How enhancements in product data technologies can drive cost savings and efficiencies for retailers
A quick look at the news headlines tells us that retail is facing perhaps its greatest challenge ever. Rapid changes in consumer behaviour has been overlaid with the drastic impact of the Covid-19 pandemic on physical retailing. Additionally, there’s been a widespread adoption by previous non-users to online shopping and this has led to retailers big and small having to up their game digitally.
It’s axiomatic that every self-respecting retailer wants to grow. There are two key factors at play right now. Firstly, the absolute necessity to achieve cost savings and efficiencies wherever possible. Secondly, the need to harness the power of product information technology to enhance the offer to the consumer – from now onwards, growth and innovation is only feasible with an agile, scalable and intelligent digital infrastructure.
Costs incurred throughout the product data cycle
Compared with twenty years ago, most retailers have a much larger number of product variants – this could be due to regional variants or shorter product life cycles, but also because of the move towards ‘long-tail’ and ‘marketplace’ retailing online. The variety of different channels, platforms, and physical outlets makes it imperative for retailers to provide customers with complete, accurate, and compelling product information which is scalable to new markets or fluctuating demand.
Let’s look at the costs and inefficiencies involved in not adopting the practices and principles of product information technology which is fit for use. Then, we’ll list some examples of how existing and emerging technologies can increase efficiency, speed up business processes and, ultimately, enhance the consumer experience.
Bad data: all the following exemplify the eternal warning about bad data management: “Junk in, junk out.”;
Retailers are onboarding greater and greater volumes of product data (structured and unstructured) in multiple formats. If there isn’t a clear strategy for managing this, the costs to the business are various;
- It’s very time-consuming if entered manually
- There’s a high risk of human error
- Inconsistencies in taxonomy leading to duplicated effort and ambiguous data
Due to all of the above, it can be time-consuming trying to find (or piece together) the ‘single source of truth’, if that product data is to be usable.
Erroneous decisions made from bad data are bad business practice and expensive. IBM research in 2016 noted that in the US, businesses were losing $3.1 trillion annually because of poor data quality. Imagine how much that figure is now.
Product information – technological enhancements
Once your company gives status to the authenticity of its product data, it has the mindset to establish a framework for governing this data and, as a result, extracting real business value from it as well as gaining the trust of consumers.
So, which technology trends are impacting most on the way retail product information data is managed? We’ve listed just a few of the tangible benefits of technology below, all of which lead to lower costs, increased efficiency and greater consumer satisfaction.
AI / ML
Machine-based learning is opening up a range of opportunities for enhancement of product data. It allows retailers to identify and exploit patterns and insights from the increasing volume of unstructured, user-generated data. Examples include reviews, call centre transcripts and direct consumer queries. PIM system providers are rapidly building these capabilities into their products and the more data processes through this ‘cognitive’ computing, the greater value it has for the retailer and the consumer.
Open Standards and Standardised Interoperability
Open standards and interoperability underpin the principle of dynamic data sharing, which retailers can apply across the entire product data cycle. It is what enables retailers to onboard product data seamlessly and apply it to internal enrichment processes and distribution through sales channels. As cloud integration becomes commonplace, these standards create a win-win situation for all stakeholders, driving speed, efficiency and collaboration.
We’re reaching the point where any electronic machine, device or sensor will be able to instantly send data. Backed by ever faster mobile networks, the IoT is incredibly powerful in collecting, sharing and enriching data. For instance, grocery retailers are already using ‘smart shelves’ to display prices, nutritional details and other data. They can also connect with shoppers’ phones, synchronise digital shopping lists and guide the shopper to the correct shelf locations. Research by Gartner estimated that this year, there are already around 26 billion devices on the internet of things.
Next Generation Product Identification
Increased capability in this area is key for retailers to manage the scourge of counterfeit products and, conversely, enhance consumer trust in the brand. OpenSense NFC-embedded sensor tags can be attached to products in order to verify the authenticity of an item. They are encoded at source and are still readable after the factory seal is broken. For example, drinks manufacturer Diageo uses these for retailing bottles of high-value alcoholic beverages.
As a general trend, cloud computing is what drives the explosion of services companies are able to take advantage of today. For product information management, it has reduced costs considerably, allowing for greater streamlining of systems and optimisation of complex business processes. Additionally, it greatly eases organisation-wide collaboration as well as being extremely flexible in terms of scalability and onboarding vendor data from partners and suppliers.
The above are multiple reasons for why retailers need to both gain control over and take advantage of their digital assets and unstructured data. That ongoing task is too important to be scattered across the business in silos. Governance and ownership are the final pieces of the puzzle, as outlined here:
“The increase in the number of product attributes – for traceability, to drive path-to -purchase, for expanding sales channels, Smart Labels and more – requires a single owner who will be accountable for the product information supply chain.”
Controlling costs, increasing efficiencies, saving time and enhancing the customer experience. All of these objectives are achievable with product information technology – it’s simply a question of getting the right advice, selecting the right technology and making sure everyone is on the same page when it comes to being a data-driven retailer.