Robust impact to consumers' behavior from mobile in retail industry
Product Data Management - Meeting challenges
1. Executive Summary
The traditional methods of shopping are
rapidly evolving. Today’s consumers do not
buy their products the way their parents
did. In fact, these consumers don’t even shop
the way they themselves did just a few years
ago. Today’s interconnected world allows
consumers to adapt faster than organizations
by actively leveraging emerging online tools
like social media and mobile applications in
their shopping experience.
·· According to Forrester Research1,2
, the
share of mobile commerce sales in online
spending by U.S. consumers will increase
from about 3% to more than 8% from
2012 to 2017
·· A Euromonitor International4
study
shows global online retail increasing by
30% from $347B in 2010 to $453B in 2012
This behavior is evolving right before our
eyes and it is being reshaped by consumer
expectations of what, why, where, and how
to buy.
Consumers are transitioning their attention
from local convenience with limited choice to
data-driven decisions without geographical
and time-based boundaries. As part of this
trend, consumers expect accurate,
complete, and relevant product data –
anytime, anywhere – as an enabler in
enriching their shopping experience.
WHITE PAPE R
CONNECTING TRUSTED PRODUCT DATA EVERYWHERE 1
Product Data Management
Meeting Tomorrow’s Challenges…Today
This is causing a practical power shift from the
traditional manufacturer-customer landscape
to the new driver – today’s consumer.
As a result, conventional challenges long
existing in the B2B environment are being
further complicated with the addition of new
ones being presented by the emerging B2C
trends. In other words, the volume, velocity,
and complexity of the product data stream
are now influenced by consumer
expectations in the B2B2C world. A
comprehensive Product Data Management
(PDM) strategy within and across trading
partners centered on key focus areas can
play an important role in handling these
challenges and meeting consumer
expectations.Source: Forrester Research1,3
1. US Online Retail Forecast, 2012 to 2017, Forrester Research, March 2013
2. US Mobile Retail Forecast, 2012 to 2017, January 2013
3. European Online Retail Forecast, 2012 to 2017, Forrester Research, March 2013
4. Top 10 Consumer Trends for 2012, Euromonitor International, March 2012
Data Governance
& Data Quality
Standards
Change
Management
TechnologyProduct Data
Management
“To reach data-hungry
consumers in today’s data-
driven commerce, businesses
around the world must have
clear strategies and solution
partners to provide real-
time, authentic, and enriched
product data at the global
level.”
- NIHAT ARKAN
CEO, 1WorldSync
US Online Retail Forecast EU Online Retail Forecast
(Billions) (Billions)
$231
$370
2012 2017
+60% +71%
€ 112
€ 191
2012 2017
2. CONNECTING TRUSTED PRODUCT DATA EVERYWHERE 2
5. ZMOT Winning the Zero Moment Of Truth, Google, 2011
6. The Zero Moment of Truth Macro Study, Google/Shopper
Sciences, April 2011
7. How Digital Influences How We Shop Around the World,
Nielsen Global Survey, August 2012
8. McKinsey Quarterly report, August 2010
9. B2C Consumer Survey, GS1, March 2011
Emerging Trends
Recently, I decided to buy a new camera
for my upcoming vacation. I visited my
closest electronics retail store to check out
the available models. Looking at the
multitude of options and a broad price
range, I used my smartphone to look up
additional information online and found
better prices and user ratings. So I went
home and decided to extend my online
research to include product features,
shipping times, and explored photography
forums where users had some strong opinions
about certain brands. I also found that
some of my Facebook friends had recently
purchased a couple of models that I had
shortlisted and had some valuable feedback.
After collecting all this information, I chose
a model and placed my order from an
e-tailer that offered the best price along
with free shipping. Within the next couple of
days I received the camera at my doorstep.
Done. This serves as an example of how
product data is leveraged from multiple
sources to make an informed buying decision
in today’s connected world.
The term “First Moment of Truth” was
coined by P&G in 2005. This describes the
point when a consumer makes a decision
to buy or not to buy a product upon first
seeing it on the store shelf. The term “Zero
Moment of Truth” (ZMOT)5
was later coined
by Google to describe the recent situation
where there is an online influence on the
consumer’s decision before going to the
store.
·· According to a Google/Shopper
Sciences6
survey in 2011, 84% of US
consumers engage in ZMOT prior to
purchasing a product
·· In a 2012 global online survey of internet
users by Nielsen7
, 61% indicated using
the internet to conduct research for
grocery shopping while 49% purchased
a product online
CONSEQUENCE IN CONTEXT Based on
the Moore’s Law and as referenced in the
McKinsey Quarterly report published in
August 20108
, data is being generated at
extraordinary rates – doubling approximately
every 18 months. Thus today’s data will
potentially grow by a magnitude of more
than 100 times in the next decade
contributing to ‘Big Data’.
This could apply to product data as well.
However, it is important to ensure availability
of relevant and good quality data to provide
desired value to end users. A retailer may be
interested in obtaining the case pack informa-
tion while an individual consumer could find
the nutritional information very useful. In fact,
the consumer may only buy the product if rel-
evant information is available without having
to look at multiple sources. Understanding
that there is “consequence in context” while
making data available, is critical in enhancing
user experience.
DATA AGGREGATION The B2B channels
of data exchange such as the Global Data
Synchronization Network (GDSN) provide a
source of standardized and structured product
data from a trusted source. In this data
exchange, every touch point in the supply chain
has the potential to impact the quality of the data.
In the B2C space, there is a significant amount
of un-structured product data generated and
used by consumers sharing their experiences
via multiple forums through the conversion of
‘consumer sentiment to bytes’. These include
online reviews, surveys, and social media appli-
cations using smart phones contributing to the
‘SoLoMo’ – Social, Local, Mobile – phenomenon.
Organizations and consumers are increasingly
attempting to create and leverage both
structured and un-structured data in their
decision-making process.
69% of consumers
interested in receiving
nutritional information
for the foods they buy.
Source: B2C Consumer Survey, GS1, March 20119
DATA EXPLOSION
140
120
100
80
60
40
20
0
YEARS
VOLUME
1 2 3 4 5 6 7 8 9 10
3. Today, organizations struggle to maintain
a single version of truth for their product
data, given the use of multiple technologies
and systems for various business areas.
Another important area of consideration is
the need for business process optimization
in item setup and maintenance functions.
Combined, it impacts the overall product
data quality. It is critical to study these im-
pacts on tangible B2B metrics in logistics and
warehouse operations, while also considering
impacts on end consumers researching for
products in the B2C channels.
A sophisticated data governance program
can facilitate organizational alignment
around high level objectives, designate
ownership, and establish accountability.
This enables streamlining of business
process and technology functions and
maintaining a single version of truth to
ultimately improve data quality.
TECHNOLOGY The 2020 Future Value
Chain Report published by The Consumer
Goods Forum11
predicts that consumers’
technology adoption will have an enormous
impact on their own behavior and also on
their ability to influence the buying behav-
ior of other consumers. There is a growing
demand for product data driven by
consumers’ adoption of mobile applications
and social media. As a consequence,
organizations need to consider scaling their
product data management technologies
to handle this data explosion. Historically,
adoption of these technologies has focused
mainly on supply chain functions. Today,
this adoption is evolving beyond supply
chain in organizations where data is
considered a strategic asset as consumers
are making decisions based on available
product data. Organizations must be
prepared now to ensure not only the
accuracy and completeness of their data,
but also their ability to share it in real time.
The right technology infrastructure will
enable organizations to efficiently collect,
analyze, enrich, store, and syndicate their
product data. This includes implementing
CONNECTING TRUSTED PRODUCT DATA EVERYWHERE 3
6. The Zero Moment of Truth Macro Study , Google/Shopper Sciences, April 2011
10. Mobile-savvy shopper report, GS1 UK and Cranfield School
of Management, January 2011
11. 2020 Future Value Chain Report, The Consumer Goods Forum, 2011
12. In-store Mobile Commerce During the 2012 Holiday Shopping Season,
Pew Research Center, January 2013
However, in today’s B2B2C world, a single
trusted source of aggregated data is
needed to provide a comprehensive view
of information such as:
·· Product attributes
·· Digital assets
·· Product performance and ratings
·· Consumer preferences
PDM functions enable organizations to
achieve the aggregation, refinement, and
syndication of data for use by consumers
and trading partners in a collaborative
environment. In this effort, organizations
need to concentrate on certain focus areas
to enable the development of a sophisticated
PDM strategy and its efficient execution to
realize true benefits.
Focus Areas
DATA GOVERNANCE AND QUALITY
According to the Google/Shopper Sciences6
survey in 2011, the average shopper consults
10.4 sources prior to purchase, twice
as many as just a year ago. It is a clear
indication that product data from multiple
sources is influencing the consumer’s
decision-making process, underlining the
significance of data quality.
Source: 2012 Holiday Season, Pew Research, Jan 201312
GDSN
B2B
Brand
Owner
IAP/
E-Tailer
Social
Media
Recipient
Product Data Aggregation
B2B2C
Consumer
How accurate is your product data?
Source: Mobile-savvy shopper report, GS1 UK and
Cranfield School of Management10
58% of US cell phone
owners used their phones
inside a store for
purchasing decisions
% of Mobile Barcode Scans
91%
Incorrect
Product
Desc.
No Product
Data
No Image
75%
87%
4. CONNECTING TRUSTED PRODUCT DATA EVERYWHERE 4
standards-based data synchronization
solutions, data accuracy tools, vendor
portals, and product information management
systems. Retailers, for example, are
increasingly leveraging these solutions
towards developing and maintaining a
single item file or catalog in their back end
systems, improving data quality for end
consumers. Organizations should focus on
leveraging these technology implementations
to achieve improvements in areas such as:
·· Business process optimization
·· Utilization of control functionalities
·· Tracking KPIs for product data quality
To accommodate the requirements for
sharing accurate and complete product
data with consumers, organizations need to
evaluate their business processes, technologies,
and supporting data governance practices.
A good starting point is an internal assessment
of current capabilities and developing a
strategic roadmap accordingly.
STANDARDS Standardized product data
enables efficient and scalable exchange
of information between trading partners
throughout the supply chain.
For example, the GS1 Company Prefix,
Global Trade Item Number (GTIN), or
Global Location Number (GLN), allow
individual entities to be uniquely identified
on a global scale. Taxonomy schemes like
Global Product Classification (GPC) are
primarily used for classification of consumer
products globally. Recipients have started
mapping GPCs to internal product
categories for better routing of items to
product teams, saving time and effort
during item setup. Standards also ensure
accuracy and consistency in e-Commerce
transactions such as EDI and XML messaging
via GDSN.
GS1 Standards13
ultimately enable organizations
to improve and sustain data quality while
allowing them to communicate with their
trading partners using a common business
language. However, these standards continue
to evolve. So in addition to utilizing them, it
is beneficial for organizations to play an
13. GS1 Standards, www,gs1us.org/resources/standards
active role in their development itself.
Various GS1 forums including specific
workgroups enable exchange of ideas and
collaboration for industry specific standards
based on business requirements. Engagement
in these forums ensures your voice is heard
in developing the standards that you will
ultimately use.
Today’s product data management initiatives
must take into consideration the adoption
and usage of GS1 Standards into business
processes and technology while also
planning for active participation in their
development process.
CHANGE MANAGEMENT Handling the
complexities of challenges faced by today’s
product data management initiatives
requires horizontal and vertical organizational
alignment about the overall objectives and
success criteria. The current processes and
systems may need to be revamped, essentially
changing ‘the way things have been done’.
The implementation of the initiative can be
governed by undertaking a change
management program across the
organization. This program should aim
to address issues such as apprehension,
inertia, insufficient understanding, lack
of trust, and non-cooperation among
participants, to name a few, that may
put the initiative at risk.
Defining expectations clearly across all
levels of the organization is an important
first step in this exercise. As in any other
strategic initiative, complete and timely
communication is as important as planning
and execution. The initiative needs to
consider the organizational culture, pick the
right resources, and implement a structured
approach to manage the rate and scope
of change. Proactive communication, team
building, roadmap development, training,
and feedback analysis are some of the essential
tools towards preparing for this change.
“Electronic exchange of
standardized product data via
GDSN enables efficiencies
in our supply chain through
improved data quality while
also empowering us to react
faster to our customers’
needs”
- RICH BORRASSO
Business Development
Manager, Kellogg’s
