November 7, 2012

SKU Attribution Initiative – AD Today

­Enriched catalog content is on the way. Several Affiliates requested that AD and supplyFORCE form an alliance with IDEA (Industry Data Exchange Association). This alliance is encouraging Manufacturers to fully populate their product information and supply it to the IDEA Data Synchronization Platform (lDW) within an accelerated timeframe. AD, supplyFORCE and IDEA have developed a joint Initiative to accelerate the development of enriched catalog content, as well as generate the financial resources needed to fully participate in such a project.

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John Ludlam, Executive Vi­ce President of supplyFORCE (King of Prussia, PA) said the concept sprung up in conversation. "Less than two years ago, at a dinner meeting with IDEA and about 10 AD Members, discussion emerged about product content for web-based catalogues," he said. "The determination was that gathering and supplying content was costly for the Affiliates and that full-time staff was needed to build catalog content. We discovered we were all building the same content for the same reasons and that it has been IDEA’s goal for years to build content, but that they were having issues getting traction. Larry Stern, President of Standard Electric Supply Co., John Burke, President/COO of Kirby Risk Electrical Supply, and Bob Gaylord, President/CEO of IDEA discussed the Initiative and then talked at the next AD and supplyFORCE meetings to gauge interest."

A Real Need for Content

Ludlam said, "After listening to many Affiliates, it was agreed that there was a real need for this and that AD should be involved in getting this done. With input from David Oldfather (AD President, Electrical Divisions) and Mike Wentz (IDEA National Sales Manager) we came up with a plan to use AD’s leverage in the marketplace, supplyFORCE’s core knowledge and IDEA’s infrastructure to ensure content."

The roles were well-defined. AD’s role is Vendor Communication and to instruct Suppliers as to why it is necessary, why they are asking them for help to get this Initiative accomplished, to promote Vendor responses and to help convince them to jump on board. IDEA provides the infrastructure, where the data is housed, promotes knowledge in the industry and helps Supplier CEOs understand where their companies are in this issue as many Vendor chiefs thought they already did supply all the necessary information, but that wasn’t the case. IDEA helps communicate at the CEO level to ensure that it gets done. supplyFORCE’s role is expanding the existing web catalog and providing experience in building the content. Partnered with India-based Unilog, a software and content provider, supplyFORCE maintains project management.

Pam Erickson, Vice President of Marketing for Affiliated Distributors, said, "AD is spearheading this program to provide solutions and ongoing viability for a long-standing issue that has put Independent Distributors at a disadvantage. Without comprehensive, clean SKU-level data needed for online searches and a tie-in to ERP systems, Independent Distributors cannot take full advantage of eCommerce opportunities and successfully compete against the national chains. By partnering with IDEA, AD Affiliates and Suppliers both win. This opportunity for low-cost attributed data completion gives Suppliers the opportunity to provide their customers with clean data for electronic catalogs and website storefronts. A Steering Committee of AD Affiliates created the program’s structure including the financial component and tracking of Supplier SKU attribution completion through ADHQ.com. Suppliers can opt to attribute their own data, pay a small fee for AD- exclusive attributed data or opt to pay for an industry-all attributed data structure. This fee-based attribution is offered at a cost significantly lower than the industry average."

Larry Stern, President of Standard Electric Supply Co. (Milwaukee, WI) said, "For years, the industry has had a desire to obtain enriched data from Manufacturers that includes long descriptions of the products, images and spec sheets that are used for Distributor marketing purposes and for Distributors’ websites – storefronts where customers can purchase online. Many Manufacturers have made progress in this information supply and sharing area, some have made none and now, with AD involvement, we believe we will get the rest of the information in an expedited time frame. It was crucial that there were resources and tools available to make this work and the AD Initiative helps with that." The system works by having a spokesperson from the Group contacting the Manufacturer for dedicated information.

Ludlam added," supplyFORCE will be working with IDEA to track the progress of Vendors and to provide the necessary reporting so that both the founding Members and other interested parties can tell how each of their Suppliers is responding. Also, we will be responsible for ongoing maintenance of content that is created specifically for this program and is the exclusive property of the Members."

Win-Win Scenario

Ludlum summed up and said, "With Affiliates and Suppliers on board … it is a win- win for Suppliers and Affiliates. The benefit to Affiliates is that it enables them to have a very competitive web catalog offering in the marketplace and where marketplace is mobbing. Suppliers benefit by being able to sell their products in this new space, have control over their differentiation and protect against unauthorized channels of disseminating information, which will also increase their Independent distribution."

Ludlum said, "Both Suppliers and Distributors need to understand how important content is today and in the future of marketing and sales of industrial products … Content is king … the future of the industry is internet shopping."­

Wes Smith, President of Mayer Electric Supply Company (Birmingham, AU said the industry needs the attributed data and the process Meyer used to this point has been only partially successful. He said, "We have been a leader in our industry and invested some big dollars, but now we can use this electronic catalog and internet order system for our customers."

Stern said, "The need for enriched data has been a need in the past. We Independent Distributors have asked for information, but we had no template for Suppliers to provide us with it and no definition of what we wanted."

Bob Shapiro, President of Franklin Empire Inc. (Montreal, Quebec, Canada) said his company’s involvement came from a customer’s urging. Shapiro said, "A major customer has been pressuring us to maintain and expand an E-Catalog and without an effective search mechanism, it just doesn’t work. Attributed Data enables that search and it is impossible to do it on our own. We will use the data both as an internal search tool as well as a customer search tool."

Founded in 1998, Industry Data Exchange Association or IDEA (Arlington, VA) is the official standards creating and setting body for the electrical industry. Mike Wentz, IDEA’s National Sales Manager said, "There is a tremendous synergy between AD and IDEA in that many of the long – time subscribers and supporters of the Industry Data Warehouse (lDW) are AD Members. AD has an incredible track record for creating a marketing advantage for their Independent Affiliates. IDEA believed that AD possessed the collective buying power and vision to make a difference in the way things are done. supplyFORCE as an extension of AD Affiliates also had a need for enriched content that we at IDEA felt we could support. The Joint Initiative was a logical approach to eliminate duplication of effort and provided a unified voice to industry Suppliers. AD’s support of the program makes sense for their Affiliates and will provide a compelling competitive advantage based on industry approved standards. AD is taking a leadership role in the industry by assisting Manufacturers in their effort to enrich their product information so that the industry as whole will benefit from lower cost and increased profitability."

New Approach

The AD plan for a comprehensive gathering of SKU attributed data differs from past attempts within the industry in that it provides the largest collective Distributor buying power that has ever spoken directly to their Manufacturers about the required need for marketing enriched data, according to Wentz. "This is the same type of movement that drove the Consumer Packaged Goods industry to gain their Manufacturers’ support and compliance. This is a single voice that represents over $23B in buying power; it is a force that Manufacturers respond to. More and more Manufacturers are coming to realize that by providing their content to the lDW, they can streamline their operations and provide all Distributors with high-quality marketing support," he said.

Stern said, "The reasoning to bring Manufacturers on board is that if they say ‘yes,’ they can control what information will be in the system and they will still own their information. This helps differentiate their products from their competitors’ products. If they say ‘No,’ we will own all the information and give it to the public in whatever way we add it. This will become a very significant amount of enriched data that will appear on web storefronts."

­­Stephen Sokolow, Chairman of the Board-Leviton Manufacturing Co., Inc. applauds the effort. He said, "I think any initiative that captures the attention of Manufacturers to focus on the needs of their Distributor customers is very positive. I believe this will help Electrical Manufacturers get their data fully attributed with marketing content. At Leviton, we already are near 100% attributed for our stock products and are putting in place systems and processes to stay that way as new products are introduced to the marketplace. The more information we can provide our customers, the better for us, the better for them, and the better for the end customer … everybody wins. Not providing information is a recipe for failure."

Sokolow added, "The benefit to Affiliates is for a web storefront to have full descriptions of product. This differentiates what they carry from what a competitor carries and allows the customers to do a thorough search for the products they need online. Without this attribution, customers can’t readily find product through description. Without this attributed product information, a Supplier won’t sell as much product, so by not being part of this system it is a detriment to the Supplier."

Ludlam said, "We believe we will have 80% of the content from those Members we defined as key Members, available for download by interested Affiliates in short order. We are able now to download new content every week and by outsourcing to India, rather than by dividing the task among in-house Members, we can do it more effectively, more inexpensively and more quickly."