The document discusses 5 ways that retail CEOs can increase corporate profits through strategic information management. It outlines initiatives to 1) speed time to market for new products, 2) reduce costly product returns, 3) optimize inaccurate inventory levels, 4) streamline the expensive supplier onboarding process, and 5) improve up-sell and cross-sell conversions. A strategic information management platform provides a single source of product truth across systems to enable these initiatives.

1. The Strategic Information Management Company ™
W H I T E P A P E R
5 Ways Retail CEOs Can
Increase Corporate Profits
in Today’s Economy
AUGUST 2011
RETAIL

2. 2
Retailers today face an intensely competitive marketplace with unprecedented challenges and opportunities. With the
emergence of a greater variety of retail channels, an abundance of product options and easy online price comparisons,
consumers now demand greater service and lower prices.
The ability to ensure that the right product is available at the right place and at the right time is absolutely critical. Merchants
that can react faster tend to come out on top.
Harnessing Operational Information
As retailers begin to operate 24/7 through a growing number of sales channels, their volume of strategic business information
rises exponentially in both size and complexity. In turn, increasing the difficulty to manage product, supplier and consumer
information successfully.
This influx of strategic information must be proactively managed as it flows across organizational channels. In fact, the ability
to leverage operational knowledge as a performance success tool is key to increasing business profitability, mitigating risks,
enhancing agility and enabling better decision making.
Unfortunately in most retail organizations, operational information is typically siloed. It resides and evolves independently in
multiple applications, point of sale solutions and spreadsheets where it cannot flow efficiently. An alarming number of critical
business decisions are based on information that is most often inaccurate or incomplete.
Traditional Efforts to Combat the Challenge
Many retailers are turning to their ERP system vendors hoping for a quick, cost effective solution to manage the increased
volume of information. However, these retailers are discovering that major ERP suite vendors lack the ability to manage every
business unit’s strategic information as it flows across internal and external channels.
In order to emerge as stronger competitors when the economy recovers, senior executives must take an immediate, direct
approach to solve their multichannel strategic information challenges. That’s what Stibo Systems, the Strategic Information
Management Company, is all about.
Strategic Information Management
Strategic management information is not just a technology, it’s an organized philosophy and process. This new strategy
focuses on using a full-cycle approach to integrating business units, vendors, product information and other critical
informational assets into one repository.
Strategic information management does not represent an incremental change in function or process. Instead, it is a much
more comprehensive and an integrated approach to managing operational information as it flows through the business.
As the retail environment becomes increasingly challenging, a number of leading retailers are adopting strategic information
management technology and processes to drive the following key initiatives:
#1: Speeding time to market
#2: Reducing product returns
#3: Optimizing inventory levels
#4: Streamlining the on-boarding process
#5: Improving up-sell/cross-sell conversions
This white paper provides an executive perspective on how retail CEOs can increase corporate profitability through these five
strategic information management enabled efforts.

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Initiative #1: Speeding Time to Market
Reducing the time it takes to introduce new products has become a top priority for retail executives. By speeding time
to market, retailers can generate revenue earlier, increase margins and establish a sustainable competitive advantage. In
fact, studies have shown that high-performing companies on average generate 61 percent of their sales from successful
introductions of new products and services. Furthermore, companies that experience an 80 percent revenue growth from new
products typically double their market capitalization in a five-year period.i
The process of developing and introducing a new product can be inherently complex. Even the simplest products today can
have hundreds of attributes, all derived from multiple systems that reside both within and outside the organization. Introducing
a new product also requires the coordinated efforts of dozens of individuals within the company—not to mention multiple,
geographically dispersed external partners and suppliers.
A strategic information management platform enables retailers to streamline the process of gathering all product data from its
suppliers and partners. It cleanses and manages that data centrally, allows for branding and versioning of the information, and
feeds all business systems needed to consume that data.
As a result, the business can share more accurate information with its websites, eCommerce applications, printed media,
kiosks, POS systems, sales training materials, customer service applications, and other channels with more speed, reliability and
security. This can ensure that all sales channels have the information they need to educate customers and sell products faster
and a higher return.
Initiative #2: Reducing Product Returns
Product returns represent one of the most overlooked and significant causes for profit and margin reductions. In fact, product
returns involve so many steps and have such a far-reaching impact on every area of the business that their total annual costs
now affect 2 to 3 percent of an average retailer’s sales.ii And this doesn’t begin to address the significant impact on customer
loyalty. Recent studies have shown that 25 percent of consumers who return a product are unlikely to buy that brand again.iii
A number of recent studies, including an analysis by Accenture, discovered that most returned products do not have a defect.
In many conclusions reached, a product was returned due to false or insufficient product information. These inconsistencies
lead to consumer dissatisfaction and frustration.
Having a strategic information management process in place can reduce product returns by managing correct product
information across the supply chain.
Initiative #3: Optimizing Inventory Levels
Inventory accuracy is a staggering problem that leads to costly challenges for retailers. Studies have found that retailers
generally have accurate inventory information on only 35 percent of their items. Research has shown that 47 percent of out-of-
stock items with poor forecasts, resulting in inconsistent, inaccurate and incomplete data in supply chain, merchandising and
inventory systems.
A strategic information management platform allows retailers to centrally manage all of its product operational information.
The platform automatically feeds each consuming system, sales channel and business process individually. This approach
provides retailers with a single, consistent view of product information without forcing business units and suppliers to use the
same system or data format.
Having optimized inventory levels starts with having one version of the truth across all divisions, departments and channels.
Only then can the merchant ensure it has the right products, at the right levels and in the best locations.

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Initiative #4: Streamlining the On-Boarding Process
There are two common obstacles retailers face when delivering products to market. First is acquiring the product information
from suppliers and ensuring such information is correct. The second is supplying said information across multiple channels to
support selling of the product.
This on-boarding process is often cumbersome, error prone and time consuming. This results in manual involvement to
correct the information thus creating a costly and vicious cycle.
AMR Research recently concluded that companies could potentially reduce their supplier management costs by nearly 85
percent just by improving information visibility with suppliers. For a merchant managing hundreds of vendors and tens of
thousands of products, the efficiency costs alone are staggering.
In fact, after implementing a strategic information management solution, a major global retailer was able to reduce its
average on-boarding costs from more than $200 per item to less than $3 per item. Considering the tens of thousands of SKUs
this retailer introduces every year, this cost savings alone can have a significant impact on business performance and
competitive advantage.
Initiative #5: Improving Up-Sell and Cross-Sell Conversions
By taking a holistic, full-cycle approach to managing product information, retailers have an opportunity to improve cross-sell
and up-sell conversions. When the business has greater operational control over product information then sales and customer
service representatives have more timely and relevant information at the point of sale. Online channels can also provide
more relevant product links, recommend complementary or similar products, and improve product categorization for easier
browsing and increased sales conversions.
Additionally, this level of information flow and control helps support an improved cross-channel experience. Customers
today want to use their smart phones to check local inventory. They want to research and compare products online, and
receive detailed and accurate answers about an item they saw in the company’s latest catalog or website before making
a trip to the store.
If product information is not being strategically managed as it flows through the business, the retailer cannot possibly meet
these growing customer expectations.
Operational Knowledge as a Performance Improvement Tool
Over the last two decades, businesses have worked feverishly to optimize their physical supply chains. Virtually every discussion
about improving the supply chain has been centered around the flow of products from raw materials to consumption.
However, a growing number of companies are now taking a similar interest in optimizing the flow and management of the
information related to these products. In a highly competitive global economy where information is now a core enabler, using
business operational knowledge as a performance success tool is paramount.
Retailers that have integrated this information into one management platform are completely changing the playing field in
their respective industry. They’re improving profitability while breathing new life into businesses caught in a downward spiral of
reduced discretionary spending, higher customer expectations and tougher market competition.

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i
“The Perfect Product Launch: Innovation Drives Growth in the Consumer Products Industry.” IBM Institute for Business Value. 2006.
ii
“Big Trouble With No Trouble Found: How Consumer Electronic Firms Confront the High Costs of Customer Returns.” Accenture. 2008.
iii
Ibid.
About Stibo Systems Stibo Systems is the worldwide market leader in strategic information management technology and solutions
that enable organizations to manage their strategic information on a global scale through an integrated process. Stibo’s STEP platform
boasts a flexible architecture that combines master data management (MDM) with product information management (PIM), creating a single
trusted source of strategic information for the entire enterprise. Stibo’s global customers include GE, Sears, Siemens, Target and Thule. Stibo
Systems is a subsidiary of the privately held Stibo A/S group, originally founded in 1794 with corporate headquarters in Aarhus, Denmark.
For more information, visit www.stibosystems.com or email us at success@stibo.com
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