Groupon says its focus is on the bottom line, rather than top-line growth.
Product info is gold to retailers, but finding it is challenging
Retailers face a big challenge as they beef up their web sites: Getting product information. The trend in web design has been to more and more data and it’s created a bottomless maw for information. On top of that, the need for more product data comes at a time when retailers have been operating under restrictive budgets. Thus Micro Warehouse Inc. faced a major problem when it wanted to increase its online offerings: How to get product information for 100,000 more SKUs as it expanded product offerings from 30,000 SKUs to 130,000.
Getting data on that many products would be a huge headache. “Our product managers would have to go to manufacturers and distributors to get the information, then enter it manually into the product database,” says Nihad Hafiz, Micro Warehouse’s CIO and executive vice president of e-commerce. “And there is never any consistency among manufacturers, the information is difficult to maintain and certain attributes among products just don’t match up.”
Micro Warehouse solved the problem by turning to CNET Networks Inc.’s CNET Channel to provide product data for the additional SKUs, Hafiz says. CNET Channel compiles and normalizes product data from 5,000 manufacturers. It then sells the data to retailers to re-use on web sites, in catalogs or flyers, and as reference material for phone center sales reps. That’s just the way that Micro Warehouse, which was acquired last month by Computer Discount Warehouse, wanted to use the information. “Because of its very structured data, CNET made it quite easy,” Hafiz says.
With the agreement, Micro Warehouse becomes part of a small group of retailers who are trusting their product data to outsourcers. Many retailers, especially fashion retailers and large retailers with in-house marketing and catalog operations, may choose never to outsource their product data. Fashion retailers want to maintain total control over the look and feel of their sites. And large retailers already have considerable investments in legacy content management systems and often have the in-house staff to create the content they need. But others will find the option attractive. “Outsourcing does provide an immediate opportunity to ratchet up your product offerings,” says Patti Freeman Evans, analyst with Jupiter Research.
Retailing has always been a content-driven industry. But with the rise of the Internet and multi-channel shopping, the content can no longer reside in the heads of sales associates. Retailers and brand-name product manufacturers must be able to deliver data to customers in whatever channel without having to re-create the data for each purpose. In addition, they must make sure they are presenting a consistent message across channels. “One of the key developments in the marketplace is the notion that you author the content once then distribute it everywhere,” says Geoffrey Bock, senior consultant with the Patricia Seybold Group.
Merging the silos
Especially as retailers adopt multi-channel strategies, awareness of the problem of content management is growing. “There are lots of retail silos,” Bock says, “and each is built for a vertical application. There’s a web silo, a call center silo, a logistics silo, an importer and exporter silo and on and on. Retailers need to do the internal business-process engineering to bring all the silos together.”
Bringing the silos together means creating the content once and distributing it everywhere. That can take a number of forms. And retailer’s outsourcing options can come from a number of places. Macys.com, for instance, uses web content from Chanel Inc. for the Chanel section of its online store. Chanel creates its own product information, then uses WebCollage Inc.’s Syndicator product to create a mini-site with the product data it wants to present. It then delivers that mini-site to retailers’ web sites.
The benefit to Macy’s is that it gets high quality content that doesn’t cost anything to implement. “It’s very much like in the real world, where all the cosmetic counters in department stores have the look and feel of the individual brand,” says Kent Anderson, president of Macys.com, the online operation of Federated Department Stores Inc.’s Macy’s chain. “This is the electronic version.”
Chanel gets control over its brand and image-an extremely important consideration to cosmetics manufacturers. “This allows us to create our own mini web site that lives inside our partner’s web site but that also allows us to tell our own story,” says Christy Roider, director of Internet marketing for Chanel.
Like most retailers, Micro Warehouse used to compile product descriptions itself, searching manufacturers’ brochures and web sites for the necessary data. Often the data were inconsistent or incomplete. For instance, information about IBM notebook computers could come from not only the manufacturer but distributors as well. “The manufacturer might highlight one thing and the distributor something else,” Hafiz says. The problem becomes compounded when different manufacturers enter the equation. “Attributes would not match up in the same category,” Hafiz says. “You couldn’t really compare products.”
CNET addresses the problem with a staff of researchers with high-tech backgrounds-based in Russia-whose only job is to gather and update information about products from some 5,000 manufacturers. Staffers enter the data into databases using drop-down menus and prompts-never keying in the information themselves-to ensure uniformity, says Brad Bowers, vice president of business development and general manager of CNET Channel’s North American operation.
Hafiz reports that Micro Warehouse has reduced its data management staff from dozens-he would not be more specific-to five, with a corresponding cost savings. The new system also has increased call center reps’ productivity. While he would not provide specifics, Hafiz notes that call center reps are more productive because they have not only faster access to data but also faster access to side-by-side comparisons using consistent data. Previously, they had to search different web sites and retrieve information from different databases when a customer wanted to weigh the merits of a variety of products. Today, they tap into a single database. “It’s made a huge difference in how productive they are,” Hafiz says. “Call times have been reduced.”