Special Retail Report 2012 - The Instant Power of All-Channel Product Information Management

December, 2011 The Instant Power of All-Channel Product Information Management: Increase Sales and Analyst Insight Competitiveness Aberdeen’s Insights provide the analyst perspective of the Customers are shopping through more channels, and information and research as drawn from an shopping experience need to be consistent across these channels. Retailers aggregated view of the research need to meet the consumer’s expectations from a product, price, surveys, interviews, and promotion, and overall experience standpoint. Updated and integrated data analysis product information management (PIM) is key to providing an optimal shopping experience, regardless of the consumer's channel of choice. This analyst insight assesses the role of product information management (PIM) in an omni-channel retail environment, and the impact that updating information in real-time has on the business and the customer. Between November and December 2011, Aberdeen surveyed 80 retail enterprises for the 2012 Omni-Channel Retail Experience report. This analyst insight draws data and insights from this research to examine the use of PIM in today's retail environment. There are two aspects data management and consumption. PIM's Strategic Role in an Omni-Channel World PIM makes data management Aberdeen data shows that uniform branding has been a problem for much easier and from a retailers as they evolve and expand their channel offerings. According to the consumption standpoint we October 2011 Customer-Centric Retailing report, 52% of retailers surveyed need the ability to meet the indicated that elevated customer expectations is the top customer different consumption needs of experience pressure they face. Today's consumer uses multiple channels to our users. research products before making a purchase decision. Retailers, in turn, ~ Dayakar Prabhakar, VP of must align their brand, from product availability to corporate Engineering, Calumet communications, across channels to fulfill these elevated customer Photographic expectations. One of the most important aspects of maintaining a consistent brand is establishing consistent product information across all selling channels. PIM allows the retailer to maintain a centrally-located set of product data that can be updated in real-time to feed all appropriate channels of commerce. According to data from the upcoming Omni- Channel Retailing report, ensuring that product information is up-to-date is a top priority for 66% of respondents. However, most retailers are not using a PIM solution to make these updates, relying instead on slower and more error-prone manual processes. Business Drivers for PIM and a Unified Channel Approach Currently, only one-third (33%) of retailers use a PIM solution. However, 47% of survey respondents indicated plans to implement this technology in the near-future. Figure 1 below shows the key pressures and challenges This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. The Instant Power of All-Channel Product Information Management Page 2 retailers are facing when it comes to product information management. The top pressure facing retailers is lost sales opportunity costs. A sale can be lost for many reasons, but inaccurate or disjointed product information ranks high on the list. Consumers need to have the most up to date product information, including product pricing, product attributes, and product availability. If this information is not consistent across channels, consumer confusion ensues, which can cause a lost sale. Retailers are feeling pressured by customer expectations of a seamless experience regardless of channel. Real-time updates to product information are a necessity when dealing with an omni-channel customer. Such consumers will shop various channels in parallel looking for discrepancies in price. A PIM solution can safeguard against over-discounting, and keep the customer apprised of changing product attributes, regardless of the channel of interaction. Figure 1: Top Pressures Lost sales opportunity costs Pressures Customer expects seamless experience Legacy Too few IT technology resources applications Challenges Source: Aberdeen Group, December 2011 The top two PIM-related challenges facing retailers are legacy technology applications and insufficient IT resources within the organization. Legacy applications have long been the thorn in the side of retail executives, since too much capital has already been invested in these systems for them to be simply "ripped and replaced." With multiple layers of interfaces and integration, legacy applications are rooted in the very being of the retail environment. Additional technology solutions increase the layers of integration the organization must navigate. Insufficient IT resources make these integration issues more common. Legacy applications are reducing the productivity of retailers as they strive to make improvements across channels. Without the ability to update product information seamlessly in © 2011 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897 The Instant Power of All-Channel Product Information Management Page 3 real-time, retailers are missing out on an entire world of omni-channel shoppers. PIM-Related Inefficiencies for Retailers Across the board, retailers have indicated that they are not efficient at the three elements of product information updates: the creation, modification, and publication of product data. Table 1 below highlights the inefficiencies related to updating product information across channels. The area that troubles retailers the most is the modification of product data for all channels--35% indicate they are inefficient, and only 28% indicate they are efficient. Modifying product data involves pulling all product information together from all channels, and ensuring that the information is accurate and consistent. Retailers with a PIM solution in place are more efficient, as real- time updates are pushed seamlessly to all channels. Even retailers without a PIM solution are having less trouble publishing information than modifying it. This is likely due to the siloed channel approach adopted by most retailers. As channels operate in isolated siloes, aggregating and combining product data becomes a daunting task. Retailers still have a ways to go before they can integrate channels to the fullest extent. Table 1: Creating product data for all channels and customers Data Summary Inefficient Neutral Efficient Creation of product data 28% 41% 31% for all channels Modification of product 35% 37% 28% In the past, we have stored data for all channels product information in 5 different systems. We have 5 Publication of product 28% 33% 40% different ERP systems in 5 data for all channels different countries. Currently we also store data in the PIM.