Merchandising (managing product data, executing promotions, and setting pricing) is critical for the multichannel seller. Retail is more complex than it has ever been. Therefore, the need for processes and technology that help you stay on top of your product data has never been stronger.
To be successful in the modern retail world, you need to understand how merchandising is different than it has ever been and why you should be using a product information management system to stay ahead of the game.
Merchandising in the Past
Let’s go back to the 1950’s. You run a local sporting goods store. You sell a handful of baseball gloves, football helmets, and sports paraphernalia. You’ve got a hundred product SKUs total, or so.
To the 1950’s retailer, merchandising meant something like keeping a booklet of all your items.
Maybe you had a binder with all the pictures and descriptions of your products. Maybe you kept paper records of your current inventory, outstanding orders from suppliers, etc. You kept a ledger of accounts payable, cash, and your other Accounting 101 metrics.
Running a promotion meant hanging a sign in the window and taking 10% off at the register. Updating pricing meant replacing the price tag.
It was simple, and it was more than sufficient, given the realities of the time. But, times have changed.
The 1950’s retailer had one customer touchpoint: the store. The modern retailer must manage multiple customer touchpoints via multiple channels. Maybe you’ve got a few stores (all with digital point of sale systems). You’ve probably got at least one web store. Maybe you also sell products on Amazon or eBay or some other online marketplace.
What about the back-office side of your operation?
You’ve probably got many suppliers. Some of them sell you the same products. Some sell you different ones. Some sell you alternatives that are about the same, but not quite. They all manage product information a little differently. They all have different rules and categorizations. (More reading: How to Ruin Your Business Doing Drop Ship)
Today, you’re fighting a battle on many fronts. Winning requires that you keep your product data updated, usable, and correct. Every channel has its own rules and needs, yet they all require data from your systems.
More Channels, More Problems
Both Amazon and eBay provide a defined product category taxonomy to which you must adhere (you can’t list a football jersey under “Kitchen Gadgets”). They are different from one another. They are also different from the category taxonomy that makes your own web store easier to navigate.
Each channel requires different image sizes. Each has different data elements, like color or chest size, which are required. And, while we’re on color, one system calls brown “brwn” and another calls it “BR”. Then how do you run a price promotion for an item on your web store, but not on Amazon?
How do you keep all of that straight?
You could try using a spreadsheet, but that quickly gets out of hand. You have to manage two versions of the color attribute? You have to copy the item’s descriptive text into “description” and “details”, just so it’s correct in two systems? You can’t set different prices in different channels?
Multiply this complexity by n number of products. Continue adding more channels to grow your business. Keeping your product information accurate, organized, and updated becomes exponentially more difficult. This is the crux of multichannel merchandising.
Conquering Multichannel Merchandising
You need to define processes for how you merchandise your items. If you go at it, shooting from the hip, you’ll always be climbing up hill with data. Your customer experience will reflect this. Be intentional about managing product data.
Get the right technology–a product information management (PIM) system. No matter how organized you are about managing product data, the problem is just too big. A PIM that can synthesize your data, allow you to make bulk changes, and interface with all of your channels is an absolute requirement. (The problem is bigger than Excel.)
Train yourself and your people. Managing your product data is not like keeping records in a spreadsheet. Understanding the basics of data science and data management technology will benefit you immensely. Invest in your team.
Always look forward and ask questions. How might today’s way of doing things get turned on its head tomorrow? You must be constantly challenging your processes and technologies to be agile. What can you do to future-proof your business?
Multichannel merchandising is difficult, but the challenge can be overcome. Those who do overcome it will position themselves to win their markets. Merchandising is as much a process challenge as it is a technology challenge. But marrying great process with great technology will transform your business.
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