In its second-largest acquisition, Amazon buys the company for $970 million.
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Similarly, Corporate Express expects a rapid reduction in the amount of time it takes to produce sales flyers. It produces nine flyers a year, each of which takes four to six weeks. With a centralized data base, it will be able to pull all the information together and create a flyer in two weeks, Coleman says. Corporate Express also expects an easier time of creating specialized catalogs, such as its catalog for the legal profession or its forthcoming janitorial supplies catalog. “Everything comes from the same fountainhead, so we get a very consistent grouping of data,” he says.
Creating a centralized product database can cost $100,000 and up to license software. Or retailers can opt for ASP delivery of a product from providers such as Evant for which a retailer will pay $15,000 a month, but not have to invest in training of staff. In fact, Harbaugh says the company thought most retailers would be interested in licensing the software and has been surprised to find a great deal of interest in the ASP model, in which Evant hosts and runs the application. “There’s no infrastructure or resource investment,” Harbaugh says. “We are finding that most are interested in the ASP.”
Tough to measure
Measuring ROI on such an investment is not easy, retailers say. Certainly, there’s the immediate payback in reduced re-input of data and fewer temps scrambling to meet deadlines. But there’s also the unmeasurable. “There’s a risk if you don’t have a good system to deliver catalogs,” Fleming says. “If you’re two weeks late with your new catalog, all your customers will go to competitors and you could lose millions.” That risk is exacerbated by the fact that other retailers are looking at the same kinds of systems to streamline their own production. “If you’re on a system that’s seven or eight years old, you run the risk that competitors will move to the new technology and that will give them an advantage,” he says. “Those are difficult to put a value on, but they’re all risks.”
Most reports, though, say Littlewoods, Corporate Express and others who are moving to a centralized database for electronic and print presentation are in the vanguard. Few retailers have adopted single databases yet. “It’s very uncommon,” says Heimes of Virtucom, who works with some of the biggest retailers in the U.S., including Wal-Mart Stores Inc., Best Buy Co. Inc. and Toys R Us Inc. “I know of almost no retailers who are doing it well.” Given the long lead time to implement such systems, the early adopters may find themselves with a little breathing room.
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2002 Guide to Catalog Management Systems