Data: The centrepiece of every PIM system
Product Information MANAGEMENT
Retail has long since shifted from a purely offline environment to a digital realm. And online business is expanding more and more. Data plays a very important role here, because digitalisation only works with data. What machines once were for industrialisation, data is now for digitalisation. Anyone who is able to utilise their digital data effectively today will be and remain successful online. Unfortunately, data is still neglected in many companies. Many see data only as objects of knowledge that have to be entered somewhere. But data is much more. They are a resource and serve very specific goals. In this article, we shed light on the importance of data and why every PIM project fails without digital data.
Facebook and Google are the best examples of this when it comes to the importance of data. After all, the two tech giants make money with data. To do this, they collect and process the collected data and then sell it on at a high price. No money without data. However, this applies not only to these two companies, but to all companies, especially in the e-commerce sector. Because without data, no turnover can be generated in digital business. After all, online shoppers don’t have real goods, they have data and this data represents the products. Some better, some worse. But data is not only used for sales. Data is used to create information, which in turn creates knowledge, and this knowledge can be used for targeted marketing. One thing is certain: Data helps to proactively shape and manage online competition.
Data in E-Commerce: Not just a Customer Activator
Data are electronically recorded characters and information. They are transmitted via a network, such as the Internet, middleware and software applications, and are a component of many computer applications. Nowadays, data is also the basis for machine learning and artificial intelligence. In e-commerce in particular, data forms the basis for communication with consumers. But they offer even more:
- Sales: If no digital data is available, products cannot be sold in e-commerce. The data represents the products in the form of text and visual content, whether in the online shop or on marketplaces. Based on the data, the customer gets an idea of the product and decides for or against a purchase.
- Customer understanding: Data provides deep insights into the behaviour and preferences of customers. By analysing usage data, purchase histories and interaction patterns, companies can define their target groups more precisely and understand what they really want.
- Personalisation: With the help of data, e-commerce companies can personalise their offers, from individually tailored product recommendations to customised marketing messages. This personalisation not only increases customer satisfaction, but also conversion rates and customer loyalty.
- Product development: Data-based insights help companies to recognise trends, identify new needs and adapt or develop their products or services accordingly. This leads to more innovative solutions and a competitive advantage in the market.
- Optimisation of marketing and advertising: By analysing data, marketing strategies can be optimised to maximise the effectiveness of campaigns. Companies can find out which channels work best, where they should allocate their budgets and how they can design their messages for maximum resonance.
- Risk management: Data also helps to better assess and manage risks. By analysing customer behaviour, market conditions and internal performance data, companies can identify potential problems at an early stage and take preventative measures.
- Decision-making: In an environment characterised by speed and efficiency, data-driven decisions enable companies to act quickly and with greater certainty. This ranges from strategic decisions to day-to-day operational decisions.
- Customer interaction and service: Data makes it possible to improve customer interaction by providing insights into customer needs and making it possible to organise support and services more efficiently.
As you can see, digital data is indispensable. So let’s take a look at the features that make up good product data in order to lay the first foundation stone for success in e-commerce.
Data: What characterises good Product Data?
Product data plays a central role in e-commerce, as it forms the basis for the customer experience and decision-making. They include all the information that describes a product and are crucial for the presentation of items in online shops or marketplaces. The quality and structure of this data can make the difference between success and failure in digital commerce. But good product data is not only relevant for the customer, well-maintained product data also makes sense from a business perspective.
Success-critical product data from the customer’s perspective:
- Product descriptions: Detailed and precise product descriptions help customers to understand the features and benefits of a product. They promote trust and the willingness to buy by answering questions before they are asked.
- Images and videos: Visual information in the form of high-quality images and videos convey a realistic impression of the product and can significantly increase its appeal. They allow customers to view the product from different perspectives and recognise important details.
- Technical specifications: Technical details such as size, weight, material and functionality are crucial in assessing the suitability of a product for the customer’s needs. Precise information reduces the likelihood of returns due to unfulfilled expectations.
- Price information: Clear and transparent price information is essential. In addition to the basic price, they should also contain information on taxes, possible discounts and shipping costs in order to provide the customer with complete cost transparency.
- Availability and delivery information: Up-to-date data on product availability and estimated delivery times are essential for a positive customer experience. They help to avoid customer frustration and set realistic expectations.
- Ratings and reviews: Customer ratings and reviews are valuable product data that can increase trust in a product and positively influence purchasing decisions. They offer authentic insights into the experiences of other customers.
- Cross-selling and upselling: By linking relevant product data, customers are suggested complementary products or higher-quality alternatives. This promotes customer loyalty, as the customer perceives the seller’s offer as very diverse.
The result of good product data from the company’s perspective:
- Search engine optimisation (SEO): Well-structured and keyword-optimised product data improves visibility in search engines and thus leads to higher traffic and improved sales opportunities.
- Product texts: Structured product data can be used to generate appealing and more precise product texts that better activate customers to buy and are unique. They also form the basis for generating automated product descriptions, whether for pure text creation, for translations or for adapting existing content to other channels.
- Cross-selling and upselling: By linking relevant product data, online retailers can develop effective cross-selling and upselling strategies by suggesting complementary products or higher-value alternatives to customers.
- Return rate: Good product data helps to ensure that the perception of a product corresponds better to the real circumstances. This means that returns can be significantly reduced.
- Reporting: Maintained product data enables well-founded analyses and reports, allowing decisions to be based on facts rather than intuition.
Quite a load on the shoulders of the product data. It is therefore all the more important to finally give product data the importance it deserves, because the key to e-commerce success is often found in an unexpected place: In the product data. Now the question arises of how to compile product data effectively. We have an answer here too. Let’s first look at the sources in which the product data lies dormant before we turn our attention to its preparation.
Where does the product data come from and where is it maintained?
Product data can come from many different sources. This also has to do with which systems a company uses and where which data is stored, regardless of whether the data is generated in-house or provided by suppliers.
- Master data: This includes, for example, accounting or logistical data such as article number, article name, prices and availability. They are usually stored in merchandise management or ERP systems.
- Technical information: Depending on which products are offered, the technical information may contain details of sizes, lengths, shapes, colours etc. These are also usually stored in merchandise management or ERP systems, but can also exist in Excel files or originate from supplier emails.
- Promotional texts: This is all product data that is prepared for the customer in text form in order to induce a purchase through emotionalisation. These advertising texts are either written in Excel files, maintained directly in the shop system or in PIM systems.
- Visual content: This refers to images, videos or other documents that give the customer as realistic an idea as possible of the product on offer and are indispensable in online business. Assets can be managed in email inboxes, in file sharing programmes (e.g. OneDrive, Dropbox, SharePoint etc.), in content delivery networks (CDN) or in DAM systems.
Special position: Reviews
The product data listed above is the data over which a company has direct influence. However, there is also product data such as reviews. Although the company has no direct influence on this, it can use the customer reviews for its own optimisation purposes and benefit from them.
We now know what we need and where we can find the data. Then you’re ready to go. Or not?
Challenges in product data management
What are the main characteristics of product data? Right: up-to-date, informative and activating. Why do many e-commerce companies complain about the poor quality of product data? There are three main reasons for this, the last of which is the decisive one. The system already exists, but it must actually be implemented.
1. Many different systems and players
If many different systems and players are involved in product data maintenance, and this is usually the case for many e-commerce companies, then the preparation of product data can become a challenge. Questions like:
- Where is the data stored?
- Who takes care of what?
- Is the existing data even correct?
- Which data may I use and which not?
- How do I detect errors in the data and how do I correct them?
The list could go on and on. But we’ll leave it at that. To avoid these problems, it is always advisable to use a centralised system. This is the only way to avoid ambiguities, overlaps, ambiguities or duplication of work. In this context, a centralised system actually creates efficient processes for maintaining product data. But not just any system. It has to be a PIM system. A PIM system has been specially developed for this purpose and is therefore the only correct system. I’ll be happy to tell you why.
2. Non-specialised systems
A centralised source for managing product data is mandatory. The product data must be well structured and media-neutral. Only a PIM system can achieve this. No inventory management system, no ERP, no shop system and definitely not an Excel file.
No, please do not maintain the product data in an inventory management system
Unfortunately, an inventory management system is not designed for product data. Of course you can manage the basic in it, but that’s about it. What is worse is that there are no approval processes. This means that anyone can change something at any time without the change being subject to review. The question of “Is the data even correct?” can then not be answered. The situation is different in a PIM system. Release processes avoid precisely this problem. So it’s better to steer clear of an inventory management system and switch to a PIM system instead.
No, please no ERP system for product data management either
In contrast to an inventory management system, human resources are also managed in an ERP system. Irrespective of this, inventory information is the top priority. But product data is about more, about enriched data in product taxonomies. And for all sales channels. An ERP system cannot fulfil this requirement. Therefore, please use a PIM system instead of ERP. This is because only a PIM system is able to set the product data in relationships and display it for different channels according to specific requirements.
No, not in the shop system either, even if it appears to be correct at first glance
Another option, and also a popular alternative, is to maintain the product data directly in the online store. But that is not an option either. The direct management of product data in the shop system actually leads to a double effort in data maintenance. Changes to products would mean that the product data would first have to be updated in the shop system and then in the merchandise management or ERP system. Why waste time duplicating work when you can centralise it in a PIM system? The PIM system not only displays the current data in the shop, but also in all connected channels. Product data maintenance in the shop system simply doesn’t make sense, especially if you have different output channels.
No, never manage the product data in Excel
Yes, Excel is everyone’s favourite. It’s like a Swiss army knife. But you can’t use it to chop down a tree to build a ship and explore the world’s oceans. In short: Excel is never up-to-date, never error-free and never secure. Even if you upload and share Excel files in Microsoft Teams. Although you can work on it in parallel, there are no clear guidelines and approvals for the content you have entered. Not to mention that the Excel file has to be imported into the respective output systems after completion in order to provide the data. Why so cumbersome and rudimentary when a PIM system sets the right course from the outset and is directly connected to the channels? In addition, there is no crash like in Excel with a PIM system. There is simply no such thing as data loss.
3. No data capture in the PIM system
You have recognised the importance of a PIM system. You have also decided in favour of a PIM system and introduced one. But there is no ROI? The project appears to have failed. Do you know what the main problem is here? Not the PIM system. It lies in the lack of understanding of digital data. This simply bypasses the PIM system. The data is simply not recorded in it. Of course, the master data comes from the connected systems, but it also needs the other product data. And these have to be recorded manually at one point or another. This is no different with a CRM system. Without data, any system is worthless, even a PIM system. So take a close look at how product data maintenance works. Does everyone use the PIM system or are Excel spreadsheets still sent back and forth in emails? If the latter is the case, then unfortunately the ROI of the PIM will not be realised. Raise awareness of the importance of digital data and that it can only be available digitally if it is stored in a PIM system. In Excel they are also digital, but inflexible. Example: You buy a new brand and create another online store for it. You will receive Excel spreadsheets and emails with image files. The launch will be delayed. If, on the other hand, the data were already in a PIM, then a launch is possible directly after the online shop has been designed. This is because the digital data is available just as you need it: ready for immediate use.
Closing words
Digital data is indispensable. They are easy to read and understand. This makes them ideal for automated use in other systems. Before you introduce a PIM system, first create an understanding of digital data. This is the only way to ensure that all the required data is actually recorded in the PIM system and that your PIM project generates a quick ROI. And if product data is incomplete, a PIM system supports you with quality analyses. In our PIM system, the quality analysis is called the “maturity model”. It checks the product data for completeness and accuracy. Our PIM system only places the product data in the channels once these criteria have been met, i.e. the product data is ready. Our PIM – OMN PIM – is a simple way of ensuring that our customers’ sales channels are populated with up-to-date, informative and activating product data. A PIM system that pays off. See our OMN PIM for yourself. Completely non-binding and of course free of charge.
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