Over the past few years, we have assisted an increasing shift in customer behavior. Pervasive internet connectivity – along with the exponential adoption of mobile devices – has enabled shoppers to research and purchase products of all kinds, anytime and anywhere, using a combination of touch points they find most convenient. This is not a passing fad.
Consumers expect rich data and images to make purchase choices; business users require access to analytical data in order to make mission-critical decisions. These demands for information are driving a need for improved product data availability and accuracy. And this is changing the way businesses go to market.
A staggering number of stores and manufacturers are reforming their models to response to this challenge. The direct-to-consumer (DTC) model, while not new, is rapidly becoming the center stage to address these challenges. The optimal DTC model will vary depending on specific and contextual business objectives. However, there are many strategic benefits to going direct, but the main objectives include growing sales, gaining control over pricing, strengthening the brand, getting closer to consumers, and testing out new products and markets.
It is my contention that while the DTC model is gaining the deserved attention, much remains to be done. In fact, among many challenges that DTC poses, the processes and activities associated with sourcing product information, enriching product data to drive sales and lower returns, and managing product assortments across all channels loom large. More precisely, the challenges that need to be overcome are better exemplified by these points:
- Products have several variations to support different segments, markets, and campaigns.
- Product components, ingredients, care information, environmental impact data and other facets of importance to the customer.
- People are visual. As a result, easy website navigation is essential. Eye-catching images that highlight your products or services (perhaps as they’re being performed or displayed as intended) is an effective way to visually communicate information to your customers and make it easier for them to evaluate options. If information and pictures are readily accessible, customers are more likely to engage.
- Ratings, reviews and social data, stored within the product’s record rather than in separate systems.
- Purchasing and sales measurements, for example, sales in-store, return rates, sales velocity, product views online, as well as viewing and purchasing correlations are often held across several systems. However, this information is increasingly needed for search and recommendation.
The importance of product data and its use, combined with the increased demands on business as a result of inefficient, non-scaling approaches to data management, provide an imperative to considering a PIM to ‘power’ cross-channel retail. Once established, PIM users repeatedly report higher ROI. It is likely that we’ll see PIM systems rank alongside CRM, ERP, CMS, order management and merchandising systems as the pillars of cross-channel retailing at scale.
For all these reasons, choosing the right PIM strategy (and partner) is now a key decision. Get this decision wrong and it could become an expensive mistake.