How do you differentiate a screw, online? The key is product data.
With B2B Online approaching in early May, it’s a great time to start talking about some subjects we want to bring to the conversation at the show, where we will have a booth. For the next few weeks, Thinkwrap will be publishing blogs on B2B digital transformation topics, with a different focus each week.
A much talked-about barrier-to-entry for B2B companies looking to begin their digital transformation projects is Product Information Management, or PIM.
PIM helps a company create and maintain one record of a product in a database, so it’s always up-to-date to be shared and published to all media channels. When product data is in different formats, incomplete, or inaccurate, graduating to an omnichannel commerce platform is impossible. PIM ensures your salespeople and end customers have the ability to view your product information in an up-to-date and understandable format - and can be easily and quickly updated through all channels.
Of course, if you’re in B2B Manufacturing or Wholesale Distribution, you may understand this is an issue. Maybe you’re already on track to selecting a platform - and you’re here to figure out if PIM is really necessary, and to what extent. We’re not here to push a specific company’s tool (although please feel free to contact us if you’re interested in recommendations), but we want to get to the bottom of PIM in 2018 and what exactly B2B companies should be looking for when they’re investigating this business need.
Greg Wong, the CRO of the now-merged entity Tenzing, Spark::red, and Thinkwrap, has an extensive expertise helping companies achieve their business objectives through selection and implementation of PIM and MDM solutions. He has more than 18 years of experience in the PIM and MDM space and brings his thought leadership to our organization at a great time in the realm of B2B digital transformation. Here are his thoughts on the subject.
Why should Manufacturers and Wholesalers be investing in rich product information? What kinds of benefits should they expect?
To start with benefits for Manufacturers - most manufacturers are becoming retailers. Now they are becoming retailers themselves. The trend among manufacturers over the past few years is to sell direct as it usually results in a huge bump in their margin. If I make a TV, it costs $200 to build, then I sell it to a store for $400, then they mark it up to $1000 and sell it to the customer. But if I go direct, my margins increase from 100% to 200% or 500%. With eCommerce, it’s becoming easier to do this online.
The second big advantage for manufacturers is an ability to protect their brand. While historically being dependent on retailers and wholesalers representing them, manufacturers now have the opportunity to do it themselves. In many cases, the retailer or wholesaler would represent their product incorrectly. For instance, consumers would buy something, having a certain spec in mind, and then receive something else. By controlling the data flow and making sure the data is correct, manufacturers can ensure they are sending out that correct data. They also make it available to wholesalers and retailers in a direct way.
Different distributors manufacturers to provide information in different formats - as a result, manufacturers often have to create and share it in a variety of ways. PIM allows them to store it in one place in a unified format. Every time they have a change in their data, they can send it out to everyone, in the correct format. It makes the job of the manufacturer easier, and faster. It can take months to get a price change out to distributors and retailers the traditional way - with a PIM system, we can have it at the click of a button.
Another aspect is: how do you get to know your customer? When you’re disconnected from your customer, you don’t know why they are or aren’t buying from you. When you look at the advent of social media - Instagram, Twitter, etc - product information is no longer just the size, the shape, the dimensions. The information is also now the consumer feedback. People are looking at reviews. Manufacturers can now bring it in-house to understand why customers want the product and ultimately evolve their markets to better resonate with their target audience.
These are just some of the big needs on the manufacturer side. In terms of wholesaler benefits, well, wholesalers don’t make anything. They buy a product, and they sell a product. There may be 10 million products that they buy and sell. All of a sudden, you have thousands of suppliers to deal with. They want to send you data in different formats and different standards. Maybe they use different sizes of measurement - some say “each”, some say “ea”, some say “piece”. Or, what one supplier calls “pink”, another supplier calls “salmon”. As a wholesale distributor, I need to get data from all my manufacturers, then I need to standardize that data to have a consistent set of attributes and variables. I don’t want to have different sets of attributes for the same product. When I get to a retailer and tell them about the products I’m reselling, I have to give them complete information, so they want to buy my products.
One of the first things a PIM solution has for a distributor is a vendor portal. Such a system will automatically normalize the data and make sure it’s complete. It used to take wholesalers months to bring a product to market due to missing fields, etc. The vendor portal will allow them to automatically see if they are missing any information. Another concept is the golden product, or one marketable product. I have ten vendors that will sell me the same product - the golden product. Take, for example, a screw. How do I identify that screw A is the same as screw B? I need to know what’s the type of metal, the size of the screw, etc.
Finally, they have the same issue as the manufacturers. How do I send this data to all my customers? A big part of this is the languages. Between Canada, the US, the UK, and Europe, I might need to be able to make my data available in 30 languages across different published formats, with 20,000 products, so that combination of formats, languages, and data, can be in the millions. This helps me update all my information across different channels, automatically.
So if I want to take advantage of these benefits, one thing I want to know is: what’s the current state of PIM? How has it evolved?
There are large PIMs, small PIMs, and more vertical-specific ones. PIM has evolved a lot over the past 15+ years. It started as a system to centralize product data, and have it centralized in print catalogues, and now, digital channels. In the early days of PIM, there were wide differences in the functions of different PIM systems. Nowadays, the big difference is between Enterprise, or large PIM systems, or smaller, departmental PIMs. An Enterprise PIM is about breaking down organizational barriers between various groups within a company, and the ability to expand beyond the traditional product data, such as reviews, supplier info, what channels we sell those products in, and so on. It can help with your merchandising strategy.
The smaller PIMs meet the needs of traditional product information. They don’t enable cross-organization support, and in many cases are more generic, and don’t have industry-specific templates. Some of the larger vendors will provide prebuilt data models and best practices for automotive, consumer packaged goods, industrial, etc. PIM systems with pre-built models for CPG have information around recipes, whether or not it’s fair-trade, harvesting, and ethical sourcing. Whereas in automotive, they’ll have more info around year, make, and model. The data models for different industries can vary greatly.
It seems that PIM can lead to a lot of new ways to strategize or improve your business. Why is this such a pain point?
So, there’s a saying right now in the industry: product information is a new oil. It used to be, as a retailer or a consumer, you didn’t need a lot of product data from your B2B suppliers. You needed supply chain data, like the size of a box to put in a warehouse. Marketing and customer data wasn’t needed. In the past, people could walk into a store and see exactly what they were getting. The feel of the shirt, the wash instructions, the color, etc. 65% of all new purchases now begin online. People no longer walk into the stores - when you go online and look at a product, you make your decision based on product data. You want to see pictures, how it fits on different people, the colors, info on influencers or celebrities who have worn this shirt - when you look at all the data now being captured for a product, it can have 400 attributes when in the past, it was 40. The amount of data that a manufacturer or wholesaler must capture and make available is huge. They used to compete on size, and where they were in the supply chain. Now, if you have really good product data, even if you’re a smaller outfit, and you send it out with great email marketing, people trust you. When people see all that data, they trust that they want to buy that product.
Those who don’t have enough data are losing out, and those who do, are winning the war.
That's definitely a strong argument to consider. What steps do you advise a company take to decide if a PIM tool is right for them?
I think the first thing every company should do is understand: What is the business problem they are trying to solve? What are they trying to accomplish? PIM makes sense for a lot of companies, but it should be purchased to address a need. Not because it’s shiny and new, but because they have specific pain points. They want to grow their mix, do things like endless aisle, or build a marketplace. How do you want to sell your products, and reach your customers? Start with a business case. Most PIM products will meet the needs of most customers. Find out which one will allow you the quickest start and give you the best ROI. Don’t boil the ocean.
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Aisling is our Demand Marketing Specialist, and loves working with both technology and humans. She studied International Business (concentrating in Marketing) and has spent several years living and working in China, mostly in Shanghai, where she became passionate about global innovation and how the use of social media changes in different cultures. Aisling likes to keep up on internet trends - from business to memes - and is always looking for new ways to learn or entertain herself.