailers are showing an increasing tendency to set up brand and manufacturer-specific web stores.
Beside shops-in-shops, manufacturers are increasingly setting up target-market specific presences. If one investigates the online strategies of the large mail-order retailers, one finds both an increasing diversification of brands, and an increasing tendency to cross-sell. SportScheck sells a pair of Adidas sport pants in the Adidas-branded store on sportscheck.de while also cross-selling them on otto.de and on other platforms such as amazon, for example.
The complexity of handling product data arises from the multiplication of language, sales area, target group, brand specifics, and platform. With every additional website that requires product data, enterprise PIM gains greater importance as a central clearing house. Enterprise PIM is a precondition for the successful management of a large number of stores!
Changes in category management
Changes in the area of product selection strategies represent a further factor for the re-orientation of enterprise PIM. The massive growth of product portfolios in the marketplace has led to fundamental changes in the area of data management.
These changes are most clearly evident in the area of mail-order sales. In the context of a multi-channel strategy, PIM is typically positioned with the following process requirements: centralized data administration, increased automation, reduction of manual processes, reduction in media discontinuities, strengthening of clear responsibilities, early data capture, accelerated data availability, reduction of errors. In a real business, the following points would trigger an enterprise PIM project:
· Several employees are continuously occupied with copying and pasting image and text data from an existing database, in order to make them available to third-party users.
· Catalog page briefings (for print catalogs) typically involve the use of pen, paper, and scissors.
· Raw image data cannot be used for the design of web pages.
· 60% of all items in the web store were "re-digitized" from the print catalog.
· A call center employee has to check up to four systems simultaneously in order to supply the customer with all the required product data.
· In some cases, the same piece of text is translated multiple times per target language; and separately for online and print.
Growth of product portfolios has thus had an enormous impact on the data maintenance scenario. Until recently, back office staff may have manually maintained product group information article by article, but now this is no longer possible, or at least not as a sequential task. New processes are required here! In order to promote the "relevance" factor in data maintenance, we now import customer ratings from the various online stores into the PIM system. The employee simply navigates to the poorly-rated products. These are usually the products that have to be described more accurately... online stores thus provide an excellent source of real-time data quality ratings.
Organizationally, these changes in category management will lead to a restructuring of departments that have traditionally been responsible for data acquisition, maintenance and output planning. In many businesses, the publication specialists responsible for the print channel are organizationally separate from those responsible for the Internet channels. This often leads to redundant product data maintenance, and a failure to exploit synergies. The tangible indirect effects of this are different product presentations in print and on the Internet, different product portfolios, a huge manual overhead when transferring content between media, and redundant storage of product facts within the enterprise.
In the case of leading mail-order retailers, there has been a realization in the past few years that the convergence of presentation channels leads to a restructuring of departments. Reorganization serves two objectives:
· Simplifying and standardizing data creation. The purchasing department now has a new role as a supplier of highest possible product information quality.
· Publication planning is becoming increasingly flexible and will typically span multiple output channels. Any differentation between online and offline channels should be consciously avoided.
Conclusion
Following the emancipation of enterprise PIM as an independent business process, it now stands on the verge of a new stage in its development. Enterprise PIM (or Gartner's "MDM for product data") is once again gaining importance in marketing and sales: enterprise PIM is a prerequisite for successful e-commerce!
* Gartner Master Data Management Summit, October 5-7, 2009 Hyatt Regency Century Plaza, Los Angeles, CA
