Category Archives: Product Information Management
If you frequently read my blog, you know that traveling, reading and observing people often leads to new articles and views. This blog entry was influenced by a recent article, from FTWeekend, that I had the pleasure to read on my way to the San Francisco Bay Area.
When I subscribed to a VIP shopping club, in order to get special sales offers, the outlet store asked me for my household income. They also asked which age group I belong to. At that point, I realized that I had, again, entered into a new buyer age group. This fact inspired me to write this blog.
According to the Financial Times, aging populations in many countries are driving economic growth by creating markets for new products and services. This phenomenon is often referred to as the “Silver Economy.”
To achieve Commerce Relevancy, you must make your products relevant to the “Silver Economy” group.
Baby-Boomers Power new age of Spending
By 2020, the silver economy’s spending power will reach 15tn USD, writes FT. In the USA, AT Kearney says that in 2013, consumers aged 55+ contributed to 30% of US clothing sales. In 2013 as well, In the UK, those figures for consumers 65+, accounted for 15% of the fashion and footwear market. Boston Consulting Group says: “We are still waiting for fundamentally new products to meet the desire of this older group”.
Two Main Challenges
CPG companies and analysts see two main challenges when addressing the golden generation.
- Packaging: Will packaging need to change? If so, how? What risks are related to changing the packaging? Everyone agrees, testing will be essential in order to make the right decisions.
- Marketing: Baby-Boomers and members of the “Silver Economy” group do not consider themselves as being old. Then, how can be find the right tone of voice when running successful marketing campaigns while also aiming not to upset clients?
Brands and retailers are already adopting marketing strategy changes by having celebrities participate in the brand experience of personal goods. In addition, they also started working with new faces of fashion like Charlotte Rampling, Jessica Lange, Twiggy and Lauren Hutton.
“60-year-olds and 40-year-olds are dressing very similar”, said Simon Wolfson, CEO of retailer Next, to FT. I can confirm this, as I’ve experienced myself with my father in law. Very often I see him wear shoes or a jacket, that I could see myself wearing and that makes me jealous. Can it be true? Has my father in law adopted a fashion style similar to mine? With that in mind, were his purchase decision influenced by the same marketing campaign that would have attracted me?
Same Same but Different
The same products can be marketed differently. In order to better target those finding themselves in the Silver Economy group it might be necessary to build “references” to icons or music that relate to their past. Personally, I believe this is what commerce relevancy is all about, it’s about increase marketing relevancy in regards to customers. An example, triggering an emotional response from my father in law with a song that relates to his youth, whereas this song leaves me indifferent, is a clever way to highlight to him being older.
For example, in Asia where the demographic shifts is the biggest, the region’s biggest retailer, Aeon, built malls with wider aisles and plenty of seating area, to accommodate this change.
New Challenges for Information Management
Marketing the same products to different target groups will lead to increased complexity in from the perspective of product information. The same item can be available in two or three different kind of packaging. Other colors, just different haptic and more.
However, the key will be building intelligent connections between products and target personas. Baby-Boomers are using different touch points and information sources, then younger people. For retailers and CPG companies this means that it is becoming progressively challenging to serve all channels with the consistent and the relevant information across all their target groups. Just one use case for Commerce Relevancy.
Did you know 2013 E-commerce sales numbers did grow by staggering 47%, but 2014 are supposed to only grow by 17%…
The Eastern Europe B2C E-commerce Report 2014 was launched by E-commerce Europe recently. It comes with the 2013 facts and figures of E-commerce in Eastern Europe, all figures are based on the Global Online Measurement Standard for B2C E-commerce (GOMSEC).
The Eastern European region, including Russia, Ukraine, Romania and others, ranked fifth in terms of E-commerce size in 2013, with a European market share of 5.3%. The total 2013 B2C E-commerce economy of Eastern Europe amounted to €19.3 billion, a 47,4% growth compared to 2012. Online sales of goods and services are forecast to reach €22.6 billion in 2014, which would mean that the growth rate is going to drop significantly to 17.1% in comparison with 2013. E-commerce Europe’s research also reveals that approximately 34 million consumers in Eastern Europe bought goods and services online in 2013.
The digital industry is increasingly discussing the topic of Commerce Relevancy. Commerce Relevancy makes information relevant to consumers at the right time and place. Specifically, it ensures sales and marketing offers and materials are personalized at the highest level and consistent across all customer touch points. This post will talk about how much Commerce Relevancy matters and will explain the six building blocks that comprise it.
Commerce Relevancy in Fashion
I am a runner. For motivation, I track the majority of my runs on my iPhone. I use an arm band from a leading sports apparel company to carry my iPhone. I’m a great supporter of this apparel brand in general. I love their style so I shop from them frequently. Sometimes, when I travel the US, I shop in their outlet stores. Primarily, however, I shop on their official web-store using my iPad or mobile phone. Since I am a “fashion victim”, it is not easy for me to remember all the channels, shops and websites I have used to buy this brand’s products.
Why am I telling you all this?
For the past few weeks, I’ve repeatedly received email newsletters from this brand, promoting sporting outfits that don’t match my style or size. (Most of the promotion has been products for women, rather than for men, etc.) As a repeat customer, this lack of promotional accuracy has frustrated me. I have purchased many items from this brand. I’ve even shared their logo on twitter and Facebook. Despite my commitment to the brand, the brand still does not know which products I need or which styles I prefer.
Commerce Relevancy in Automotive
I have had a similar experience with my favorite car manufacturer. My wife and I have purchased three of this brand’s cars in the past. We currently lease one of their cars. When I need maintenance, I only visit this brand’s authorized repair garages. I only use official spare parts. Despite my loyalty to the brand, every time I call their stores, I am asked for my phone number. No one from the brand has ever approached me to test a new car, even though my current lease will soon end.
Once, when my current car was being repaired for several days, I requested permission to test drive a particular model, until my current car was ready. I was interested in this new model as a potential next purchase. I was told “it is not possible to test drive the car you’re interested in during the repair process. You may only use the official car rental service.”
Can Relevant Information Make the Difference?
The chapter of “Commerce Relevancy” started in 2013. The eBook on the “Informed Purchase Journey” mentions that consumers use average of 10.4 sources of information before taking a purchasing decision.
What this means for all companies and business people who sell products and services:
They have to earn every new sale to customer who is demanding more information than ever before.
The Meaning of Commerce Relevancy
In order to enable Commerce Relevancy, companies are now asking themselves how to connect the dots between supplier, location, customer and product information. In this business use cases customer profiles or target group personas get match with product information in sales and marketing. The key challenge his to connect the data but also to provide them to customer facing apps and touch points.
6 Building Blocks of Commerce Relevancy
- Product powered: Inside and outside your organization customer and employees have a consistent view of the products you sell, regardless of the touch point.
- Customer centric: No matter, where or how a client interacts with your company, you are able to generate a single view of the customer with address, interaction, and relation data.
- Relationship driven: The biggest value today and tomorrow lays in “connecting the dots” between different information like the availability of a product, from a supplier or warehouse, to the client who demands it.
- Bi-directional: Serving clients with really tailored marketing is only one way – the other way is the feedback on products and services and how this can be re-used.
- Predictive power: With Commerce Relevancy, companies take simple eCommerce recommendations to the next level. This means predicting the next logical action, based in information. This can empower business users to do the right things, data-driven. This makes the customer spend more, data-driven. Happy to give you examples if you reach out to me @benrund
- Real-time data: Customer always want it now. Changes on product offerings, transactions customer make, service centers they call – a service agent always needs to have the complete view with real time data.
Stay tuned for the next chapter of this blog series: “How companies can achieve commerce relevancy step by step.” It impacts, people, processes and technology.
Every fall Informatica sales leadership puts together its strategy for the following year. The revenue target is typically a function of the number of sellers, the addressable market size and key accounts in a given territory, average spend and conversion rate given prior years’ experience, etc. This straight forward math has not changed in probably decades, but it assumes that the underlying data are 100% correct. This data includes:
- Number of accounts with a decision-making location in a territory
- Related IT spend and prioritization
- Organizational characteristics like legal ownership, industry code, credit score, annual report figures, etc.
- Key contacts, roles and sentiment
- Prior interaction (campaign response, etc.) and transaction (quotes, orders, payments, products, etc.) history with the firm
Every organization, no matter if it is a life insurer, a pharmaceutical manufacturer, a fashion retailer or a construction company knows this math and plans on getting somewhere above 85% achievement of the resulting target. Office locations, support infrastructure spend, compensation and hiring plans are based on this and communicated.
So why is it that when it is an open secret that the underlying data is far from perfect (accurate, current and useful) and corrupts outcomes, too few believe that fixing it has any revenue impact? After all, we are not projecting the climate for the next hundred years here with a thousand plus variables.
If corporate hierarchies are incorrect, your spend projections based on incorrect territory targets, credit terms and discount strategy will be off. If every client touch point does not have a complete picture of cross-departmental purchases and campaign responses, your customer acquisition cost will be too high as you will contact the wrong prospects with irrelevant offers. If billing, tax or product codes are incorrect, your billing will be off. This is a classic telecommunication example worth millions every month. If your equipment location and configuration is wrong, maintenance schedules will be incorrect and every hour of production interruption will cost an industrial manufacturer of wood pellets or oil millions.
Also, if industry leaders enjoy an upsell ratio of 17%, and you experience 3%, data (assuming you have no formal upsell policy as it violates your independent middleman relationship) data will have a lot to do with it.
The challenge is not the fact that data can create revenue improvements but how much given the other factors: people and process.
Every industry laggard can identify a few FTEs who spend 25% of their time putting one-off data repositories together for some compliance, M&A customer or marketing analytics. Organic revenue growth from net-new or previously unrealized revenue is what the focus of any data management initiative should be. Don’t get me wrong; purposeful recruitment (people), comp plans and training (processes) are important as well. Few people doubt that people and process drives revenue growth. However, few believe data being fed into these processes has an impact.
This is a head scratcher for me. An IT manager at a US upstream oil firm once told me that it would be ludicrous to think data has a revenue impact. They just fixed data because it is important so his consumers would know where all the wells are and which ones made a good profit. Isn’t that assuming data drives production revenue? (Rhetorical question)
A CFO at a smaller retail bank said during a call that his account managers know their clients’ needs and history. There is nothing more good data can add in terms of value. And this happened after twenty other folks at his bank including his own team delivered more than ten use cases, of which three were based on revenue.
Hard cost (materials and FTE) reduction is easy, cost avoidance a leap of faith to a degree but revenue is not any less concrete; otherwise, why not just throw the dice and see how the revenue will look like next year without a central customer database? Let every department have each account executive get their own data, structure it the way they want and put it on paper and make hard copies for distribution to HQ. This is not about paper versus electronic but the inability to reconcile data from many sources on paper, which is a step above electronic.
Have you ever heard of any organization move back to the Fifties and compete today? That would be a fun exercise. Thoughts, suggestions – I would be glad to hear them?
With projected online sales of €47.8 billion for 2014 and an average annual growth rate of 22% since 2010, the e-commerce market is a beam of hope for the crisis-struck Southern European region on its path out of the recession. Goods and services sold online in Southern Europe in 2013 amounted to a total value of €40.8 billion, making up more than 11% of the total online sales in Europe. The region, consists of Spain, Italy, Turkey, Greece, Portugal, Croatia, Cyprus and Malta.
This is all revealed by the latest Southern Europe B2C E-Commerce Report by Ecommerce Europe, the European umbrella organization for 25,000+ companies that sell products and/or services online to consumers. Figures in the Ecommerce Europe reports are based on the Global Online Measurement Standard for E-commerce (GOMSEC).
Here are some facts on ecommerce in Southern Europe, I find worth mention
- 48 million online shoppers: Southern Europe is fertile ground for online retail activities; of 125 million active Internet users, 48 million are buying goods or products online.
- Spain leads the region: With total e-commerce sales of €14.4 billion, Spain is leading the Southern European region, ahead of Italy (€11.2 billion) and Turkey (€8.9 billion).
- Greek e-shoppers spent most in 2013: On average, Southern European online shoppers spent €842 per person in 2013. This amount is significantly less than the EU28 average of €1,500 and the European average of €1,376.
You can download the full Southern Europe B2C E-Commerce Report by Ecommerce Europe here.
The Western European B2C ecommerce market is developing extremely well. In fact, the Western European ecommerce market is expected to reach € 204.7 billion in 2014.
Online Sales to Reach €204.7 Billion in 2014
Just like the year before, the Western European region, comprising Belgium, France, Ireland, Luxembourg, the Netherlands and the United Kingdom, was in first position with regard to e-commerce size in 2013, with a European market share of 49%.
The total B2C e-commerce economy of Western Europe amounted €177.7 billion, a 12% growth compared to 2012. Online sales of goods and services are forecast to reach €204.7 billion in 2014, a growth of more than 15% in comparison with 2013. Ecommerce Europe’s research also reveals that 95 million consumers in Western Europe bought goods and services online in 2013.
Average Western European E-shopper Spent €1,867 Online in 2013
On average, Western European e-shoppers spent €1,867 per person online in 2013. This is far above the European average of €1,376 and EU28 average of €1,500. The United Kingdom leads the way with €2,614, making their e-shoppers the biggest online spenders in Europe. Within Western Europe, Ireland, Luxembourg and France follow with €1,643, €1,533 and €1,503, respectively, per online shopper.
For additional information, you can download the full report here.
Ecommerce Europe, the European umbrella organization for 25,000+ companies selling products and/or services online to consumers and collaborating with the regional associations. The total Northern European e-commerce economy of goods and services sold online amounted to €33.2 billion in 2013 and is expected to grow to €36.8 billion in 2014.
Online sales expected to reach €36.8 billion in 2014
The Northern European region, including Sweden, Denmark, Finland and Norway, is now in fourth position with regard to e-commerce size, with a 9.1% European market share. In 2013, the total B2C e-commerce economy of Northern Europe amounted to €33.2 billion, a 13.7% growth compared to the preceding year. Online sales of goods and services are forecast to reach €36.8 billion in 2013, which represents a growth of 10.7% in comparison with last year.
The average consumer spends more than 1700 euro online
If you are intersted in learning more details and figures on growth, marketsize on country level for Norway, Sweden, Finland, Denmark, Estonia, Iceland, Latvia and Lithuania, you can download the full B2C Ecommerce Report for Northern here.
Working for Informatica has many advantages. One of them is that I clearly understand the difference between Product Information Management (PIM) and Master Data Management (MDM) for product data[i]. Since I have this clear in my own mind, it is easy to forget that this may not be as obvious to others. As frequently happens, it takes a customer to help us articulate why PIM is not the same as Product MDM. Now that this is fresh in my mind again, I thought I would share why the two are different, and when you should consider each one, or both.
In a lengthy discussion with our customer, many points were raised, discussed and classified. In the end, all arguments essentially came down to each technology’s primary purpose. A different primary purpose means that typical capabilities of the two products are geared towards different audiences and use cases.
PIM is a business application that centralizes and streamlines the creation and enhancement of consistent, but localised product content across channels. (Figure 1)
Figure 1: PIM Product Data Creation Flow
Product MDM is an infrastructure component that consolidates the core global product data that should be consistent across multiple and diverse systems and business processes, but typically isn’t. (Figure 2)
Figure 2: MDM Product Data Consolidation Hub
The choice between the two technologies really comes down the current challenge you are trying to solve. If you cannot get clean and consistent data out through all your sales channels fast enough, then a PIM solution is the correct choice for you. However, if your organisation is making poor decisions and seeing bloated costs (e.g. procurement or inventory costs) due to poor internal product data, then MDM technology is the right choice.
But, if it is so simple – why I am even writing this down? Why are the lines blurring now?
Here is my 3-part theory:
- A focus on good quality product data is relatively recent trend. Different industries started by addressing different challenges.
- PIM has primarily been used in retail B2C environments and distributor B2B or B2C environments. That is, organisations which are primarily focused around the sale of a product, rather than the design and production of the product.
- Product MDM has been used predominately by manufacturers of goods, looking to standardise and support global processes, reporting and analytics across departments.
- Now, manufacturers are increasingly looking to take control of their product information outside their organisation.
- This trend is most notable in Consumer Goods (CG) companies.
- Increasingly consistent, appealing and high quality data in the consumer realm is making the difference between choosing your product vs. a competitor’s.
- CG must ensure all channels – their own and their retail partner’s – are fed with high quality product data.
- So PIM is now entering organisations which should already have a Product MDM tool. If they don’t, confusion arises.
- When Marketing buys PIM (and it normally is Marketing), quite frankly this shows up the poor product data management upstream of marketing.
- It becomes quite tempting to try to jam as much product data into a PIM system as possible, going beyond the original scope of PIM.
The follow-on question is clear: why can’t we just make a few changes and use PIM as our MDM technology, or MDM as our PIM solution? It is very tempting. Both data models can be extended to add extra fields. In Informatica’s case, both are supported by a common, feature-rich workflow tool. However, there are inherent risks in using PIM where Product MDM is needed or Product MDM where PIM is needed.
After discussions with our customer, we identified 3 risks of modifying PIM when it is really Product MDM functionality that is needed:
- Decrease speed of PIM deployment
- Reduce marketing agility
- Risk of marketing abandoning the hybrid tool in the mid-term
The last turned out to be the least understood, but that doesn’t make it any less real. Since each of these risks deserves more explanation, I will discuss them in Part 2 of this Blog. (Still to be published)
In summary, PIM and Product MDM are designed to play different roles in the quest for the availability of high quality product data both internally and externally. There are risks and costs associated with modifying one to take on the role of the other. In many cases there is place for both PIM and MDM, but you will still need to choose a starting point. Each journey to high quality product data will be different, but the goal is still the same – to turn product data into business value.
I (or one of my colleagues in a city near you) will be happy to help you understand what the best starting point is for your organisation.
[i] In case you were wondering, this is not the benefit that I joined Informatica for.
Did you know Harrods introduces more than 1.7 million new products every year? This includes their own labels, as well as other brands. Recently, Peter Rush, the Harrods Solution Architect responsible for product information, spoke at Informatica’s MDM Day EMEA in London. At the event, he said there are:
“so many things we want to do: Product Information is at the heart of most of them.”
As part of the customer experience program, Harrods identified product information quality as a key asset, next to customer information management.
The Product Information Challenge Harrods was facing included the following:
- A Lack of a single Product data store
- Inappropriate Product Data objectives
- Massive scale and volume of products and brands (1.7 million new products per year)
- Concessions and Own Bought
- Localized enrichment
- Media Assets all over the estate
While discussing his product information management project, Peter gave a great and simple example. He showed the product descriptions below and asked, “Who knows which two products these are?”:
- XX 6621/74 BLK VN SS TOP 969B S
- XX37066 L/BLU PRK FLAN SH 440B MED
Then, he solved the mystery. The answer was this:
- Black V-neck sleeveless top
- Light blue parker print flannel shirt
Turning vision into reality needs a joint business and IT project
Peter said, it is important to build a “flexible team to meet needs of each project stage, with representation from key business areas”. The team should include representatives from groups like: Merchandise Data, Buying Team, Web Team, IT, CRM and the Shopfloor Team. In addition to their Core Project Team, Harrods defined a Steering Committee and a group of selected Super Users.
Benefit summary: a combination of people, technology and process
At the end of the session, I was impressed by this graphic. This image sums up the essentials of product information management success. It is about the people, who are able to do the right things. It is about how technology enables automation. It is about the process which turns information into value.
Finally it is important to mention our partner Javelin Group is leading the PIM implementation at Harrods. Also Andy Hayler, analyst from The Information Difference, wrote an article for the CIO Magazine.
This is the story about a great speaker, a simple but funny product and the idea of a Ventana Award winning company which does “Brandspiration”.
When I invited Dale Denham, CIO from Geiger to speak on his at Informatica World this year, I was not sure what I will get. I only knew that Dale is known as an entertaining speaker. What could we expect from a person who, calls himself “the selling CIO”?
And Dale delivered. He opened his session “How product information in ecommerce improved Geiger’s ability to promote and sell promotional products” with a video.
What I liked about it was: It is a simple product, addressing a everyday problem, everybody knows. And this is the business of Geiger & Crestline, two brands in one company which sell promotional products to help companies inspire with their brand. They call is “Brandspiration”.
What this has to do with PIM?
Well the business need for Geiger was to sell 100,000s of products more efficient. Which includes update products faster and more accurately and add more products. But also Geiger was planning to
- Eliminate reliance on ERP
- Launch new web properties
- Improve SEO
- Centralize product management & control
- Standardize business processes & workflows
- Produce print catalog more faster
Before working with Informatica PIM it took a week to launch a new product. And Geiger/ Crestline has a complex price management for bundles, brands, packages and more under their two own brands for two different target groups: low price products with aggressive pricing and more high quality promotional products.
With PIM the product entry time could be reduced by about an hour. Geiger achieved 25% time saving for catalog creation and implemented PIM in about six months. (btw with the integrator “Ideosity“.) Another fact which made me proud on our offering was, that Dale told me his company was able to upgrade on the latest PIM version within hours.
“PIM has allowed us to be more proactive Instead of being handcuffed to a system that made us reactive. A great invest for this company. I can’t believe we survived for as long as we did without this software.”
Dale Denham, CIO
Whatch the video of Dale and how his company Geiger realizes Brandspiration with Informatica PIM. Did you know, Geiger is a proud winner of the Ventana Research Innovation Award for their PIM initiative?