The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Retailers portray their products to consumers in many ways, and need a unified palette to achieve pleasing results.
Retailers today use data to paint portraits of the products they sell. These portraits often are rich with photos and videos and strive to have the original, credible and complete content that consumers—and Google Inc.'s search algorithm—seek. They must also be accurate, displaying current inventory levels and up-to-the-minute pricing.
The resulting portraits show up on e-commerce and mobile commerce sites and, through data feeds, in other online marketing channels. For multichannel retailers, portrait elements show up in stores and in offline collateral, like print catalogs and circulars.
The trouble is that painting such portraits requires a lot of painters. These painters have to use the same brushes and styles if the portraits released to the world are to remain uniform. If one painter moves out of sync the data that show up on an e-commerce site may not match what appear in an online advertisement or print circular, for example, and mismatched data can undermine retailers' ability to effectively communicate with consumers.
To help keep data misfires at bay, retailers are developing methods to organize their product data so that all contributors and data users keep to the same palette. Some are deploying commercial product information management (PIM) software, which serve as a central repository for all product data, while others are building data management programs designed to serve their unique needs. Whether using a vendor's PIM or a custom-made tool, retailers say that a systematic approach to data management is becoming more important, especially for retailers whose product catalogs keep changing and who sell through more than one channel.
For Avon Products Inc., which sells cosmetics in 80 markets globally through a combination of the web, catalogs and direct sales representatives, the data management wake-up call came a little more than two years ago. That's when the Rye, N.Y.-based company wanted to consolidate a portion of the catalog creation process to an office in Argentina, where staff would produce campaign catalogs for multiple markets in multiple languages.
New Avon catalogs come out about every two weeks, and what consumers see on Avon.com and elsewhere is driven by what appears in the catalogs. While Avon largely sells the same products to consumers around the world, campaigns are determined by regional marketing teams, and promotions vary. For example, Mother's Day occurs in May in the United States, but usually falls in March in the United Kingdom, and promotions must be adjusted accordingly.
"The question was, how do we put it all together in a central place so that when we want to publish it is easy to do?" says John Madden, senior manager, information technology marketing, at Avon. "We couldn't do that in the landscape we had. Our publishing system was common in name only. We were not set up to share information very well."
After evaluating several commercial PIM applications, Avon installed an enterprise edition from Agility Multichannel Ltd. The primary deployment is in Rye, with local extensions in Argentina and in other places where Avon has creative centers. It is currently implementing a PIM extension with Agility in Poland, where an Avon creative team will soon generate catalogs for 23 markets in 23 languages. A center in Moscow is also in the works.
The product data management process, Madden says, typically starts in Rye when Avon staff add new product data to Avon's master computer system. At this point, the information is all about the product—for example, ingredients, size, packaging, a general product description in English—and a feed uploads that data to the Agility system nightly. Through the PIM, local marketing and creative teams can access this uniform information and begin using it to plan their campaigns. Local staff then begin translating the product name and description, take photos with models reflective of the target market as needed, and set promotional schedules. All these data points are recorded in the PIM.
When it is time to include the new product in a catalog, a designer taps into the PIM, pulls the data and photos and drags them on a page template in Adobe InDesign, a publishing and layout program, and then saves the completed page in the PIM. Since catalogs steer Avon's marketing activity, the web team then taps into the PIM to grab what the catalog team created and pulls those elements onto the web. They make tweaks as needed, such as resizing print-quality images into lighter-weight versions so that they load more quickly on the web.
"The challenge is that we have an extensive product line and we want to target the sales of these products by market, with different campaign cycles, multiple languages, multiple currencies and different types of offers," Madden says. "The PIM helps us take all that information and produce a high-quality brochure."
Madden declined to say how much Agility's enterprise edition cost but says the vendor bases its price on the number of users. He characterized the expense as reasonable by Avon's standards. Avon reported $10.7 billion in sales in 2012 and is No. 42 on the Internet Retailer Top 500 Guide, based on an Internet Retailer-estimated $781 million in web sales last year.
Agility Multichannel CEO Richard Hunt says retailers using the enterprise edition typically have hundreds of users, if not over 1,000. While some large companies like Avon license the software and install it on their own hardware, Agility also hosts a version for smaller clients that they access via the web, a model known as software as a service.
"For a small implementation, the cost can be as low as $2,000 per month for a couple of users," Hunt says. He says the typical retailer client using the hosted product has five users; some have as few as two.
The prices for PIM technology have come down over the last two to three years as web-hosted software models gained a foothold. This coincided with retailers expanding their online sales and marketing channels, and store-based merchants putting more of a priority on using data to more effectively merge their web and store marketing, such as having an e-commerce site reflect current local store inventory.