Retailers shift their ad spending from TV, radio and print ads to digital ads.
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“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.”
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