New Heiler Software Corporate Blog

Dear readers and subscribers. The Heiler Software PIM-360-Blog has moved and has got a new design including an own domain. On the completely redesigned blog you can always expect new and interesting articles of our experts in Product Information Management (PIM) and Catalog Procurement. We would be pleased if you follow us to the new domain and subscribe.

The new blog can be found at this address: blog.heiler.com

Increases Margins by 44 %, with a conversion rate of 35 %

Research points out that the return on investment (ROI) from product information in multichannel commerce:

The results of the international study shows a return on investment (ROI) from an Enterprise Product Information Management (PIM) solution is possible within the framework of a multichannel commerce strategy. Over 400 retailers and manufacturers from 14 countries participated in the extensive study by Heiler Software.

The study at www.pimroi.com delivered measurable results and demonstrated the benchmarks for how international retailers and manufacturers can optimize their business model revenue figures and costs with Product Information Management (PIM).

The enormous growth rate of e-commerce also means an increase in the demand for data quality in the web shop. When looking at the survey results it can be clearly seen that the conversion rate, margins and acquisition of new customers, are seen as the most important factors.

The increase of the conversion rate without PIM was at 27 %,with PIM  at 62 % (+ 35%) and likewise the increase in profit margin without PIM was at 36 % and with PIM at 80 % (+ 44 %) was seen as a significant PIM benefit. However the acquisition of customers at 69 % with PIM was estimated as being 30 % higher than the performance without PIM.

75% More Speed for e-commerce

The length of time from changing a product at the e-commerce site is an important key performance indicator for the web shop. Here the use of PIM reduces the period of time significantly from an average of four hours to one hour.

Success factor: Supplier Integration in Retail

Retailers need to integrate supplier data much more often each year.  The study confirms that the retailers using PIM were considerably faster (7 through 14 days) in comparison to 21 through 28 days.

www.pimroi.com

Customer Visit at Kramp:E-Commerce Strategy is exemplary

Tines, hand tools and hydraulic motors are the order of the day at Kramp. Spare parts for agricultural machines – that doesn’t sound very innovative... But Kramp, based in Holland, is Europe’s largest wholesaler of accessories and spare parts for motorized equipment, agricultural and construction machines.

Meeting Eddie Perdok, CEO at Kramp was inspiring on a personal level. But also the company’s business model and e-commerce strategy is exemplary. 340 million Euro in sales and 10,000 orders per day will raise strongly, this is for sure. Kramp is one of the hidden champions in my eyes.

„We believe in the future and the power of e-commerce”, said CEO Eddie Perdok. Kramp stocks over 400,000 items from 2,000 suppliers. The company wants to extend the deliverable virtual stock to 1 million items and is using the long tail strategy to implement this.

“We want to bring customer opinion and supplier knowledge together” (Quote: Eddie Perdok). Online customer evaluation combined with the knowledge of the manufacturer puts us in the position of being able to optimally control stock. In e-commerce, manufacturers, retailers and customers are getting closer in the product information supply chain. Kramp follows the idea of efficient consumer response driven by the search for perfect product data as the prerequisite.

The principle of cooperation and collaboration will also determine future business in the aftermarket. Potential exists wherever complementary products are sold online. Kramp uses the IBM WebSphere Commerce as its e-commerce system.

Perfect product information, based on supplier knowledge and customer feedback, has deep impact on their business model and the multichannel sales strategy.

Customer decisions in eCommercerequire perfect data

On the internet, the data is the product. Unlike in reality, where the customer can touch and examine products in order to compare them, in the online virtual world he must depend 100% on the product data (including images or videos). The basis of his decision is the product data available. No data - no comparison - no decision. No purchase. End of story. One more visit that adds to the unhappy balance of 97% non-purchasers. Preparing the data correctly and presenting it in the right structure is, then, a foundation for high conversion rates.

The ROI of good product information is probably much higher in reality than if we “just” take into account the savings made on the processing and handling of investment data. In online shops product data plays an important
role in the purchase decision – and the positive result of this decision is ultimately one which we can measure as
conversion rates. No figure correlates higher with the marginal income of an online shop – not to mention the
satisfaction of eliciting the simplest of decisions from the customer.

Learn more in chapter 5 of the best of breed whitepaper series PIM 360. I would especially like to thank Mr. André Morys, CEO of Web Arts.

PIM Trends 2011: E-commerce & multi-channel strategies are the drivers of product quality in commerce

The search for the right strategy for multi-channel commerce is the strongest driver of data quality in commerce. As a leading supplier of master data management (MDM) and multi-channel solutions, therefore we have put together seven important trends that will characterize product data management for the multi-channel environment for 2011.

1. Greater collaboration in the information supply chain:
Precise descriptions help sell products. In commerce, the collecting and organizing of product details is therefore of great importance. Manufacturers are in possession of the best data. The challenge is to retrieve their data in the best possible, and most importantly, simple manner. To ensure the most efficient operation possible, the motto has to be "100 % supplier self-service". Using a supplier portal, suppliers can perform this step simply and directly, and in addition they will also gain a better insight into the sales channels of their products through commerce.

2. Conversion rate and return rate as key factors:
Merchants who wish to avoid high return rates because of product descriptions in their catalog and/or their eCommerce site that are not matching the supplied items, must improve data quality first and foremost. Conversion rates also determines success in eCommerce. On the Internet, the displayed data represents the product. Customers have to rely on the provided text, images and videos when making their purchasing decision. The importance of product data in eCommerce is illustrated by the Heiler study of the topic available at heiler.com/research.

3. PIM enables Faceted Search:
Browsing by property, characteristic or value – these are the filter criteria, which influence todays eCommerce sites’ navigation. The theme of the faceted search is not new, but has recently established itself as an important factor for fast and successful search. But only perfect product data with all attributes make the "faceted search" function properly and the eCommerce world go round.



4. Quality needs rules:
Ensuring data quality is easier said than done. Besides care and intensive maintenance, there is a need for rules. It is in its Data Governance that an organization defines guidelines as to how and by whom product master data is to be handled. Lawgivers are also making increasing demands regarding compliance in several industries.

5. New jobs and processes in commerce:
In their search for the right multi-channel strategy, companies are increasingly considering the creation of a new job, that of the "Multi-Channel Manager". Universities, such as the University of Applied Science, Wedel in Hamburg, are even creating dedicated courses. On the one hand, the Multi-Channel Manager has to stand back from the channels in order to organize the data in a neutral manner, but on the other hand he or she must think along channel-specific lines, because data preparation and maintenance take place increasingly within the context of the marketing and distribution channel, as well as of the medium. It is precisely from these channels that the Multi-Channel Manager will create a central set and view of all data.

6. Multi-shop management:
Internationalization and a stronger focus on individual target groups, this is the dichotomy that major distributors want to bridge. The right eCommerce strategy will therefore involve the creation of individual brands and eCommerce sites to suit the different countries and target groups combined with maintenance of a central platform that can supply all the international shop systems.

7. Customer feedback acting as a correcting variable for product range management:
Bringing customer opinions and supplier knowledge together and combining customer evaluation from the Internet with the manufacturers' knowledge will enable merchants to control their product ranges to the best effect. The idea of user generated content turns to user generated products and assortments.

To summarize, the following will apply for 2011 and beyond: Manufacturers, merchants and customers will come even closer together in eCommerce. The concept of "efficient customer response" is becoming a reality, driven by the search for perfect product data as the basis of multi-channel commerce.

E-Procurement Trends 2011 Procurement Learning from B2C Trade

Procurement is becoming more and more of a value driver in international companies. Heiler Software, a leading provider of catalog management and e-procurement solutions, has compiled five trends that will be shaping electronic procurement starting in 2011. It is apparent that paradigms in the B2C business are increasingly influencing company’s procurement processes.

 

 1. More Transparency

Purchasing managers need maximal transparency when it comes to supplier prices, employees' ordering habits and the composition of suppliers' product lines. Modern dashboard technologies are now making comprehensive drill down analysis and global spend maps possible. This allows purchasing managers to optimally prepare for negotiations with suppliers. Catalog comparisons, product line analysis, price simulations and other analysis bring more transparency into the entire sphere of procuring indirect goods and services.

2. Index Search and Cost Reduction for Content Management
An index search of all internal and external catalogs helps reduce content management costs and furthermore, allows for better search results. Each supplier is integrated initially and then regularly delivers a search index, just like with a price search engine on the Internet. An index search is also capable of searching through all associated catalogs, both internal and external. This allows for a reliable search performance and standard user interface. The external products can be placed directly into the shopping cart if desired. "Rogue prices" can be identified by comparing prices with products that have already been ordered. Alternative products from other providers can also be found and compared.

3. Social Commerce Model
The internal product search engine in e-procurement is now on par with the methods known from B2C eCommerce. Each employee contributes his own private search expectations to the company’s internal procurement process: Facet searches, features and product suggestions are becoming increasingly important. Product evaluations in procurement are also becoming more significant: In this sense, colleagues giving help & recommendations become virtual friends.

4. Taking a Differentiated Look at Service Procurement
When it comes to procuring services through e-catalogs, different catalogs and their respective features will need to be taken into consideration. Standardized services, such as consultancy contracts or internal services, are already a reality. Complex products must be portrayed using forms with different variants and to also allow comprehensive price calculations or interaction with third party systems.

Services based on standardized service directories will be on the rise in electronic procurement in the coming years. Collaborating with suppliers will become even more important. Service orders can be inquired and reviewed and clarified by suppliers prior to contracting. The concrete contents and details can then be reported back to the purchaser after execution.

5. Flexible Use of the Internal Product Search
The idea of a single, central search engine for use in purchasing is in development. It must be integrated in portals in the same manner as with the SRM and ERP systems. It also provides the basis for the search for masters files. At the same time, the catalog seamlessly integrates into the respective third party system. A modern catalog system also offers all necessary interfaces, so that the above named systems can directly access price information in automatic order runs (i.e. article prices for MRP runs, update sources, EKI etc.).

 In summary, more and more elements from B2C trade and social commerce are finding their way into electronic procurement. As this happens, transparency and analysis are also becoming more important. Watch my talks about the most important factors for successful catalog procurement on Heiler TV (http://tv.heiler.com). 

"e" leaves "Commerce"

We carried out an online seminar in the USA on "eCommerce meets PIM" together with Bryan Walker (principal analyst at Forrester Research). We had a far bigger response to our invitation than we planned, with over 600 registrations.


Multi Channel Reality

Bryan used his presentation to clarify the meaning of product content in all modern sales channels. Multi channel has long been a reality since its implementation. More than 70% of US consumers research first online before they – however they do it – buy products. 85% of US consumers use multiple channels. They purchase in stores but also, at the same time, over the Internet, by phone and more and more with mobile equipment such as iPhones and now even iPads.


Direct sales are changing the distribution channels

Another figure shows how important it is for manufacturers to be have direct customer contact via the Internet: 46% of all consumers already research directly on manufacturers' Internet sites. In addition, more and more manufacturers are opening stores on the Internet. Production and retail are increasingly growing together. Or, put less positively: more and more retailers are facing direct competition from manufacturers. This represents a definite danger for retailers stretching far beyond the question discussed up until now of what influence Internet shopping has on the prices for specialist retailers with stores. Such questions are rather irrelevant to consumers. They click on the "checkout" which they completely trust and where they can get a good price. Trust is based on security. And security has lots of aspects on the Internet.


Limited investment in product content

Some of the questions that web providers have to answer for consumers online today, before they order a product, concern the product content. Perfect product descriptions; detailed pictures and videos; as well as tests, reviews and ratings strongly influence people's decision to buy products. However, in relation to the relatively high investment in online stores and customer portals, very little is invested in content management.  Distributors spend less than 3% of their costs on product information management. It's no wonder that many stores with products that don't display commodities (such as cellphones, digital cameras etc.) are not successful. The customer gets an unsatisfactory idea of the product and is not prepared to go ahead with the purchase.


Multi channel PIM strategy

The Forrester analyst leaves no doubt that retailers need to draw a clear picture of their customers' behavior. Today, a retailer needs to know where their customers go on the Internet; where they get their information; what motivates them to purchase something; and why they have decided on a specific channel. But manufacturers must also understand that the product content they generate will be automatically replicated on the Internet and reappear in all channels without them being able to control this flow of information. They can, however, control the quality of their product information, creating a USP amongst their competitors. Bryan Walker recommends that retailers and manufacturers "develop their own product information strategies because your customers expect this from you."

When choosing the suitable PIM solution, he recommends that they look closely at the technology providers. I can only agree with him on this. The differences are quick to see when it comes to complex processes and large amounts of data. One more thing can be said: multi channel almost always puts you in control of complexity. Which is why the old IT themes of user friendliness, stability and performance still play a dominant role.


"e"

Following Bryan Walker's presentation, one can remove the "e" from the term "eCommerce". Commerce without the "e" no longer exists in the real world. I agree with his view that: "commerce meets PIM" and have forgotten the "e" already.