This week on the Friday 15, Andy & Brian discuss:

– Does it make sense for an online marketplace to have brick and mortar locations?

– Should you buy a PIM early in your digital journey, or once you’ve built up a sizable amount of product data?

– A PIM won’t solve your data problem, but it will force discipline on your organization around product data.  So why doesn’t everyone have one?

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Brian Beck: All right, Andy Hoar, welcome to Friday 15. It’s Friday April 26th. We’ve got a great session today. We’re talking about PIM. We’ll get into that in just a moment. But another week gone by, Andy, another great week of activity in the field, all the rest will get a report from the field from you. But welcome, Andy, to our Friday 15 this week.

Andy Hoar: Yeah, great to be here. Can we jump in? This is one of our favorite issues, and we’ll talk about why it’s one of our favorite issues.

Brian Beck: But first, before we jump in on that, Andy, some breaking news. This is really interesting from eMarketer this week. They did a story that talked about digital marketplaces, vertical marketplaces, and retailers that were launching their own marketplace. Talking about how they differentiate and trying to get more physical locations to gain an advantage over large marketplaces like Amazon. So I don’t know if you saw this, Andy, but I think this may be something that’s coming to B2B. What eMarketer said is that experimenting with brick and mortar is a smart play for smaller marketplaces who want to put their products in front of a larger audience because the majority of retail sales on the consumer side are in store. So for example, Target and Michaels and some others who have these virtual marketplaces, ecommerce marketplaces, that are now bringing those sellers on their marketplace into their stores, which is really fascinating. And I’m wondering if this is coming to B2B. I don’t know. It’s hard to scale this, but they’re trying to find ways to differentiate from the big marketplaces like Amazon. What do you think, Andy?

Andy Hoar: I was only a matter of time before this happened. I remember hearing years ago that online would be a compliment to offline. And then Amazon came along and said, hey, everything offline, we can do online. And then the script kind of flipped, then it was “online was going to sort of eliminate offline”, which we never thought was going to happen. But the center of gravity is different now. Online is now driving offline. And this is a consequence of that. And your online business is driving things offline. All of a sudden having an offline presence has a special meaning.

Brian Beck: Yeah, you see it with Amazon, obviously, because they’ve obviously moved into physical retail over time, things like that. I just don’t know, for me, I just don’t know if this is a play that’s going to work from a marketplace perspective, because if you think about it: How do you scale a business like this? Marketplace sellers, Amazon, for example, has millions of sellers. And companies like Shein and Wayfair and Michaels – How do you translate all those sellers, where a lot of small sellers are online, into offline settings? Maybe it’ll work. I don’t know.

Andy Hoar: I still think that a lot of this physical location to online stuff is really about returns and about reverse logistics, because nobody really talks about this, but a lot of people buy stuff on Amazon and then return it to places like Whole Foods and Amazon Fresh and Kohl’s. You can’t just say Amazon is 100% online. They’re doing a lot of offline stuff. Maybe it’s not quite as massive as you think it would be, but there is a connection between the two, and I really wonder if some of this is really about the reverse logistics side of it

Brian Beck: I think you’re right about it as they expand their assortment. Now that it puts it on the retailer in this case to actually be responsible for taking back product sold by a third party seller on their marketplace. So I agree with you. I remember my days at Harbor Freight Tools, Andy, when we would get people in the store from our online website, return or buy online, pick up ib store, they would buy a lot more in store. So it’s the data is there. So Andy, we’re going to talk about a favorite topic, PIM. Is a PIM needed in B2B e-commerce. My goodness, we put this on LinkedIn. We had thousands of impressions, likes, comments, shares. It was crazy. Everybody wants to talk about this.

Andy Hoar: Who did we not hear from?

Brian Beck: Well, that’s the crazy thing. We didn’t hear from anybody at the PIMs. I even called them out. I even called out every single freaking PIM in the market, not a single person commented from any of the PIM companies. I’m like, what’s going on here? Damn, there’s a problem here. I don’t get it. I don’t get it, man.

Andy Hoar: We talked to everybody in the industry. The search people talk to us. Obviously, the commerce platform people talked to us. We talked about how big the data problem is. We’re going to talk about it here in a moment. The PIM fits right into that. When we talk to PIM people, the conversation goes nowhere. I don’t get why these PIM folks are not all over this. We’re going to talk about some data here in a moment that’s just mind numbing about why they wouldn’t be more involved with, for example, us and B2B ecommerce. I’m sure they’re going to tell us that they’re selling directly whatever. I don’t know. I don’t get it. I don’t know.

Brian Beck: Maybe it’s such a big problem that they don’t need to engage in the community. I don’t get it. But our community folks, if anyone from a PIM is listening here, you have a big problem with B2B commerce people. They have a big issue with data inconsistency, normalization. We’re going to talk about it in a second. Anyway, I may be screaming in an empty chasm here, but anyway, there’s a real opportunity here, I think, for companies to solve this issue, because it is a big problem as we’re going to share. Andy, you were in Minneapolis this week at a roundtable, and a great one. We had close to 40 people at this thing, and you facilitated it. You were talking about AI, right? But I’m sure data came up as part of this conversation as well, right?

Andy Hoar: Half the conversation was about data. The first part was we wanted to do AI. The second part was, oops, we can’t do AI because our data is such a mess. We’ve got to get our data into order. AI can help with that, but you have to put it someplace. A PIM is a perfect application for this. It’s probably the most emergent issue we’ve seen in B2B is about the data. You know, I’ve talked about this many times. PIM is a critical component of that. In fact, I would argue the most interesting thing about PIM is when do you buy it? Do you buy it earlier? Do you buy it late? This is what we have a lot of conversations about. It was a great event. It’s the Minneapolis or Twin Cities chapter. We actually held it in St. Paul, which is right next to Minneapolis. Twin Cities chapter really showed up. Great brands that were there. Great Northern was there. Toro was there. 3M. A lot of great companies there. People were thrilled. And we’re doing it again in the fall.

Brian Beck: Yeah, that’s a really kind of unrecognized center of B2B. Minneapolis is. So thank you all for joining us there. And we’ll continue to do these round tables around the country. We’ll get to that a little bit later. But yeah, again, it gets back to this data issue because it truly is, Andy, a problem for B2B commerce. And it’s not even just e-commerce. We see this in my work with Amazon even. Every single one of these channels, whether you’re selling to a distributor, you’re selling yourself online as a distributor, you’re consuming data from a manufacturer, you’re trying to sell in a marketplace like Amazon, or even just your sales team is trying to communicate accurate information. There is a data problem and this data problem is causing issues for B2B companies. Gartner said this: 40% of businesses failed to achieve their objectives due to missing, incomplete or inaccurate data. So there’s an issue here that talks about real business results. In fact in Harvard Business Review, Andy, a couple years ago, they revealed only 3% of companies had data that meets basic quality standards. And they put a number on it: bad data costs the US $3 trillion a year. It’s insane. So if you think about this from a practitioner standpoint, why doesn’t everybody have a PIM? It manifests all the way down to the e-commerce site. What makes B2B buyers go elsewhere? I’m showing a study here, Digital Commerce 360. Number one reason, products are unavailable or hard to find on a B2B e-commerce site. What does “hard to find” tie back to? Oh sure, it’s the search functionality. But what else?

Andy Hoar: Let’s figure out why can’t you find this product? Well, it has a bad description, incomplete description, one picture that’s grainy, the attributes are not well defined. That’s what a PIM really helps with is attributes. Because if you put a product in a PIM, it’s going to force you to describe that product. Those attributes are really the mother’s milk of a product, in merchandising and selling a product. It doesn’t solve your data problem. You have to have clean data, but a PIM will force discipline on you and mandate that you describe a product accurately and put it in the system. And then a company like Salsify and others. You can syndicate this to multiple sites. If you’ve got a good PIM, you could be selling stuff on your website and a vertical marketplace, on Amazon, you name it. But it’s a step in the process. The question is, when do you actually get the PIM? Because I know a lot of companies that bought PIMs and two years later, just sitting there like the gym equipment in your garage doing absolutely nothing. And then it’s like a sunk cost. Like, we have to use it because we bought it. And it’s like, I wish we’d just cleaned up our data first and then bought the PIM. There’s no argument for not having a PIM. You can’t just fill this stuff in an ERP. And a lot of e-commerce platforms can get you started on the PIM front. They have native capability. But if you’re a serious player, you’re going to need a best of breed PIM.

Brian Beck: Yeah, no question. We’ve got some great comments. And I’ll read a couple of them. But I think it’s also important for our audience here to define what exactly is PIM, right? And this is a definition that I pulled from Adobe’s website, which I think is pretty good. Product information management, PIM systems, let users store, enrich, and manage complex product information. PIM tools centralize product-related data streamlining the process of updating and managing accurate information through multiple sales and marketing channels. So it’s really a tool or a platform. And you asked the question, Andy, just a moment ago, why doesn’t every company have a PIM? This is a study by a company that does PIM, called Informatica. And what this study revealed is – the question they asked is “why you’re not considering the implementation of a PIM solution?” Number one reason was lack of a cost-effective business case? Negative ROI analysis? What?

Andy Hoar: That’s the same story you hear from CMS. eCommerce actually is in many ways blessed because they can show an ROI. But CMS, you know, we got a catalog. Why is a better catalog going to produce more revenue than a slightly worse catalog? On an incremental basis, you can’t really establish that one CMS is significantly better than another. And PIM suffers from the same problem. Hey, if you’ve got clean-er data and it’s clean-er than some other data, how do you establish that it’s clean-er data? And I think there are ways you can actually measure this stuff, for sure, like the velocity of it, the appearance of it, the accuracy. You know, you can measure these things because, again, innacurate data means low conversion rates. But it’s hard for a lot of companies to make the argument that data is a mess, the better we manage it, the more money we can make. They’re like, well, stop with the “data is a mess thing.” I’m not sure. Is it? Because I see data on our website.

Brian Beck: Two things I’ll point out here. One is that, as we look at, for example, Melissa Walner, who’s a longtime industry veteran, she commented on our LinkedIn post. And this is the perception of ROI. It could be different here than the reality of it, meaning, PIM is not intended to be a direct revenue driver. So that can make getting buy-in for the investment more difficult. So your executive team, if they don’t see that you’ll open up a new channel, launch a marketplace or do this or that. But PIM is foundational and you look at how Forrester defines it. ROI from a PIM system, you can use a product information system, PIM system to decrease time to market for new products, acquire and grow new customers and accounts, and increase customer lifetime value. There IS a return on investment to this. I was doing research on this yesterday, Andy. It’s clear. Maybe it’s not as clear to the executive team and doesn’t get funding, right? Like Melissa said. I think there’s a clear ROI here, but it’s not just the system, right? There’s other things which I think make it a little tricky.

Andy Hoar: And you need to know what your metrics are. We talked about this in Minneapolis, and spent quite a bit of time talking about it because all roads lead to metrics. If you don’t measure it, you’re not going to know it. And you should start out with the metrics. Okay. How are we going to define the success of the business? The funny part about that is that forces companies to figure out what business they’re in, which is part of why they don’t like to do the metrics thing, because it forces them to say, this is what we’re doing. We’re selling to these people. Here’s how we’re going to measure that and then everything cascades from it. But yes, there is a way to measure the value of a PIM. And I still think there’s this understanding in the industry that data is a cost center. Less mature companies perceive it to be a problem that needs to be solved. It’s not. It is what differentiates you. We’ve talked about this, Companies can build, buy, borrow, steal every other part of their business, except the one about their customer and their product data, in particular customer data. So how is that not the most important thing you own?

Brian Beck: Exactly. Well, here’s the thing. And Amber, thank you for your comments. In fact, I even Amber Robinson, who’s commenting here on our stream, on our podcast. You know, Amber, thank you for your comments. I actually pulled one of your quotes out of this. One of the things that emerged in all of the dozens of comments we got on our LinkedIn post and poll was that it goes beyond the system. So I’ll read Amber’s first because she’s on the commenting here. Amber Robinson said it’s interesting to me that many companies want to invest and seek AI solutions, which are fundamentallyl based on data. But they haven’t gotten their data governance and management systems well organized. And what she says is build credibility, operational efficiency, enable AI. And that will be the next generation of this, and I agree with you. But another comment here from Ken, management of data. So it’s not just about the system. It’s also about how you utilize what goes into the system and the process. Ken said outputs and inputs of systems, how it needs to be consistently enriched and the management process for data. That’s what he’s talking about. So the system is a foundational part, I think, but it’s also what you put into it and behind it.

Andy Hoar: So the good news is that AI now can actually help solve part of that problem. It can help organize the data that it then will, allow you to use AI to syndicate more effectively, promote more effectively. AI is actually a game changer on multiple levels when it comes to data. But there is a fundamental notion that you’ve got to have your data organized enough so that even AI can do something with it.

Brian Beck: So the question is, Andy, does PIM solve the data problem? I would argue that it is a foundational component on its own. It doesn’t solve it. But it forces you to address the issue. You know, I’ll read you a quote we got from Tonya Coletta, who’s head of e-commerce at Metri, which is the largest U.S. manufacturer, distributor of mill work. We asked he – what should you do first?An e-commerce platform? PIM? What comes first? She said, e-commerce came first for us, but I wish a PIM had and what’s interesting here is her quote, implementing our PIM forced us to focus on product data and asset cleanup in governance. We’re still on the journey, but a PIM with accurate data quality content was game changing. So she’s saying, hey, listen, before you do some of these other things, we need to do PIM first because it is foundational. And what she said is it forced them to engage in a process to clean all this up.

Andy Hoar: So a PIM help to organize data. That’s what it does. It doesn’t solve the data problem. It helps you organize data. I use the analogy often times that if you’vr got a dirty garage, you go buy some containers, which is like the PIM. If you put the containers in the garage, the garage doesn’t clean itself up. It will help you organize it. But if you have a problem with just loading stuff up in your garage and you’re constantly having to organize it, the PIM isn’t going to solve the problem any more than the containers are going to solve the problem.

Brian Beck: Exactly. So, we asked our community on LinkedIn Andy, is a PIM system needed for B2B e-commerce? And by a huge margin, everybody said, yes, 92%. They want to solve it. So we should just send this to the PIM vendors so they can actually do it.

Andy Hoar: We’ve got to do it. We had almost a hundred people come in on this. It was well voted on. It was a large group of people. So I’m going to go start a PIM company.