PIM for Ecommerce: The Beautiful and Hard Truth About Product Information Management

PIM for Ecommerce: The Beautiful and Hard Truth About Product Information Management

You’re excited. You’ve just announced to the team that your business is ready to launch international stores the following year. Of course, the localization and currencies problem is just a minor one …

“We’ll just set up another store, and we’re set,” one of your ecommerce managers says.

Then, a product manager speaks up, “How on earth are we going to manage two or three times the product information?”

Maybe you’ve already crossed that line.

You knew managing the product information manually would be a nightmare, so you decided to set an automated system up to do that. You launched internationally and put together a system. But it’s been a year since implementation, and now it’s hitting the fan.

Whether that situation describes where you’re at or merely hints at some of the looming challenges, now is the time to evaluate how you’re handling and implementing product information management.

What is a product information management (PIM) system?

Although it might bear similar linguistic resemblance to the legendary 50 Cent track (entitled “P.I.M.P.”), and a delicious fruit liqueur drink (Pimm's), PIM is short for product information management system.

An ecommerce PIM manages your master catalog of products. It takes product data from every location and centralizes it into one place.

Image via “Product Information Management: Theory and Practice” by Abraham Jorji

You and your team can edit and manage all your product information at once from the PIM’s interface: e.g., item numbers, references, catalogs, SKU data, images and videos, translations, localizations, documentation, etc.

Your PIM could provide product information to all sorts of stakeholders, from internal business operations through to suppliers, manufacturers, wholesalers, and customers.

Many companies consider a PIM when they have thousands of products to manage, but even stores with a limited number of products may invest in a PIM system. Despite a seemingly limited product count, they might have a high set of variables and customizations.

Or, if they’re expanding internationally, they might set up multiple stores as part of their localization process. Here are some of the benefits that come with PIM implementation …

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Time Efficiencies from Reduced Manual Data Entry

One of a PIM’s most obvious benefits is the time saved — think of all the manual data entry or frustrating search dead ends your team no longer has to endure.

In his book Product Information Management: Theory and PracticeAbraham Jorij writes:

“According to Goodmasters, 25 min per SKU per year is spent on manual item data cleaning which would take only 4 min with automatic synchronization. In other words, 20 man months per 10,000 SKUs!”

Jorji also cites Heiler, “Before the introduction of a PIM system, less than 17% of staff at manufacturing companies spend less than 2 h per week searching for products. After implementation, this percentage had grown to 36%. For retailers, this percentage grew from 47% to 58%.”

Consistent, Precise, Information

From an operational and bottom line perspective, the benefits of a PIM are significant:

“Aberdeen sees in its research a 67% drop in labor cost. In a similar fashion, the Yankee Group reports an increase in employee productivity of 20%.”

Looking beyond the time savings, Jorji continues, “However, in our own case studies we do not see the cost savings being realized. While the above-mentioned cost reductions are valid, in reality the introduction of a PIM system rarely reduced operational costs. The cost savings are usually directly invested in creating better and more complete product information and/or supporting the long-tail strategy.”

That’s because most companies have a lot of inaccurate data. River Sand Solutions estimates that pharmaceutical manufacturers, distributors and providers are operating at a 30% inaccuracy rate that has become the industry average.

Yet there’s an even more disturbing fact …

Jorji notes that this inaccuracy applies to all data, citing a stat from AT Kearney estimating that:

“30% of all article data from wholesale and producers has at least one mistake in it. It estimates the cost of correction to be between 60 € and 80 € per product.”

Jon Marsella, founder and CEO of Jasper Studios says about inaccurate data, “Most of the time, [data] is messed up, it’s complex, it’s all over the place, and it’s inconsistent.”

While your team might save time entering data, that time gets reinvested into cleaning the information. With a PIM organizing all your information in one place, your team’s new mission is to ensure your data is as accurate as possible.

Cost Savings from Improved Logistics

Image via “Product Information Management: Theory and Practice” by Abraham Jorji

With improved information accuracy comes the return on investment via cost savings. According to Heiler (via Jorji), companies investing in PIM see up to 23% fewer product returns.

The Yankee Group senior analyst Kosin Huang reinforces this finding:

“For companies that have deployed PIM, the annual business improvement averages 25 percent. … Suppliers alike recognize the impact of PIM and will use their PIM IT strategy to differentiate themselves to retailers as preferred partners that can showcase impressive supply chain success.”

With a PIM, Proctor & Gamble discovered that 3.6% of its orders included obsolete products. Johnson & Johnson discovered that inaccurate product data caused 2.5% out of stocks with its largest retailer, Walmart. Both are real-world examples of how PIM can drive business improvement.

But the Real Problem … PIM is Oversimplified

When I started this article, one of my esteemed colleagues warned, “Most people come into PIM with an oversimplified worldview. We don’t want to oversimplify the issue with a trite article.”

Ain’t that the truth …

Jon Marsella from Jasper says:

“When companies attempt to implement a PIM on their own, I think where it really falls down is understanding how far and how deeply integrated the reach of their products is, and how many manual processes they’re using.”

“They don’t anticipate how much work is involved in integrating with these things. Most of our clients and prospects that we encounter have products all over the place. They have them in over a dozen places sometimes, and have various departments managing it.”

This applies to organizations of all sizes. Marsella continues, “Even smaller organizations might underestimate a few things. For example, the number of touch points it takes to make your PIM effective, really get your PIM to become the brains of the operation, which in our view is the way to go as far as the architecture is concerned.”

Examples abound: product taxonomies, product mappings, all of the complexity around product child/parents, bundling products, and discounts. And then there are the potential limitations of marketplace sales channels such as eBay and Amazon.

Marsella says, “When companies go to implement their own PIMs, they also have to consider how to implement their touch points and connectors, and those are death by a thousand cuts.”

Most articles introducing PIM would write about use cases and benefits, then stop there.

Unfortunately, as Ventana Research writes, “PIM is in many organizations still immature – for the moment. More than half (57%) of research participants plan to change the way they manage product information in the next 12 to 18 months. In light of the important role of PIM in supporting a range of business processes, the majority of organizations are making substantive PIM- related changes to their processes, supporting applications and technology.”

Despite rigorous initial research, analysis, needs assessments, and vendor evaluations can improve your odds, a lot of learning takes place when you actually execute. Each PIM’s strengths, and each individual company’s strengths, are so different that it’s tough to recommend a one-size-fits-all PIM.

“Our recommendation to all of our clients, whether they’re small, medium, or large, is they need to be able to get to market faster, and need to be able to iterate over technology quicker,” Marsella says.

To ensure a smooth implementation, Marsella recommends looking for a PIM with onboarding support, one where “you’re going to get some support from a professional third-party that’s going to help you connect your PIM with your external systems.”

“You don’t want one that’s homegrown, you don’t want to develop your own PIM — there are too many good ones now, and they’re just going to keep getting better. Look for a SaaS PIM that onboards quickly, look for one that doesn’t cost too much, look for one that allows you to prototype.”

Amidst the mountains of complexity and critical thinking, it’s crucial for you get beyond the analysis paralysis:

“Don’t spend too much, don’t overthink it, don’t look for a total timeline end-to-end that’s anything longer than three months, with the roadmap of a year out in front of you. Even with larger enterprises, this is still our approach, and it’s worked out really well so far,” says Marsella.

Combining Marsella’s advice to learn firsthand with other companies’ mistakes accelerates the process. For example, according to Ventana Research, the most common barrier to improving PIM is a lack of resources (37% of companies reported this challenge). 

Moreover, PIM is not a purely technical solution to an organizational problem. Successful PIM implementation requires rethinking how your company manages information flow, and will test your team’s communication workflows.

Ernst & Young Principal Can A. Dogan writes for Supply Chain Quarterly about how companies overemphasize tend to overemphasize technology’s role in achieving inventory management objectives.

“Industries are littered with companies that have de-emphasized critical elements such as processes, policies, people skills, organizational design, data reliability, metrics, analytics, and reporting by focusing primarily on technology enablement. These companies often find themselves weighed down with systems that are, at best, never fully leveraged, and, at worst, simply abandoned over time.”

Make sure yours avoids a similar fate.

In Hub Designs magazine, DATAForge VP Jacqueline Roberts forecasting what kind of organizational change PIM implementation will require:

“My best advice is to take the time to develop a data roadmap to provide a clear and precise understanding of the data and its use within the organization. The road map should detail how data is required and submitted for use within the enterprise, account for the multiple uses of the data (purchasing, engineering, marketing, and maintenance), plus the required data elements and structure needed to accommodate each software system.”

With my colleague’s warning in mind, and the beginnings of solutions from these experts, I’ll close with a perspective on PIM to which only a few companies are coming around.

PIM as a Business Performance Driver

Most people see PIM as an expense to be minimized. And with the incredible amount of cost savings that comes with information precision, that’s not an unreasonable suggestion.

But a PIM reaches its full potential when it’s used not just as a supply chain function, but as an asset to drive business performance.

As Marsella highlighted earlier, the benefits include expanding markets and spaces your business couldn’t access before, getting products to market faster (4x on average). It could also mean enabling sales by providing the entire team, and other parties, with easy access to documents and publishing, or marketing by automating digital marketing and social campaigns.

Ready to drive performance?

A PIM is not just about managing product and inventory deployment, replenishment, and control. Rather, it can also be about increasing sales and revenue, improving customer service, and streamlining operational efficiency.

Make sure you have a strong fundamental PIM in place to set your business’s expansion up for success.


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About the Author

Herbert Lui is the creative director of Wonder Shuttle. He was a staff writer for Lifehacker, and his writing has appeared in The Globe and Mail, the New York Observer, and Fast Company.