The challenges and opportunities of Product Information Management
Explanation: The year of the Corona revealed Achilles’ heel in Finnish companies – The current quality of product information does not succeed in international competition.
Although product information is considered a critical factor in a customer’s purchasing decision, companies are not satisfied with its management, a survey of product information professionals reveals
The Corona year 2020 made Finnish companies wake up to the potential of digital platforms and e-commerce. A survey commissioned by Canter says companies expect the share of sales through digital channels to almost double within the next two years.
As digital commerce becomes more important, the importance of product information also increases. Product information refers to all product-related information that is used to serve the customer at different stages of the purchasing path and customer relationship. 76% of the companies that responded to the survey considered product information to be a major or very large factor in the customer’s purchasing decision.
Although product information was considered a critical success factor, respondents had poor control over its management. Only 11 percent of respondents felt very satisfied with their company’s current product information management. As many as 33 percent estimate they have lost sales due to incorrect or incomplete product information.
“This year, the eyes of more and more Finnish companies have opened up to the importance of digital commerce and thus the importance of product information. On the B2B side in particular, the conformity of the product and its suitability for the intended use are emphasized. The simple truth is that a customer doesn’t buy if they don’t know,” says Patrik Palatz, CEO of Canter, a provider of centralized product information management solutions.
Information is scattered in ERPs and Excel, although centralized product information management would help
According to Finnish companies, the most significant problems in managing product information are the fragmentation of information in different systems and the lack of uniform operating models.
“Indeed, many product information management professionals who responded to the survey described a situation where product information is fragmented into many parallel systems and behind several different people. Transporting product information living in ERPs, excels or colleagues’ hats to sales channels and materials puts a painful amount of manual work in companies,” says Palatz of the survey.
It is possible to automate product information management with Product Information Management, or PIM systems. PIM solutions facilitate centralized management of commercial product information as the information can be updated to different sales channels from a single location.
The results of a study commissioned by Canter provide a strong signal of the benefits of centralized commercial product information management. More than 70 percent of companies using a centralized PIM solution said they were fairly or very satisfied with their company’s product information management, and 44 percent said they were satisfied with the quality of their product information. In contrast, nearly 70 percent of companies operating without a PIM solution were dissatisfied with their company’s product information management, and only 20 percent were satisfied with the quality of the product information.
“Companies focusing on product information management highlighted clear business benefits. The speed, ease, and automation of product information management allows for a better focus on areas that are important to online sales and marketing, such as content-rich content. In companies where commercial product information management is not centralized, the emphasis is still often on basic issues such as ensuring the accuracy of product information and an adequate level of quality, ”says Palatz.
Amazon is interesting, but getting there requires enrichment
The survey also examined the attitudes of Finnish companies towards Amazon, Google Shopping or various sectoral marketplaces. These were considered interesting by more than a third, or 35%, of respondents.
The expansion of trade to platforms such as Amazon further emphasizes the importance of product information and its centralized management: for example, product descriptions require market-specificity and several different language and unit versions. Product content is also a way to differentiate yourself from your competitors.
“Domestic companies selling consumer products in particular see Amazon, Google Shopping and other marketplaces as important ways to reach a more global customer base,” Palatz interprets the survey responses.
Centralized product information management solutions also help enrich product information, such as linking videos, user stories, guides, or product links to basic information. 87% of the respondents estimate that enriched product information is an important differentiating factor in digital channels.
“The power of recommendation in an online store is huge. If a company is able to enrich its product information with, for example, tip videos, reviews from other users, or inspiring use examples, it will gain an advantage over its competitors. Communication related to responsibility and ethical values is also becoming increasingly important, ”says Palatz.
The study carried out by Canter in November 2020 was the first study to extensively examine the state of product information management in Finland. The electronic survey and qualitative telephone interviews were attended by experts and decision-makers working in the commercial product information management of more than 100 different companies. The study was carried out on behalf of Canter by research agency Vastakaiku Oy.
Patrik Palatz, President and CEO, Canter OY
Phone number +358 40 774 1200