Next Generation Information and Data Management for Commerce Relevancy: Combining product, supplier, customer, and location data to deliver

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1 Next Generation Information and Data Management for Commerce Relevancy: Combining product, supplier, customer, and location data to deliver consistency and personalization in omnichannel retailing FitForCommerce Whitepaper Series The retail environment has changed dramatically in recent years. With instant access to information anywhere and from any device, consumers are in control of the purchasing process and solid product information is quickly becoming a commodity. In an omnichannel environment, consistency and accuracy across all customer touch points is no longer enough retailers and brand manufacturers need to start considering product information in terms of relevancy, to personalize the shopping experience and stay competitive. October 2013 Tim Toews and Rod Forsythe, FitForCommerce Copyright 2012 FitForCommerce, Copyright All Rights 2012 Reserve FitForCommerce, All Rights Reserved

2 Introduction The evolution of the retail environment, driven by advances in technology and, has transformed the way research and buy products and has taken us from single channel, or siloed channels, to omnichannel retailing. Customers expect to find helpful product information and make purchases when and how it is most convenient to them. As a result, delivering the right product and brand information at every customer touch point has never been more important. The PIM Impact With PIM, 62% of manufacturers improve their conversion rate and 80% see a pronounced increase in margins. Additionally, 69% of distributors see an increase in acquisitions of new customers. Source: PIM- ROI.com Amazon has perfected content delivery with linear product information, images, speeds- and- feeds, reviews and more, which makes the shopping experience extremely compelling. Delivery of the right information, at the right time, targeted to the right people, will help retailers and brand manufacturers increase relevancy in the shopping process and position them to better compete against Amazon and other competitors. At FitForCommerce, we continuously see the profound impact that consistent and accurate product information has on the customer buying decision. Brand manufacturers are also taking note and responding to customer demands by opening up direct sales channels to end customers. But in this hyper- connected world where compe fingertips, retailers and brand manufacturers, need not only ensure that the information provided is consistent, but also timely, highly relevant and even personalized in order to differentiate and stay ahead. A Product Information Management (PIM) solution helps turn product data into a competitive advantage by helping organizations present information that is complete, but it is no longer enough. The next wave of PIM solutions must address product information relevancy at every channel and all customer interactions to ensure commerce relevancy. In this paper we will explore: Changing customer expectations and buying behaviors The critical role of a PIM solution in omnichannel retailing Why and how PIM solutions need to address relevancy by combining product and customer data How companies can prepare for the age of commerce relevancy 2 P age

3 The New Shopping Paradigm The empowered consumer information makes all the difference when it comes to making a purchase decision whether buying online or in- store. Paul Barron, Business Process Consultant Retail, Halfords (UK) In recent years FitForCommerce has witnessed the retail environment undergo significant transformation and all signs point toward continued change. We see new technologies driving the rapid growth of new channels, which have played a fundamental role in changing the way consumers research and purchase products. Single channel retailers and brand manufacturers have been forced to add new sales and promotional channels to their sales and marketing strategies in order to keep up with customer demands and stay competitive. We live in an age where information is literally at our fingertips and when it comes to shopping this means that the consumer is in control. Web, mobile and social technologies have empowered the consumer with instant access to information and purchasing options from anywhere in the world, at any time. As the consumer travels interchangeably between channels, he/she expects the shopping experience to be seamless and consistent at all touch points. This omnichannel approach to retailing increases the challenges faced by retailers with respect to product information management. Delivering accurate and timely information across all channels is crucial, but also adds an additional layer of complexity to the management of data. This is why the need for streamlined processes and centralized systems to manage content is more critical now than ever. How retailers manage this process has significant impact on the customer experience and overall performance of the business. Omnichannel Customer Touch Points 3 P age

4 FitForCommerce, 35% of the 200+ retail and branded manufacturers that we work with have already or are in the process of selecting and implementing a PIM solution to support their omnichannel strategies. Bernardine Wu, Founder and CEO, FitForCommerce Leveraging PIM to ensure consistency Effectively leveraging product and non- multiple channels is quickly becoming an imperative. In an omnichannel environment, product information management can be overwhelming, and at FitForCommerce, we see an increasing number of retailers and branded manufacturers struggling with the operational challenges of managing this process. These challenges have profound implications to the customer shopping experience, loyalty and the bottom line. Consequently, product information management has become a top priority for many retailers and branded manufacturers. To manage the complex environment and flow of product information, retailers and manufacturers need a comprehensive solution. In our engagements and when appropriate, we continue to recommend that organizations implement a Product Information Management solution (PIM) that can meet this need by combining product information with robust capabilities in data integration and governance. As a single repository of all product data for distribution in all channels, a PIM solution provides a cohesive, centralized platform for omnichannel retail that ensures that accurate and consistent data is distributed across all relevant touch points. Consistent & Accurate Distribution of Product Information in Omnichannel Retail 4 P age

5 The Benefits of PIM bring suppliers, intermediaries and end customers closer together. With PIM we have a central product and master data platform that is the basis for our multichannel commerce strategy. Eddie Perdok, CEO, Kramp Implementing a PIM solution improves profitability and increases customer satisfaction by helping online retailers present product information in a form that is complete, accurate, easy to understand and consistent. High quality product data is useless if an organization cannot leverage that data for quicker time to market, improved performance across all channels, and greater customer satisfaction. Accelerate time- to- market with product launches across channels Increase conversions and lower return rates by ensuring customers have product information in an easy- to- consume form Lower manual processing costs by merging the best product content from multiple suppliers broader assortment of products The most valuable commodity you have as an organization is the data itself. A good PIM solution helps you get as much out of that data Paul Donnelly, Director of Product Management, Lawson Products. Increase customer satisfaction through more consistent information and brand identity across sales channels Information Everywhere, Anytime Bordering on information overload Consumers are in control of when, where and how they access information, which is why consistency is so important. But this newly empowered consumer can just as easily access product descriptions, pricing, and reviews from other sources, and commonly move from one site to another before making their final purchase decision. This has a significant impact on customer loyalty and retailers can no longer rely on branding, product selection and information alone to differentiate and satisfy customer demands. Good product information is quickly becoming a commodity, which adds greater pressure on the retailer to ensure that data is not only consistent, but also highly relevant. 5 P age

6 Turning data into a competitive advantage tool that does everything for us. Whether feeding data to our ERP system or publishing products to our website and print catalog everything starts in the PI Jim Ryba, Senior Director of Product Management, Lawson Products Customers expect a personal and highly relevant shopping experience no matter which channels they engage. In an omnichannel environment, customers interact with multiple touch points during the purchasing process and it is important that retailers capture this data and use it to their advantage. In the store environment this means ensuring that store associates are informed about product details, associated products, customer history and more. In call centers, representatives must also have the tools to access all product and customer data to deliver the greatest customer service experience. And online, this means automating the delivery of product information relevant to the individual customer. Consistency branding, product information and operational consistency at all customer touchpoints Relevancy product information relevancy to the individual customer at all touch points Retailers can turn data into a competitive advantage by ensuring that product information is not only consistent and readily available to all, but also highly relevant. It is this individualized attention that differentiates the experience and prevents the customer from going elsewhere. Competitive Advantage through Relevancy Leveraging PIM for product enrichment In addition to consistency, the inherent advantage of implementing a PIM solution is the enablement of capabilities centered on product enrichment and presentation to personalize the shopper s product experience. Through predefined data associations and rule management, the PIM solution can be used to personalize and deliver a rich product experience to all customers by combining static and other unstructured data. Individual product details can be embellished with product data such as product attributes, ratings, recommendations, alternative suggestions, substitutes and more, which is automatically defined and distributed to any channel in real- time via the PIM solution. This rich data experience has a significant impact on buyer confidence and drives upsell and cross- sell opportunities. 6 P age

7 customer opinion and supplier knowledge together. Online customer evaluation combined with the knowledge of the manufacturer puts us in the position of being able to optimally control our stock and enrich our product data. Eddie Perdok, CEO, Kramp To further augment product information, the PIM solution can interface with customer review platforms to deliver relevant customer reviews to install confidence in the purchasing decision. Product Listing Before and After PIM A PIM solution thereby enables retailers to deliver and present relevant product information, allowing customers to make more informed decisions much faster and simpler, and ensures that they order exactly what they need and receive exactly what they expect. This rich product experience improves sales and reduces return rates. Using Big Data to drive commerce relevancy In a fiercely competitive market, customer loyalty is a crucial differentiator in driving revenue. Going beyond personalization at the product level, by analyzing combined product, customer, location and supplier data to provide an optimized, personal experience, retailers can target shoppers by anticipating their needs, which in turn builds loyalty. Product Data Supplier Customer Data Location Data Relevancy 7 P age

8 and call center representatives must be as informed as their customers at all times. Online platforms must proactively serve content that is targeted, personalized and relevant to their customer. Kerry Martin VP, Sr. Consultant, FitForCommerce Key data integration will enable retailers and brand manufacturers to target their marketing campaigns and product presentation based on customer location, preferences, habits and more. The result of these actionable insights is a tailored shopping experience which is as relevant, cohesive and inspirational as possible at all customer touch points including marketing, merchandising, product presentation and customer service. Tailored product recommendations Targeted marketing and promotions Individualized customer service Optimized in- store experience Combining product information with customer data such as transaction history, demographics, location and segmentation data will boost the relevancy of personalized product recommendations and enable retailers to deliver product recommendations that are not only related to the actual product, but also tailored to the individual customer. Connecting a PIM solution to content and merchandising systems allows for automated personalization of promotions and merchandise targeting online and via campaigns to each customer, increasing engagement and conversion rates. In an omnichannel environment, all relevant data needs to be accessible to all sales channels. If a customer contacts a call center for support, the representative must be able to leverage product search and automatic recommendations for intelligent cross- and up- selling within seconds. The system needs to connect customer profiles and product information as well as product availability. Similarly, but more challenging, in an optimized in- store experience, associates should be able to access all relevant customer and product data to better service the customer. Focus on commerce relevancy recommendations via promotions and retargeted online advertising daily. But how personalized and relevant are these messages really? PIM plays an essential role in supporting a good omnichannel and targeted experience because it normalizes product content across all channels and form factors. With a PIM solution, retailers can ensure that product information is presented accurately and consistently across all channels and that the product experience is enriched with product- related content. But it is still a very product- centric experience. To truly capture the attention of the customer, convert to a purchase and achieve customer loyalty, the experience must become highly targeted and customer- centric. 8 P age The next generation of PIM and Master Data Management (MDM) solution will most likely come with built- in customer- centric personalization functionality which combines all relevant data throughout the buying process. Until then, to achieve this highly

9 personalized customer experience, through the combination of product and behavioral data, at FitForCommerce, we recommend retailers ensure that they implement a PIM solution, one that is fully integrated with other operational platforms in the retail ecosystem such as the ecommerce platform, recommendation engine, and content management system. The effective flow of behavioral data generated throughout the ecosystem, managed with a PIM, allows retailers to guide and inspire customers with instant, highly relevant content in all channels, making all the difference in boosting the quality of their shopping experience and ultimately, their loyalty. The next wave of PIM solutions will also include advances in integration with customer data and insights provided by Big Data, allowing PIM to essentially become a product- intense version of a CRM solution driving commerce relevancy at all touch points. 9 P age

10 Conclusion In omnichannel retailing, where the customer interacts with the retailer or brand at different touch points and at different times, consistency and accuracy in product information is critical. Easy access to information has resulted in increased competition. If your customer is not able to find solid product information at your retail or brand destination, competitive sources are just a click away. The implementation of a Product Information Management (PIM) solution that provides a cohesive and centralized repository for all product data is the first step toward ensuring that accurate and consistent product information is distributed across all relevant touch points. In addition, at the product level, a PIM solution will enrich the product experience with associated products, reviews and more. In an age that is trending toward information overload, consistency, accuracy and product- level enrichment is no longer enough to attract and retain customers. Retailers and brands must find new ways to engage customers, convert to sales and foster loyalty. Organizations need to turn product information into a competitive advantage instead of a commodity, and the key to doing so is through personalization and relevancy. As we move toward the age of commerce relevancy, the combination of supplier, product, customer and location data will likely become a standard PIM feature, but until then retailers and brand manufacturers should integrate platforms throughout their ecosystem to ensure the flow of product, customer, location and supplier data and use this information to automatically provide a highly personal and customer- centric experience. 10 P age

11 This white paper is made possible by the support of Informatica: integration software. Thousands of enterprises worldwide depend on Informatica data integration, data quality, and big data solutions to access, integrate, and trust their information assets residing on premise and in the Cloud. For more information, visit 11 P age

12 FitForCommerce 40 Highland Ave Short Hills, NJ phone fax FitForCommerce is a leading consulting firm, helping ecommerce and multichannel retailers and manufacturers grow their online retail operations. Our consultants bring decades of practical, hands- on experience to guide merchants in defining ecommerce strategy, selecting the right technologies, and building online marketing, merchandising and best- in- class website experiences all using a rigorous ecommerce Diligence process and a vast knowledge base built on our work with hundreds of leading retailers. Copyright 2013 All rights reserved. FitForCommerce, the FitForCommerce logo, and all other FitForCommerce products and services are trademarks of FitForCommerce. All other trademarks are the property of their respective owners. 12 P age