5 Ways to Leverage Product Information to Grow Sales
1. Speed up time to market. Reducing the time it takes to introduce new products has become a top priority for retailers. By speeding time to market, companies can generate revenue earlier, increase margins and establish a sustainable competitive advantage. In fact, studies have shown that high-performing companies on average generate 61 percent of their sales from successful introductions of new products and services. Furthermore, companies that experience an 80 percent revenue growth from new products typically double their market capitalization in a five-year period.
The process of developing and introducing a new product can be inherently complex. Even the simplest products can have hundreds of attributes, all derived from multiple systems that reside both within and outside the organization. Introducing a new product also requires the coordinated efforts of dozens of individuals within the company — not to mention multiple geographically dispersed external partners and suppliers.
A strategic information management platform enables retailers to streamline the process of gathering all product data from suppliers and partners. It cleanses and manages that data centrally, allows for branding and versioning of the information, and feeds all business systems needed to consume that data.
As a result, a business can share more accurate information with its websites, e-commerce applications, marketing initiatives, point-of-sale systems, customer service applications and other channels with more speed, reliability and security. A strategic information management platform also ensures that all sales channels have the information they need to educate consumers and sell products faster and at a higher return.
2. Reduce product returns. Product returns represent one of the most overlooked and significant causes for profit and margin reductions. The typical product return involves so many steps and has such a far-reaching impact on every area of the business that the total annual costs now affect 2 percent to 3 percent of an average retailer's sales. And this doesn't begin to address the significant impact on customer loyalty. A recent study found that 25 percent of consumers who return a product are unlikely to buy from that brand again.
A number of recent studies, including an analysis by Accenture, discovered that most returned products don't have a defect at all; they're returned due to false or insufficient product information. Needless to say, these inconsistencies lead to consumer dissatisfaction and frustration.
Having a strategic information management process in place can reduce product returns by managing correct product information across the supply chain.
3. Optimize inventory levels. Inventory accuracy is a staggering problem that leads to costly challenges for retailers. Studies have found that merchants generally only have accurate inventory information on 35 percent of their items. Research has also shown that 47 percent of out-of-stock items with poor forecasts result in inconsistent, inaccurate and incomplete data being housed in supply chain, merchandising and inventory systems.
A strategic information management platform enables retailers to centrally manage all of its product operational information and automatically feed each consuming system, sales channel and business process individually. This approach provides a single, consistent view of product information without forcing business units and suppliers to have to standardize on the same system or data format.
Optimizing inventory levels starts with having one version of the truth across all divisions, departments and channels. This ensures that you have the right products at the right levels in the right locations.