Retailers have for a long time managed products — the overarching category, like “men’s button down shirt” — and items — the specific instance of the product, like "men's white button down shirt, size XL” — in separate systems. For a long time, this has made sense; they are embedded in very different systems and processes and therefore need to be managed separately. However, at a time when the retail experience is becoming more unified, and ‘omni-channel’, with the line between digital and bricks and mortar increasingly blurred, retailers need to consider unifying their item and product information systems. Doing so can provide a much stronger foundation for what is today called omnichannel retail, where retailers seek to engage customers across diverse touchpoints, all of which are linked by data.
In this blog post, I’ll explain some of the benefits of unifying product and item systems and suggest how retailers might approach getting started with such a project.
The benefits of unifying product and item systems
Unifying product and item ecosystems provide a more robust foundation for retailers to both adopt an omnichannel approach — selling to customers whether they’re in-store or online, on the web or social media — and also improving the way merchandising, marketing and supply chain teams collaborate with suppliers and partner ecosystems.
In short, it creates a single source of truth which can be layered and enriched with information and data that is part and parcel of an increasingly complex and multifaceted ecosystem. From quality control to content personalization for prospective customers, a unified product ecosystem enables retailers to have more transparency over products and to build richer and more engaging shopping experiences.
Here are three key capabilities of a unified ecosystem:
It enables integrated and collaborative workflows/automation and lifecycle management. This means operational and digital channel partners can work together to define attributes, descriptions and tags. The benefit of this is that it will improve the customer journey from search, and discovery to pick-up & fulfillment
It helps you align cross-functional value chain capabilities, making you more efficient and helping you deliver value to customers at a faster pace.
It allows you to more easily address common retail challenges such as SKU rationalization, assortment optimization, end-of-life management and new product launches. This is because everything is in one place — you’re not working across different systems.
How to implement a unified ecosystem
The benefits of a unified item and product ecosystem are clear. However, moving to it when you’re used to a particular way of working can be challenging. For this reason, taking a structured and phased approach is crucial.
It should follow the steps below:
Phase 1: Standardize and streamline
Retailers often mistakenly try to modernize existing legacy systems built over many years, composed of many different interlocking subsystems. To begin, then, there needs to be enterprise-level standardization to re-imagine alternatives to current systems that can enable the evolution of your business model.
To do this there are three sub-steps:
Identify the most impacted item or product by category. As an example, you might work with your frozen food suppliers from item setup to product enrichment and fulfillment
Build a unified foundational data model that includes item and product attribute dimensions
Set up a new platform with workflow capabilities that leverage existing PIM (product information management). You can either develop one from scratch or purchase an off-the-shelf solution.
Phase 2: Rationalize and enhance
This phase is about reducing your dependency on legacy systems. You’ll need to initiate a plan to decouple and retire these systems once the new platform is ready. The new platform can be enhanced with new capabilities in terms of data modeling, business logic, workflow enhancements and new integrations that can support new initiatives for growth.
Phase 3: Scale and unify
Once the new platform is in place, it will need to be rolled out. The experience can be scaled across categories and customer segments with enhancements that are appropriate to current market dynamics.
More importantly, you should now be able to manage the item and product information in this unified platform ecosystem. Deciding dependencies will be a long-term decision since it involves organizational alignment. Either way, unifying capabilities into two broader systems than having multiple applications would be a better option in terms of cost and time to market.
A better system for retailers and customers
In the modern retail space, the boundaries between item and product have blurred. There is now a demand for item or product information as a result of new omnichannel fulfillment and a need for business transparency. Retailers have been struggling to scale existing items and product systems to meet this new demand. This is an enterprise-wide initiative that should involve cross-functional item and product domains. Now is the right time for retailers to rethink their current workflows and build a seamless unified item and product ecosystem, instead of pointed system-level tactical transformation.
A quick first step would be to identify high-impact omnichannel product space and build the end-to-end platform experience and workflow involving stakeholders across business, suppliers and merchandising operations.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.
