Catalog management is increasingly making or breaking companies involved in e-commerce—no matter what their specific needs are, said Charley Rich, VP-field marketing for software provider InterWorld Corp., New York. And InterWorld’s customers, such as Ann Taylor Retail Inc., MSC Industrial Supply Co. and Verizon Communications Inc., all have recognized catalog management as a key requirement for their e-commerce platforms, he said.
"Catalogs that make it easy for a company to change over time, or adapt to business needs are critical," Rich said. Consequently, catalog management vendors must also be able to adapt to accommodate a wide range of companies and requirements.
Here’s a look at how InterWorld took different approaches with its software to meet the needs of two very different clients, industrial manufacturing giant Crane Co. and printer and fax machine marketer Oki Data Americas Inc.Case study No. 1: Crane Supply Co.
Crane is about as old-school and industrial as a company can get, yet it—like thousands of other businesses—had recognized the need to develop an online catalog management system.
The 146-year-old conglomerate has subsidiaries involved in building everything from bath fixtures to vending machines. Twelve months ago, recognizing customers would eventually want to buy online and spotting weakness in its competitors’ Web strategy, the $1.75 billion Stamford, Conn.-based Crane gave one of its holdings—Crane Supply Co., Toronto—charter to develop a catalog management system with InterWorld as its software vendor.
Today, the system manages 20,000 products with 3,000 to 5,000 new products being added monthly. And the way Crane manages its catalog at the site econ.cranesupply.com is being used and reused as a template by other divisions within Crane.
Instituting a catalog management system might seem like a techie endeavor, but in fact it proved to be a challenge for management, sales and marketing, too, said Helene Zonana Cohen, e-commerce director for Crane Supply. "This project was the main focus for the last year and a half," she said. "Ultimately, it marked an external transformation of the organization, and required that people understood what it means to open a new sales channel."
That’s because Crane Supply, a distributor of pipes, valves, fittings and piping, had to start from scratch. A database of products had never before been constructed. Self-service was not in its vocabulary. The institutional knowledge of its sales force, as well as third-party catalog services, were all that was used to publicize products.
Labor from all facets of the operation was drawn in. Veteran sales executives were asked to map individual products to a newly developed master product list. And marketing executives developed sales and customer incentive programs to make sure sales executives steered clients to the site, and that clients purchased on the site. Crane budgeted a total of $1.1 million for Web design, software, IT consulting services and catalog management software, and expects a return on investment within three years, Zonana said.Case study No. 2: Oki Data Americas Inc.
Oki Data, Mount Laurel, N.J., began its Web presence in the mid-1990s as little more than an online brochure. A few years later, the printer and fax machine supplier decided it needed more. So the company began looking for providers who could help them put a transaction-capable catalog of close to 4,000 products on the Web.
In building an e-catalog, Craig Broadbent, manager of e-marketing for Oki Data, had to address possible conflicts within the company’s distribution channels. The company had never published a paper-based catalog marketed to end users. Instead, it had historically sold its wares through a two-tiered distribution system, typically selling the bulk of its products through wholesale distributors. In some cases, Oki Data would sell directly to a few large retailers, such as Office Depot Inc. or Staples Inc.
Therefore, key among Oki Data’s objectives was to get involved in a new channel by appealing directly to end users without alienating its distributors and resellers, Broadbent said. "It has never been our plan to replace those other channels but to incrementally add a new channel, understand it and play in that, add some additional revenue by doing so and get closer to our customers," he said.
Oki Data also wanted to be able to integrate its new Web site and software into its existing infrastructure, rather than starting from scratch. But Oki Data also wanted automation: At the time, the company was handling orders from their direct resellers the old-fashioned way, via fax and phone, which had to be manually re-keyed into their order system. Besides being time-consuming and error-prone, the system made it difficult to track orders and survey inventory.
Like most companies, Oki Data wanted the job done quickly. Implementation took a little more than four months to complete—very quick compared with some solutions that can take between a year and 18 months, said Mike Morini, exec VP-sales and marketing for InterWorld.
In March 1999, Oki Data introduced its business-to-consumer catalog with a few hundred product items; in December of that year it launched its b-to-b catalog. Morini estimates starting costs for Oki Data’s type of implementation to be $250,000-plus. Broadbent declined to give Oki Data’s specific costs for the project but estimated that 25% to 30% went toward software licensing, 40% went to development fees and the rest covered other expenses, such as hardware.
"Our original business plan had anticipated that by the beginning of the second full year  we would actually return our investment," Broadbent said. "We have already recouped that cost, and then some." Within the first year, Oki Data was able to eliminate three jobs within the order processing and customer support group. And throughout last year, the first full year of implementation, Oki Data experienced about a 30% per quarter increase in revenue.