I recently came across an interesting executive summary of a report conducted by Capgemini involving 62 global leading online retail and consumer products (CP) companies in the grocery category (it’s a bit dated but I think still pertinent). The aim of the research was to “evaluate how visible and consumer driven the product data is in retailers’ and CP companies’ digital channels.”
The research finds that in many cases the “digital product information provided to shoppers is inaccurate, incomplete or missing entirely” which doesn’t perfectly square with the need for rich consumer-oriented product data, driven by the explosion of digital channels. According to the report, the key step to provide better information and enhance the dialogue with shoppers is to “improve the visibility of product data in digital channels.” This resonates with me greatly.
However, the question is “how?” That is: How to make product content relevant and consistent* across all channels?
The folks behind the research have no doubts: “…retailers must invest in efficient PDM [Product Data Management] processes, flexible Master Data Management (MDM) tools and new competencies in product marketing organizations.”
Wondering whether PIM and PDM is the same thing? The short answer is NO. I suspect the authors are trying to use an umbrella term to bring PIM and PLM (Product Life Cycle) together. In fact, PDM is traditionally associated with the engineering aspect of product development. Some authors even use them interchangeably, which in my opinion reveals a lack of understanding of PIM. At any rate, retailers must invest in efficient PIM processes. This is the point that I have been trying to make throughout this blog.
The report is quite wanting when it comes to how PIM/PDM and MDM investments would actually turn into real competitive advantage. Granted, a few tips are provided to make quick wins, such as “adding multimedia”, or write “storytelling for key products to create excitement and enhance shopper relevancy” (an aspect we analysed a few months ago), or include “product ingredients and nutritional value on the product page”. Not a big deal of help, but a welcoming attention to product information as a foundational and strategic element for retailers and CPs.
A final comment on the criteria to assess the maturity of the companies surveyed. The companies were assessed across 13 product data attributes and three maturity levels were defined for each attribute (Basic, Advanced, Leader). Now, I am not big on maturity models. Nevertheless, narrowing the scope of the analysis (the report assessed grocery retailers and CPs) made the maturity level more relevant. The following diagram summarizes the findings:
(The x-axis represents the product attributes adopted by the report).
The report notes that the “most significant differences between retailers’ and CP companies’ scores are found in presenting: 1) the product name/brand, 2) usage instructions, 3) manufacturer, and 4) ingredients/features”, as circled in the figure above.
I personally found startling that retailers and manufacturers are basically neck-to-neck when presenting product standards, specifications, ratings, visuals, and packaging. Take “visuals” for instance. Visuals help shoppers making the right decision resulting in more conversions and fewer returns. What stops retailers from providing appealing “visuals”?
Another paramount product attribute is “ratings”. For retailers this means supporting effective product introduction and drive sales of existing items. Admittedly, some of the companies assessed have made quantum leaps since 2012 but it seems that they are reacting to trends and not strategically developing processes and solutions to face increasing challenges posed by the digital era.
Another paramount product attribute is “ratings”. For retailers this means supporting effective product introduction and drive sales of existing items. Admittedly, some of the companies assessed have made quantum leaps since 2012 but it seems that they are reacting to trends and not strategically developing processes and solutions to face increasing challenges posed by the digital era.
Overall, the report is worth your time. In fact, it is not current, and may not help pull general trends and lessons given that the findings are limited to just 62 grocery retailers and CPs. But it plainly shows how product information in all its constituents is a stepping stone to increase sales and brand loyalty.
The report is here.
The report is here.
Comments
Thanks for referring to the document. I agree with you that the terms PLM and PIM are quite different in their nature. A good PLM system is key to the Manufacturers in the value chain but of less value to wholesalers and retailers. Many of them have their own brands and as such have similar needs as a manufacturer, tough to a much lesser extent. Where the confusion, as far as I can see is coming from is the difference of managing the Product Lifecycle (PLM) and PLM systems. Each party in the value chain has to manage the product from its birth up to end of live (product Lifecycle Management). Only Manufacturers need however a PLM system whereas wholesales and retails can manage the lifecycle in their ERP and PIM solution.
As such the Capgemini report is somewhat confusing, maybe also because it's outdated with respect to this specific topic
that's great point. Really important the calling to supply chain in the different industry and the distinction between managing product lifecycle and PLM.
Spot on! life is an ever ending lesson :-)
Take a look at the next newsletter (it will be out in few hours)...I tried to dig into it a bit further.
Reality is that yes there is an overlap. Back in 2014 I realised that there were a new "PIM" coming (and it has actually come) that is content centric, where product data is instrumental to create content = new experiences. (see my latest posts)
That's where I see PIM - although I've long left my work in this field.
A side note: I see a very little innovation in this space. Plenty of vendors and auto-elected gurus keep talking about the same old stuff we were in back more than a decade ago.
That's my prediction: PIM will disappear. It will be mainstream, a piece of necessary software blended in a broader context. Not necessarily SaaS...but on this I better shut up :-)