Manufacturers and Retailers: Is Your Product Content Distribution House in Order?

Create: 09/08/2015 - 13:00

Manufacturers and retailers looking to keep pace with online market changes are in for a wild ride. 

For many, the answer to a singular question may well hold the key to merchandising success: “Can we make our product content distribution so efficient that it ensures products appear in the right places at the right time and has the quality to drive sales, uphold our brand, and reduce returns?”

Retail giant Walmart has made strides in the area of enhanced product content standardization and distribution geared to driving online consumer engagement, acquired Chinese retail leader Yihaodian to expand its ever-growing global e-commerce reach, and earmarked a billion dollars to its overall electronic retail efforts. This all sends a powerful message that the company is serious about getting products to market quicker and to provide what Walmart has said will be “a seamless experience for customers across online, mobile and stores.” All while addressing business inefficiencies and underlying costs.

Importantly, Walmart’s focus aligns with what is happening in the broader retail market.

According to the U.S. Department of Commerce, online retail sales in the first quarter of this year soared to a record $80 billion, up 3.5 percent from the fourth quarter of 2014 in seasonally-adjusted figures. Overall sales dropped by 1.5 percent during the same period, the first decline in nearly three years. On a year-over-year basis, e-commerce purchases rose a staggering 14.5 percent – compared to just a 1.6 percent increase in total sales – as more consumers opted for desktop and mobile screens to acquire goods rather than venturing to the mall or big box store.

It is clear, say industry analysts, that the move to online storefronts is not only here to stay, it is accelerating rapidly. Even during the 2009 economic downturn, online merchants outpaced their brick-and-mortar counterparts. Post 2009, during the economic rebound, quarterly e-commerce sales have been even brighter, increasing an average of 3.7 percent compared to 1.1 percent for total sales.

No matter the climate – political, economic, or otherwise – a few mouse clicks are making cash registers ring at a faster clip than in-store cart pushing.

How can leaders in the product delivery supply chain keep up? One clear way is to take advantage of a simplified product information exchange solution which allows companies to reallocate content improvement efforts.

This idea is not lost on Walmart, which is investing heavily to ramp its electronic business in an effort aimed directly at making inroads against online stalwarts such as Amazon. The company sees accurate, high quality product content as a key component of its overall e-commerce success strategy. To this end, they recently outlined a major data initiative that is intended to better collect and display improved product information and image assets from its more than 6,500 manufacturing partners on the Walmart.com site as well as across Walmart’s other purchasing channels. 

Walmart’s identification of enhanced product content as central to its growth is both notable and laudable. But this effort, which includes product attribute submission that must adhere to a Walmart-developed specification, is only half of the product asset acquisition story. The other part speaks directly to the need for manufacturers to not only bundle their wares into neat packages with brightly-colored bows that retailers and consumers like and find useful, but to attack the current content distribution challenge.

Walmart understands this as well and is now utilizing a powerful content distribution network to speed time-to-market; instantly access a supplier’s complete catalog, including new products; and address such costly business realities as the level of goods returned. In many instances, the company believes, higher quality content, served up via an integrated distribution infrastructure in the manner and form the retailer requires, will positivity impact the volume of such returns as well as assist with other cost-saving initiatives. The result: More products sold and at higher margins.

Let the ride begin.

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Mike Lapchick

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