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The Importance Of E-Commerce Ready SKUs

BY GEORGE COHEN

Before the advent of electronic commerce, producing a hard copy product catalog was relatively straightforward. But with the intricacies inherent in transferring content to the Web, manufacturers are having a difficult time preparing their product catalogs for e-commerce.

For starters, there are format issues. Less than 15 percent of all manufacturer part content is in a usable, searchable, and transactive format. In order to support electronic searches, stock keeping units (SKUs) need to be rich with data, fully accessible to the buyer and standardized in format.

E-commerce-ready SKUs should include a complete set of attributes, containing detailed information such as color, inner diameter, horsepower, material and grit. In addition, they should incorporate short descriptions of each item and an associated hierarchy that defines the "family" or product category to which the SKU belongs.

Many manufacturers underestimate their e-commerce needs because they do not consider the differences between electronic and paper catalogs. Many companies simply type in their paper catalog or publish the catalog electronically as a PDF file. But neither of these quick techniques considers the nature of electronic catalog presentation and search requirements. As a result, catalog content development is the single largest project delay in e-procurement projects, according to AMR Research.

An e-commerce-ready electronic catalog should capture and integrate elements from three main sources: paper catalogs, where the most amount of product information exists in one location; electronic information repositories, where the most current pricing, order history and SKU data often reside; and people -- product managers, marketing and sales managers and engineers -- who have application knowledge, case histories, diagnostics results and other product knowledge.

Judging the quality of an Internet SKU database is a simple exercise: search for a product. If distributors or end-users can't quickly locate products to fill their needs, then they won't make business transactions.

Buyers perform on average more than three mouse clicks to find an item. So make it easy for them to make the purchase. For example, if they accidentally misspell a search term, the search function should enable them to obtain the correct answer. If they can cross-reference the defining attributes of an obsolete product with alternative products, they'll likely remain customers.

The problem is that SKU data as it exists today is not nearly robust enough to support these successful scenarios. A search for "motors" at a leading industrial supply distributor's Web site yielded 7,761 results, with no logical or efficient way to filter the results. One or two product search failures are all it takes to permanently repel a prospective buyer from a manufacturer's site.

When preparing SKUs for e-commerce, manufacturers should ensure that data exhibits the following three qualities:

  • It is searchable and eliminates erroneous searches;
  • It is informative: the buyer has all of the information necessary to distinguish the products, validate their application and purchase.
  • It is extensible: information can be distributed to "all" channel types -- marketplaces and distributors. Manufacturers that ignore these three features are likely to be ignored by purchasers, who are becoming less tolerant of wasted time. Forward-looking manufacturing firms have already made significant inroads into electronic catalog creation, and e-commerce-ready catalogs are quickly evolving from being a competitive differentiator to a necessity for survival.

    --George Cohen is president of George Cohen Communications of Boston and can be reached at 617-325-0011 or via e-mail at george@gcc.nu.