Keeping It Consistent

When the web took its place beside retail, mail-order and the telephone call center as a commerce venue, it brought the number of mainstream channels in which shoppers can actually fork over a credit card number and make a purchase to four. Look beyond transactional channels to the number of vehicles retailers use to drive shoppers to them, however, and it’s a much bigger—and harder to manage—universe.

Beyond traditional promotional platforms such as direct mail and various other outlets for advertising, the web serves up promotions electronically across a broad swath of different sites, portals, and e-mail programs. Add to the various categories of media output the fact that promotions within categories may differ by geographic region, and it sums up to a major organizational headache for retailers trying to keep product and promotional information in synch across channels and outlets.

“At a lot our customers today, this has been siloed,” says Marci Rogers, vice president of marketing at Flow Systems Inc., a provider of promotions management technology and services. “There is the e-commerce group and the print catalog group, and they are not always talking to make sure that offers and promotions are consistent.”

Technology vendors are tackling the issue with products and systems that aim to ensure that consistency. Some, with roots in data synchronization efforts to connect with suppliers, are delivering added marketing benefits by organizing product data and promotions, cross-channel, in the same central repository. Others are focused more on output, allowing retailers to pull from one system the current product and promotions data needed, for example, to produce both a web promotion and a print flier. Either way, these systems and tools are bringing automation to what has been a largely manually oriented, cut-and-paste approach to reconciling product, pricing, and promotions information across channels. And they’re paying dividends in reducing both staff hours and human error in managing the process.

The challenge of aligning pricing, products and promotions as offered online with what’s in local stores has sparked growing interest in geographically based web search, and new distribution services that deliver national store promotions on a localized basis.

Says Brian Hand, CEO of online promotions distributor CrossMedia Services Inc.: “In the last two years, a lot of retailers have realized that while web sites are a great way to sell products, a majority of people are going to web sites to research before they go to a store to buy. People are starting to use the web to figure out what is going on around where they live and work.”

That’s reflected in efforts by portals such as AOL and Yahoo and search engines such as Google to provide geographically-based localized search options.

The challenge there is how to serve up local information on a web site that can be accessed from anywhere. “What retailers sell online and in their stores can be completely different. And what you want to show in Chicago may be very different from what you want to show in Miami,” Hand says.

Lead with local

To make the best use of the tens of millions of dollars that big box, grocery and pharmacy chains already spend on localized print advertising, and leverage the traffic from millions of shoppers who visit their site before going to their stores, retailers should find a way to lead with those local promotions on their web site, Hand argues.

CrossMedia Services does that, with technology that serves localized retail fliers to a web user based on where the user is located. While it’s technologically possible to determine the user’s location by identifying an IP address, CrossMedia’s hosted service instead asks users to supply a ZIP code or city of location before it serves any promotions. IP-sensing technology has some drawbacks, Hand contends, for instance, assigning local promotions to a shopper who’s logging on from work, which may be some distance from where he or she actually shops.

The hosted flier distribution service is used to serve local offers and information by dozens of retailers ranging from Sears, Roebuck and Co. to Staples Inc. A recently launched product, BroadReach, takes it a step further. It distributes fliers to other online destinations, such as portals, yellow pages sites and the web sites of local media companies, where they are served up in the same localized fashion.

The service, already available to web shoppers at CrossMedia’s own site, ShoppingList.com, rolled out in January.

A push-button job

Product and pricing information across multiple media outlets is in theory a push-button job—if the data are easily accessible But for many retailers dealing with print, web, and catalog promotions, that’s not the case. And that can add up to wasted hours and errors when attempting to line it all up manually. Take the case of the retailer who wants to update a print flier from last season with this season’s information—a flier that the retailer also is planning to put online.

“When data aren’t centralized, they could be anywhere,” says Rogers. “It could be in an ERP (enterprise resource planning) system, or a printout of a Word document. Somebody has to find the previous flier, figure out the new content and put it all together.”

Between the rounds of review then required by the art department and the marketing department, it’s a manual, paper-driven process that could take months, with the possibility of human error at every step.

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In fact, in 2003, consulting firm BearingPoint Inc. calculated that a large retailer that runs 50 different, localized versions of its weekly circular incurs as much as $500,000 per week in reworking the content and other non-value added touches.

Flow Systems’ Retail Promotions Management suite seeks to curtail such resource drain with software and hosted services that help retailers plan, create and publish promotions to multiple media formats. The system organizes all product, pricing, and historical information in a central “content factory.” Flow Systems works with retailers to write the business rules that automatically pull from the central system the most current information.

“Depending on how the rules are written, there doesn’t even have to be any human intervention,” says Rogers.

Rogers adds that because such information often is widely dispersed within retail organizations, it requires new users of its product to change their business processes. And the software isn’t cheap. Software licenses are in the range of $200,000 to $300,000, though Flow Systems also offers a hosted service. The payoff, Rogers contends, is in shortened production time, accurate data and the ability to launch simultaneous promotions in multiple channels.

“We’ve found that this can lead to a 40% reduction in production cycle time for promotions,” Rogers adds. One existing customer’s catalog production cycle, for example, was reduced from about 16 weeks to six weeks.

A side benefit

Gaining data synchronization with suppliers was the original objective driving most of its major retail customers to Trigo Technologies’ Product Information Management system, but for many, the ability to use the system to drive multi-channel content has been a side benefit of that effort, says Dan Druker, vice president of marketing. Trigo was acquired by IBM Corp. in March and added to IBM’s WebSphere middleware portfolio.

Trigo’s PIM system, available since 2000 and used by retailers such as Albertson’s Inc. and Staples, gathers, centralizes and makes accessible to merchandising, logistics and pricing departments information from trading partners. The system replaces the retailer’s item form, which records product information as a new product enters the system, and vendor and store masters, which record information from the product vendor and about store disposition.

Says Druker, “Once you’ve got that consistent picture, from a retailer’s perspective, you can use that to help the customer experience online or in the store.”

Though the system is rooted in facilitating operations on the back end, the market-facing applications in content and promotions management are numerous, Druker says. With centralized, current information about products, prices and stores, for example, the system could automatically generate content for different fliers and catalog inserts. “Those deliverables are driven by the same content, so you will never see the product description in your weekly circular out of synch with the truth because someone has made a typo in entering the price,” Druker says.

In addition, PIM systems, once in place, make it virtually free for retailers to offer their entire product catalog through their commerce sites instead of just a limited number of products that otherwise would require manual entry, item by item. With a product catalog that numbers in the millions of items, a store retailer can increase sales per square foot by putting in web-enabled kiosks that let shoppers order items they don’t see in the store, a functionality easily managed by a PIM system, Drucker contends.

Trigo’s PIM starts at about $200,000 for software, with services on top of that. For very large retailers that need to make the system accessible to tens of thousands of trading partners and perhaps 10,000 internal employees, the cost can be in the range of $10 million. While Druker says retailers start to see benefits of PIM implementation in as soon as three months, the full realization of those benefits will continue over time. For some retailers, the PIM, with its linked front and the back end functionalities, is replacing as many as 20 to 30 legacy systems and becoming the core system off which the retailer runs much of its business.

The acquisition by IBM will eventually bring some of that PIM functionality to smaller retailers. “As a stand-alone company, we were very focused on going after the elephants. As part of IBM we will also be focused on the small and mid-sized business market,” says Drucker. “They all have the same businesses issues.”

Retailers who lead in tighter cross-channel management of product and promotions data will be the first to benefit as shoppers hop between channels and expect consistency channel to channel.

Across channels, “Products are sold on the basis of the information the consumer gets about them,” Druker says. “So having accurate, complete, current information becomes an enormous advantage for companies that are trying to sell.”

mary@verticalwebmedia.com

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