Product Data is the New Logistics

Continuing my series briefly looking at organisational impacts of multichannel.

In my last post, I proposed a nice organisational direction leading through various stages until true multichannel is reached. Unfortunately this usually falls at the first hurdle: new organisational disciplines which didn’t exist prior to multichannel, and – here’s the rub – don’t obviously fit anywhere in an existing retail organisation and/or nobody “wants” them.

Many new disciplines – SEO for example, or email marketing – tend to drop nicely into place. In the early days of “Multiple Channel” retailing, with a Rebellion or Distributed organisational model (see my previous post) SEO activity will sit in an eCommerce team itself. Later on as the organisation matures, it will move naturally into Marketing.

Others, such as managing a Fulfilment Centre specialising in single-pick customer orders (as distinct from bulk retail replenishment) tend to land naturally in their primary discipline from day 1, in this case Logistics.

The “bastard discipline from hell”, as everybody who has ever been involved in a new eCommerce implementation knows all too well, is Product Data Management. It is always on the project critical path. And nobody ever wants to own it, either during implementation or afterwards in business-as-usual. It’s one of those tasks you can never do well, only do with varying degrees of less-badness, so there’s no reward. It’s horribly labour intensive, so there’s lots of cost. And it’s completely new, a discipline that simply wasn’t required before online channels came along.

Where should it sit in the organisation? It could sit in “eCommerce”. This, to me, is one of the tests I use early in an engagement to understand how multichannel a client is. If they still have Product Data Management in some sort of eCommerce leper’s camp, safely isolated from the rest of the organisation, then I can be pretty sure a client is organisationally pretty immature.

It’s often forced into Commercial or Buying teams. The argument is that these are the people with the relationship with suppliers, so these are the people that can source the data. While this is true in a way, I’m not sure I’ve ever worked with a Buying team whose primary competence is Business Process/Administration. On the other hand, at least these teams have a strong focus on sales (usually! – and yes I have worked with at least one retailer where Buying didn’t appear to have a sales target…). And lousy product data online usually equates to lousy sales.

My favourite example of lousy product data ensuring lousy sales, from some years ago now so I think I can use it without causing blushes, is this product sold by a major DIY retailer:

“What size are these doors?” is fairly fundamental. Worse still, the question had actually been answered on the forum, with a precise and accurate answer… by one of the retailer's buyers for the Doors category.

So, if Product Data Management doesn’t belong in eCommerce, or in Category Management, where else? Well, some sort of dedicated admin team is possible. But where should it report to? It’s unlikely to be big enough to merit a top-table seat in its own right, so it’s still left looking for a home.

Take a closer look at it. What does it involve? Well, it’s very business process driven, standards and compliance are essential, flow management is important, just-in-time-delivery is a core competence, it’s about getting something from suppliers, and you are always working to serve demanding sales channels… sounds very like logistics / supply chain doesn’t it? The difference is that instead of a physical supply chain via warehouses, there’s a virtual supply chain via data warehouses.

 

I do indeed know of organisations that do this (I say this hastily before I get hostile comments posted by irate Logistics Directors).

But it’s also perhaps the strongest illustration of another key consequence of become Multichannel: very new disciplines in traditional functions. Logistics is the New Marketing has been one of my themes in these posts. Here’s a related one: Product Data is the New Logistics.