Is your organization feeling the pressure to embrace digital expansion? If so, you’re not alone. A recent survey of Pivotree customers reveals that 78% of respondents consider Digital Channel Expansion to be their primary growth strategy for the next 3 to 5 years.
The challenge is that as your channels expand, the amount and complexity of your data will also grow. Therefore, before embarking on this journey, you’ll need to take a hard look at perhaps the most important success factor: Your data foundation.
Why is data so important for channel expansion?
Many B2C companies are looking to expand their digital presence by adopting an endless aisle strategy, selling via online marketplaces like Amazon and Alibaba, or launching an e-commerce presence in new geographies.
I’ve also observed the significant push for B2B digital expansion. For B2B manufacturers, the number of distributors requesting information in a structured way has doubled, as has the frequency of those requests.
The challenge is that with more channels and greater product assortment comes the potential for deeper data quality issues – and the cost of poor data can be staggering. According to the Harvard Business Review, bad data costs the U.S. $3 trillion per year.
When faced with inconsistent data, customers are quickly overwhelmed and find the online experience confusing and dissatisfying. Poor data quality can also lead to increased product returns, eroding consumer trust, plummeting conversation rates, and even potential lawsuits.
In this post, I’ll discuss how you can successfully expand your digital channels with a Three-Step Roadmap centered around a strong, scalable data management strategy.
Step #1: Establish Five Data Management “Must-Haves”
As your digital channels grow, be prepared for the volume, velocity, and variety of data to rapidly increase. Without the following data management must-haves, you could soon find yourself in a massive data mess.
- Data Governance: Establishing data governance involves deciding what rules, or standards, you’d like for your data to follow. The adage of “start as you mean to go” applies here. It’s much easier to establish data rules at the front-end than it is to clean up your data later on. Data governance also involves deciding how you will enforce these standards. In our survey, 50% of respondents indicated that people within the organization do not clearly understand their roles in data governance policy. It’s important to embrace data governance as an organizational effort, not just a technology approach; that means involving the appropriate training along the way.
- Data Quality: When working with millions of SKUs or multiple channels, data quality will inevitably suffer without centralized data management. Data quality standards are designed to ensure that the data complies with your governance rules, that it’s consistent across channels and products, and that you can achieve the level of completeness that you want. This is accomplished through rules to match and merge data, remove duplications, harmonize data, and establish parameters around survivorship in your data repository.
- Content Enrichment: An impactful omnichannel experience relies not only on consistent content but enriched content. Detailed product descriptions and digital assets – like photos and videos – are crucial to converting browsers into buyers. The ability to link products and digital assets to specific SKUs also helps merchants make product recommendations, upsell, cross-sell, and personalize the online experience.
- Vendor Collaboration: Producing rich, detailed product information and assets can be a burden for many companies. Turning to your vendors to help procure this content can be a game-changer. There’s an added benefit as well: Discussing rich content and merchandising with vendors opens up a whole new layer of relationship by demonstrating interest in getting their products to market.
- Automation: Finally, process automation is a crucial consideration in data management. Automation makes your business more precise and agile, helping you eliminate manual and error-prone tasks. The result is that you can bring products to market (syndicated to your website and other channels) faster than ever before.
Step #2: Find the Right Data Management Tool
When it comes to digital channel expansion, having a product information management (PIM) solution in place is crucial. In fact, according to Forrester, 69% of online buyers rely on e-commerce features that are enabled by PIM.
PIM tools can bring years’ worth of disparate data into a single repository – with appropriate controls in place to make your data clean, consistent, and complete.
With that said, not all tools are created equal, and there isn’t a one-size-fits-all solution. There is an important distinction between a marketing-level PIM tool and an Enterprise Product Master Data Management (MDM) platform.
What’s the difference?
More mature companies are looking toward Product MDM to roll out at an enterprise level. Enterprise Product MDM advantages include creating workflows for maintaining and curating product content, as well as sharing (or syndicating) trusted data across all external channels and internal business functions. An Enterprise MDM platform can also offer extensive data governance and data quality capabilities, tools that help data stewards enforce standards, vendor portals, and other plug-ins that extend the capabilities of the solution.
The allure of marketing-level PIM tools is that they can often solve an immediate problem – e.g., the need to add a sales channel or enrich product listings with digital assets – with a lower initial investment of time and money.
How do you choose?
Companies can do a quick self-assessment to see what kind of solution they need. At a bare minimum, your tool should:
- Meet your core PIM requirements
- Allow for the integrations you need
- Support collaboration with vendors, and
- Grow with your business needs
It’s that last point that tends to get people in a sticky situation. You can be certain that your company will evolve, and your needs will change. What often happens is that it’s easy to focus on the immediate problem at hand, and then get locked into a tool that can’t scale.
We would encourage you to avoid a narrow focus. Aim for the maturity path to enterprise MDM.
Ready for some good news? There is a middle ground. There are Enterprise Product MDM solutions that can be implemented at a smaller scale now, while still allowing for total flexibility to grow in the future – especially with the right help along the way.
Step #3: Start Smart
Let’s wrap up this roadmap with our suggestions for starting smart:
- Get Internal Buy-In: Ask questions across business functions to identify all the problems that can be solved by PIM – the breadth of use cases may surprise you! Involve key stakeholders that will help you sell it across your organization.
- Aim to Build a Proactive – Not Reactive – Channel Strategy: Establish processes and governance built around a proactive approach. For example, manufacturers should be pushing files after every significant product data update, especially if the data applies to regulatory, compliance, or presents legal liability.
- Keep It Simple: We see too many projects failing due to (unnecessary) complexity. Take the time in the beginning to organize your data, establish your standards, and take a simplified With the right tool and implementation experts, you can start small and still have the peace of mind that you can grow it over time.
Finally, our advice is to avoid doing it alone. An external perspective can completely transform the execution of your growth strategies – especially one that’s based on lessons learned from a variety of implementations. The right partner can help you choose a platform that is flexible and aligns with your current needs and future growth plans, while also ensuring that you approach your MDM as a business function, and not just another piece of your technology stack.
Pivotree implementation experts can help you do just that. Let’s talk about your digital channel expansion goals! Click here to contact us to get started.
Check out Pivotree’s ‘The State of Digital Transformation’ report.
Digital transformation is no longer just a buzzword. It’s a necessary disruption that nearly every business must embrace. Unfortunately, there is no one-size-fits-all playbook – so, where do you start?
We decided to go straight to the source. We surveyed our B2B and B2C customers to ask what their digital transformation plans look like for the next three to five years, as well as the challenges that stand in their way. The results paint a picture of significant opportunity, as well as potential gaps, that every company must address.
This White Paper Report combines our research findings with insights into what transformation truly entails – plus, guidance from our data and digital mavens to ensure your company is on the right course.
To download the report, click here.