Some would argue that getting structured product data right in eCommerce is as critical as getting pricing correct. Product data tells the customer what they are buying and entices them to spend more money on upgrades or accessories. When product data is wrong, customers might overlook a product or request a refund when the product isn’t what you said it was. This is opportunity lost and a customer service issue. Both ding profit.
Our experience is with more complicated products that have multiple layers of components, but these processes exist in any company that has a large number of products. For simplicity sake, we will frame the discussion around the following categories of data and where the breakdowns occur in getting the structured content out to your eCommerce site:
- Manufacturing data – manufacturing data is used to identify parts from an internal perspective. This data is technical in nature and typically errors in formatting or grammar are acceptable because the product data is for an internal audience.
- Marketing data –manufacturing data is used as a baseline for marketing content to ensure the technical representation of the data is accurate, but in many cases the data is re-written with a marketing bent.
- Channel data – your channel partners may require data to be presented in a specific way or described differently than marketing data.
- Other audiences – of course there are other internal audiences that need the data in various business functions such as accounting and inventory management, but we are restricting the discussion to eCommerce here.
In most organizations, since different types of data have different audiences, they often reside in different systems. This means the data needs to be transferred from one system to the next, enhanced, then marches further upstream until it reaches the desired audience.
Breakdowns occur when transferring data from manufacturing to marketing. Manufacturing data is usually stored in a PLM system where the products are defined. Marketing data is typically authored in an eCommerce system or even CRM. Many times there is an ERP system in between each system and the data is structured differently. This means a translation must occur from one system to the next which could be done in an MDM system or an equivalent data aggregation and distribution tool. If all the data was perfect, this is still a lot of moving parts to coordinate to keep data integrity. Now, throw in the fact that a lot of times liberties are taken in defining the data such as certain fields are overloaded with text meant for a downstream system. It makes it almost impossible to trace data back to its source when issues occur, so many times downstream authors decide to re-write the content rather than fix the upstream issues.
Re-authoring content for marketing is a commonly used to solving data issues. Marketing folks are re-writing data regardless because the audience is different for their content consumers. But often, re-authoring is used to fix data rather than re-audience it. This is a bad practice, but exacerbating the problem is the fact that the systems typically mirror organizational structures as well and the different authors operate in silos. The organizational impedance is too great to overcome and authors will just re-write it for their own context. This means that the data is still wrong for the original author’s audience and if the data was ever changed in the original source, then none of those changes would be reflected downstream.
Codifying rules for data manipulation is the third area where problems occur. As mentioned, upstream users may employ tactics to send signals to downstream systems like overloading text fields or appending text to the front of names. One of our customers used a price of $99999 to signify that the part was disabled. There were no input rules around it, so untrained users thought that any number over $99999 would work or that $999999 would work which wasn’t the case. The MDM system had been coded to recognize exactly $99999 and nothing else. Hundreds of such rules can exist in a large scale deployment.
All of these complications lead to errors on the eCommerce site and sometimes these errors are costly. One customer we worked with left a component off the description of their product which lead the pricer to discount the product and then they shipped 50 free optical drives for free! In another case, an inferior product was labeled with high end components but priced compatible with the lower end product. Customers purchased the product and received the inferior product. Customer service reps dealt with the issue for the next two weeks costing the company money for each return.
There’s no silver bullet for solving these issues. The inconvenient truth about data production is that it is complicated when you are doing it on a large scale. The lynchpin is twofold: solid processes for addressing data issues and secondly a holistic MDM system that is capable of pulling in data from many different sources and then using business rules to transform the data into many different formats needed by the downstream systems. Without these two things you’re going to be chasing your tail tracking down various flat files and reports, importing them into too many independent systems. So what do you need to reduce errors in the process?
- A solid MDM system that is capable of pulling in data from many different sources and then transforming it to the format you need for your eCommerce system
- The next thing that’s needed is a hierarchical representation of data in the eCommerce system set up so that the manufacturing data is at the lowest level, then eCommerce, then Channel. This ensures that when new technical data comes in, it doesn’t overwrite what you have and you can use the data if you want to.
- A good process for identifying errors in data and then getting it corrected in any of the failure points. This cannot be underestimated and no system is going to do it for you.
We’ve been able to do this with a number of customers, but like I said, it’s not easy. Only blood, sweat and tears will get you through it. But once you’ve corrected the failure points, you’ll see harmony descend on the process and your data quality will go up resulting in improved profits.
In eComm when you fulfill products, you have a few choices. You can build to order, ship from inventory, or have partially built products that you finish and ship when ordered. Depending on your products and customers, you may have a mix of these different models.
I’ve written a few posts about pricing and products, but our experience really extends to all aspects of the sales process. We have worked with several Fortune 100 companies and recognize that in a product company, you know your offering is more than simply a product. Your offering is the intersection of product, price, and availability. You interest your buyers with the product, price drives their decision process, and when they can get it finalizes the decision.
Availability and eComm. By combining product customization, dynamic pricing and availability on a website, you will give customers the tools they need to make the trade-offs between a specific product configuration and speed of delivery. Some customers want a specific model and others want it now. The flexibility of having inventory coupled with build to order gives your customer this option. From an eComm perspective, you need to provide this information in a way that is useful for your customers which will help your sales effort.
Display availability prominently. On the site, when the customer can get the product should be displayed prominently. As they’re browsing, they should be able to see the product ships in 2-3 days or 3 weeks or whatever your lead time is. As mentioned when customers are making decisions about products, availability can be a trade-off that the customer bases a decision on. It isn’t always the guiding decision for all customers, but plays a part.
Guide customers to inventory. In a previous post, I discussed how you could use good, better, best products to guide the customer into a starting point configuration. The interesting thing about it is that when you provide these options, some segment of your consumers will simply buy these products outright. This can help you plan inventory given that you know you will sell some percentage of these products. You can pre-produce these products and put them in inventory for quick shipment. One way to guide customers is to offer special discounts on inventory products that aren’t valid on configured systems.
Build to order. The higher end products are more specialized and customers understand that it takes longer to get. Once they get off a standard model and start customizing it, the changing lead time should be displayed. These high end products are typically higher margin, too, so by providing quick ship lower end models coupled with build to order custom models helps you maximize your profit. You might even want to minimize upgrades on lower end models and allow more upgrades on higher end products.
How do you help planning from eComm? Displaying the data on an eComm site is the first step. The second step is fulfilling the product. This requires solid planning which is beyond the scope of this post. There are some guiding principles you can use from the sales side, though to help the planners do their job more easily.
Quick ship. For products you’re going to ship quickly, it’s really best to have local inventory. This is easier said than done. As mentioned before, when products are displayed prominently on the website, it is more likely that the customer will buy them. So, some percentage of customers will buy those products and you need inventory for them. Planning this requires a synchronization between analysis of what configurations people have bought in the past coupled with an educated guess on what your future inventory needs will be based on your promotion calendar. There are lots of software products that can help plan this on the market and it needs to be right. I used to work with car companies and they were notorious for forecasting black exterior / black interior cars and forcing dealers in Texas to buy them to get the trucks they wanted. The cars didn’t sell and dealers would have to discount them steeply to get rid of them, then the forecasters would assume they sold well because people bought them. It was a vicious cycle.
Configure to availability. This was always the gold standard of customer satisfaction. Give the customer ultimate flexibility in selecting your product options and then build it to order when they configure it. Realistically, you can’t warehouse all the permutations of configurations you can build. But you can direct the customer to common configurations with shorter lead times and offer more demanding customers the options they want at a longer lead time. Years ago, we did a project with a construction equipment manufacturer where the customer could configure the product and in real-time the planning tool would slot the configurations in the factory to tell the customer how long it would take to get the product. It was awesome! But the simple truth was that, while technically feasible, when you’re talking about a lead time longer than a week then the customer doesn’t need an exact delivery date. So, lead times on parts are really sufficient. When you’re doing configure to availability, the simplest way to provide the data is to have lead time on each of the components then display the longest one to the customer. If you can display the lead time per component next to the price in a configurator, that always helps a customer make decisions.
Simulating configure to availability. Also known as re-configuration, this is also easier said than done and no one does it very well. Car dealers do this all the time by offering locally installed options such as sunroofs or other packages, but the sales rep typically has to offer the option to the customer rather than an eComm site. In the computer industry, you can re-configure a lot of options on desktops, but laptops are harder. With laptops you can swap out memory easily and a larger hard drive can be installed then re-imaged, but other options are more difficult. As mentioned in a previous post, upgrades help increase profit and if retailers or warehouses would figure out how to do this efficiently, they’d be able to increase their profit. I bet Amazon will figure it out one day and then everyone else will follow their lead!
Notify your planners of promotions. I know it sounds obvious, but we’ve seen many times when price discounts are not coordinated with fulfillment. Fulfillment finds out when product suddenly starts running out of stock in the middle of what should be a big sale.
All of this assumes you have a decent handle on your inventory and planning process. Without that, none of this will work. Customers don’t appreciate being told they can get a product by a given date and then it doesn’t show up and there’s no notification. On eBay in particular, if you violate your service level you get a lower seller rating which will definitely affect your sales! As explained, your offering is the intersection between product, price and availability. The balancing act of pre-configured machines to build to order is a challenge, but when you do it right you can really maximize your profit.