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May 28, 2001
Laying it all online
Expected to grow to a $4 billion industry in 2004, the online
catalog business is booming, offering marketers new ways to showcase
their products, cut costs and
by John Evan
Frook
Catalog management, a marketing department’s role since the
earliest days of Sears, Roebuck and Co. and Montgomery Ward, has
come a long way from pasting up a printer’s sample and taking it to
the press. New systems that create digital product descriptions and
host interactive catalogs on the Web can prompt dynamic changes in
business processes. Integrated correctly, these systems can deliver
several distinct competitive advantages such as reducing costs,
improving product displays and generating more sales leads. Yet
companies still frequently implement catalog management software
separate from other Web systems. Doing that isolates catalog
information from their overall strategic Internet efforts, say
corporate experts and technology analysts, who warn that forgoing
system integration for short-term reasons could be a costly,
long-term mistake.
Online catalog management is already big business.
The market for catalog management software and system implementation
is expected to grow from $1.89 billion in 2000 to $4.09 billion in
2004, according to The Yankee Group. Market leaders include IBM
Corp., Cardonet Inc., Congex Ltd., Entigo Corp., Haht Commerce Inc.,
i-Mark Inc., Inforonics Inc., InterWorld Corp., Requisite Technology
Inc. and SoftQuad Software Ltd.
"If you do not have your products online, businesses aren’t going
to be able to find you,"said Gene Alvarez, program director of
e-business strategies for Meta Group Inc., Stamford, Conn. In the
age of the e-marketing boom, he said, catalog management is as
strategic as unlocking the front door to the office each business
day. "E-procurement systems are moving from indirect products to
direct materials," Alvarez said. "As that happens, businesses need
catalog management systems even more."
Defining catalog management
So, what exactly is catalog management software? Basically, it’s
a platform designed to draw together all of a corporation’s product
information into a single repository.
Today, many b-to-b companies have product information stored in
print catalogs, disparate databases, multiple enterprise resource
planning systems or the institutional memory of its sales force.
Those silos of product information may have been OK when independent
parts of a business sold to vertical-industry cliques, but
e-commerce forces everyone to open up those processes, said John
Carini, senior manager, Deloitte Consulting, Austin.
Buyers are forcing the move to Internet catalog management,
Carini said. "Big companies are implementing Ariba, Commerce One or
i2 [Technologies] to enable electronic buying, and they’re saying
they want live, electronic product descriptions," he
said.
This doesn’t mean companies are completely
abandoning print catalogs, but with the ongoing postal rate hikes
and increasing Internet savvy of customers, online catalogs are
steadily supplanting them in importance.
Putting together an online catalog, however, is
neither easy nor cheap. It is not unusual for a company to invest
more than $1 million in a system, and companies should plan an
ongoing budget of more than $600,000 annually to run it, said Darren
Bien, commerce infrastructure analyst for Jupiter Media Metrix Inc.
Creating a system often
includes services such as providing consultants to identify problem
patches and data entry clerks to convert paper-based product
descriptions to electronic formats.
Ideally, catalog software should be used in tandem with content
management systems, which are also rising in importance and
popularity. Content management systems are designed to make it
possible to publish to the corporate Web site with a minimal amount
of Webmaster or IT support. Catalog management software will become
a central part of content management systems, but that full-scale
integration won’t occur until 2002 or 2003, Alvarez said. Until that
time, he said, the separate products must be synchronized as best
they can.
"Catalog management is not a ‘bogey’ [or a losing proposition]
when compared to content management, but rather catalog management
is the atom for Web commerce that fits within a content management
system," Bien said. "Without a well-defined, well-structured, easily
searchable Web catalog, you can’t do commerce."
What’s driving adoption
Three key factors are driving adoption of catalog management:
Marketing and sales departments are using it to open new sales
channels, reach existing buyers’ Web purchasing systems and
reinforce distributor relationships.
GE Lighting Ltd., Surrey, England, is an example of an industrial
company that’s been tackling all three catalog management
strategies. It currently has separate Internet catalog management
systems for internal product information, extranet product
information and corporate purchasing. In June, GE Lighting will go
live with a new system powered by software from Entigo that aims to
provide enhanced services to its distributors, said Cameron Bird, GE
Lighting director of e-business.
Key to its new system is the ability to deliver product
information to distributors in a format that makes it easy for them
to automate orders, shipping status and other transactions, Bird
said. As a service, GE Lighting will adapt up to 30,000 of its
product codes to match distributor descriptions. "We’re offering our
distributors a one-stop shop for [adding] transactional services,"
he said. GE Lighting has already recouped about $250,000 annually
through reduced printing costs through its electronic catalogs, he
said.
Boosting buy-side
One mistake often made by companies is to think catalog
management is strictly a sell-side system. Savvy organizations are
using online catalogs to bolster buy-side operations.
For example, Philips International BV, Eindhoven, Netherlands, is
using a system from Poet Software to distribute about 150 supplier
contracts to 80,000 buyers worldwide. The software system
automatically collects catalog descriptions from suppliers and
converts them into a standard format for Philips’ buy-side
applications.
"We have a decentralized business, and on a local level not every
[business] site knows exactly what they are buying," said Gaspar
Mondejar, project manager of e-procurement for Philips’ corporate
purchasing and forwarding department. "We suspect centralized buying
catalogs will help us make better decisions."
Black & Decker Corp.’s Emhart Teknologies, New
Haven, Conn., has implemented a catalog management platform that is
designed to never reach a dead end. Using software developed by
i-Mark, the e-catalog conducts eight different types of search
against the catalog in order to return results. More than 70,000
visitors have accessed it in a little over a year, generating some
55,000 leads.
A single Web platform for its 10,000 products has allowed Emhart
to deploy value-added services to its customers."We want to be with
the customer from concept, design, installation to after-sales
service, and catalog management is immensely important in that
process," said Darren Byrne, Emhart’s director of e-business.
top
Copyright May 2001, Crain Communications, Inc.
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