What will determine the future of digital commerce?
Today, digital commerce is a primary business driver for retailers, brands and distributors. According to an analysis of US Census Bureau data by research firm Stratably, digital revenue is expected to grow 8.4% in the US market by 2024, compared to in-store growth of 1.2%.
As digital commerce has become increasingly important, there has been a corresponding explosion of downstream channels where brand manufacturers need to send content, from stores and marketplaces to social stores and direct-to-consumer websites. Each of these channels has different rules for the product data they accept, and these rules change often; Target, Walmart, and Amazon have changed their data recording requirements nearly a thousand times by 2023. The reasons for these changes vary: varying regional regulatory requirements, unique merchandising capabilities required by the channel, or varying levels of digital maturity between channels.
These constant changes make it extremely difficult for business teams to keep their data organized and optimized for every destination. It is equally difficult for IT teams to maintain data management and traceability of the enterprise’s product data because it is sent so frequently to so many different channels. To achieve success, many organizations use a Product Information Management (PIM) system to centralize and store product data, but the architecture of a classic standalone PIM solution is not designed to support digital commerce. In fact, it can hinder success.
Product experience management (PXM) solutions, on the other hand, are built for digital commerce and are already being widely adopted by brands, retailers and distributors looking to centralize, connect and automate the product data that powers digital, omnichannel commerce.
How do PIM and PXM solutions compare, and which can best help your team win in digital commerce?
Characteristics of a classic PIM
Classic PIMs are created to manage internal data based on an internal data schema. IT teams define schema attributes and properties in relational databases, cleanse their data, and then load that data into the PIM to create a single “golden record” for each product.
Key classic PIM use cases include:
The “Golden Record”: The PIM category emerged when the critical need for IT leaders was to centralize disparate product information, creating a single “golden record” for each product through relational databases based on an internal data schema. However, the gold record has lost relevance as business teams now need to store, manage, optimize, and deliver hundreds or even thousands of continuously optimizing gold records based on external schedules and requirements. Failure to do so could result in product data never being published, losing search rankings, and ultimately losing sales.
Rigid data management: Classic PIMs effectively aim to prevent changes once the data has been entered into the predetermined schema, creating a rigid data management process that makes it both difficult and expensive to update data; Business teams rarely have access to change the data or attributes in the PIM and this requires the intervention of IT or an external PIM vendor. However, because endpoints change their requirements so frequently, a system that enables commerce success must actively enable, not prevent, data revisions as business teams optimize product information for delivery to each endpoint.
The PXM use case
PXMs combine PIM back-office data management functionality with front-office, market-facing capabilities. They include PIM features such as hierarchy, taxonomy and governance, while adding additional key capabilities to support digital commerce, including:
Multi-channel data management: Management of channel-specific data schemas, values, and validation, allowing users to save a gold record while simultaneously saving versions of the product record that meet the requirements of each data destination.
Channel Connectivity: Connectivity with channel destinations, such as Amazon and Global Data Synchronization Network (GDSN), to get information to market faster, often through different mechanisms tailored to each destination.
Collaboration workflows: Workflows that typically involve people from other companies, such as external agencies, distribution partners, or downstream retail customers.
Improved content: More types of data and attributes, including items supporting content such as videos, comparison charts, and lifestyle images.
Company-wide user access: Administrative features that allow many users to access the product data and use it for their own workflows (e.g. legal, retail media, service and support teams).
Automation: Automation to stimulate collaboration between teams; proactive alerts about content gaps and errors; AI-powered content generation and recommendations; and more.
PXM solutions are designed as a flexible (not rigid) system of record that can store a core product record, much like a PIM, while still allowing transformations of that record to meet the unique requirements of each endpoint. These key features of PXMs allow teams to work together to keep up with the pace of digital commerce, driving the success of their organizations.
An extension of the PIM category
PXM solutions were initially worse at product information management than PIM solutions, but better at syndication, connecting product information to different destinations on the digital shelf to drive revenue for the enterprise.
Today, PXM solutions actually offer better data management than classic PIM solutions. They are designed to create and manage the golden record, which is the primary purpose of a PIM solution, and connect this information to the digital shelf to drive enterprise sales – all while maintaining adaptability to ongoing changing market requirements.
PXM solutions can do everything PIM solutions can do, but PIM solutions cannot do everything PXM solutions can do. This represents a fundamental expansion of the definition of the product information management category, creating an entirely new category.
PIM for commerce will cease to exist
The product information management category is in transition, with PXM solutions fundamentally expanding the basic use case for systems that store product information.
Anyone who buys a classic commercial PIM solution will need to replace it or add a PXM solution sooner rather than later, and eventually software solutions based solely on PIM will become obsolete.
On the other hand, innovation and investment in PXM is progressing rapidly. It is an exciting space that will revolutionize retail experiences to drive significant value for the business.
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