Growth in product assortment boosts case for web-based product data

As retailers become bigger, their need for efficiency in managing product data will become even greater. And that will make the case for common data registries that will make product information available to retailers over the web, attendees at the National Retail Federation Annual Convention & Expo in New York heard this week. For instance, Carrefours, the European retailer, stocks as many as 3 million SKUs across 30 countries. Each SKU requires 25 minutes per year for data maintenance, Jeremy Hollows, Carrefours’ director of b2b marketplace, said at the "Data Synchronization: The Cornerstone of Effective Collaboration" session on Monday. "It all comes down to money; how much can we save by automating?" he said.

AMR Research Inc. vice president and general manager of retail and CPG advisory services John Fontanella, who moderated the session, reported that retailers and consumer packaged goods manufacturers spend as much as $30 billion a year acquiring product, then manipulating it for use, such as inputting product measurements, taking photos and describing other attributes.

Even EDI, which many had touted as the answer to product data synchronization, is a flawed process. Steve David, CIO of Procter & Gamble Inc., told attendees that 70% of orders come into P&G in an EDI format, yet half require manual intervention to clean up the product data that is being ordered. "You can employ an army of ants who do nothing but rationalize your data, so you can justify the costs internally that way," he said. "All other applications are free."

Furthermore, David said, bad data is responsible for half of P&G’s annual $250 million in products that retailers return or refuse upon delivery. "It doesn’t take much to make senior management understand there are big bucks involved here and that there’s a productivity issue," he said. Without having to process returns and refusals, "you can get people doing what they’re supposed to be doing--selling and moving product," he said.

While data synchronization efforts may seem like a big job, retailers and manufacturers can take it in small bites to make it more manageable, speakers said. "Don’t think you need to spend a lot on technology to get started," David said. "Get the data and print it out and see what you need to do. Don’t take the approach of ‘Build it and they will come’ because you’ll get it wrong."

Retailers need t make sure they are prepared to tackle the issue, warned Susie McIntosh Hinson, senior vice president of supermarket retailer Food Lion LLC. "Don’t underestimate your corporate readiness," she said.