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With growing consumer demand for more access to trusted, reliable information around their choices, mass retailers and “e-tailers” are using innovative technologies, such as digitization, connected objects and mobile apps, to meet their customers’ needs.
According to an IDC report published in 2017, the production of data will increase tenfold by 2025. Gathering data from multiple sources and sending relevant information to the right people is becoming a headache for manufacturers. They need to send this data in increasingly short deadlines, with near real-time becoming the norm in e-commerce. Added to that, the World Economic Forum, states that online sales will grow from around 10% today to 40% in 2027!
In order to share consistent information across the enterprise, product data needs to be dynamic, merged, centralized and up to date. If not done properly the sharing of information is very inefficient, unreliable, and prone to errors and mis-interpretation.
Why is product content management such a critical initiative for Consumer Goods Companies today?
This can be illustrated with cases that happened with a major global company in November 2017 in the UK.
Newly introduced brands suffered from bad eCommerce launches due to inaccurate new product listings, with information missing such as ingredients and shortened names. Consequently, it was difficult for digital shoppers to find these products online resulting in loss of sales and money wasted by the manufacturers.
Research conducted with major British retailers found that 63% of products had errors in their listings and that 71% of these new products fell outside of the top 100 search results on key product search terms, or worse, did not feature in the search results at all.
It is important to consider the paradigm shift over the last few years which shows that shoppers are taking their time to read ingredient labels. They want to know exactly what’s in the products they buy, how it was processed and even from where it was sourced to make better purchasing decisions. This is extremely important as it is a way to drive greater shopper loyalty. Research shows that 96% consumers will simply abandon their purchase if they can’t find the information they need for evaluation.
In the last 2 years, many startups have developed apps for consumers enabling them to scan the products and provide and check ratings. Some of those apps are collaborative such as Open Food Facts which relies on consumers to enrich the database. If shoppers do not regularly update the information on products or if a company does not proactively connect to this platform to send the updated product information, then, there is a great probability that product information will be outdated and mis-leading. Importantly it may not show new products in a good light, or miss value add information like recipes or worse, the notification of allergens.
Therefore, to regain consumers trust, CPG companies should urgently take back ownership of their product data that they need to disclose to their end-consumers!
What are the challenges faced by a CPG company regarding its product information management?
Today, more consumers are digital shoppers and retailers use an omnichannel strategy to better serve them. However, it is becoming more and more complex for a CPG company to distribute product content in a consistent manner to all the channels at the same time.
Retailers are requesting more rapid access to information. Often new product content is required in a maximum of 48 hours. And they require more content as well: digital content, such as different views and videos of the products are now the basic information requested to enrich the product information delivered to the digital shopper. CPG companies need to address this challenge if they want to remain visible and competitive in their market.
Moreover, the number of attributes for a single product has grown in the last 5 years from 50 to more than 500 leading to hundreds of relationships and millions of records to manage.
Internally, companies also need to manage multiple sources of product data used by several services and stakeholders (production, quality, marketing, sales, …) that need to be synchronized from time to time dedicating numerous teams to take care of these operations. In parallel, companies need to send this product information to multiple users from retailers, market places, ecommerce platforms, startups, …. making it critical for them to be able to manage these operations in a fast and consistent manner.
In conclusion, handling critical information by spreadsheet and through multiple sources of systems within the CPG companies is problematic and even ERP systems are not optimized to support product information lifecycles. But as consumers rely on product data as a source of truth, to be successful, companies need to ensure accuracy of information to succeed in today’s omnichannel reality.
The positive news is that there are new disruptive solutions to better manage the information related to products, such as PIM (Product Information Management) and DAM (Digital Asset Management) enabling CPG companies to better answer the challenges of today’s environment.
To know more about the solution to answer those challenges, check the Part II of this Post or contact us.
