Cloud-Based PIM: A Silver Lining for Grocery Retailers

Rapid shifts in the competitive landscape, consumer expectations, supply chains, and regulations have made grocery retailers more dependent than ever on data to adapt and thrive.

Among the most important data for grocers is product data—information, content, and assets concerning the actual products they sell. From the nutritional facts of a pineapple to the dimensions of a box of cereal, health claims of a tub of yogurt, or supply chain path of a frozen pizza, product information complex, diverse and constantly changing.

To keep up with these data needs, retailers increasingly rely on Product Information Management (PIM) technology.

Why Grocery Retailers Need Product Information Management

The benefits of PIM are well documented for organizations of all kinds, from manufacturers and brands to marketplaces and retailers.

But the unique challenges grocery stores and supermarkets face make PIM especially useful for this vertical. Over the last few years, several major trends have emerged that made accurate, comprehensive product information critical to grocers and brought the need for PIM into focus:

• More digital customers: While online shopping for grocery customers was not unknown before the pandemic, there was an explosion in this channel in recent years. Online grocery stores which were flat online jumped 103% year-over-year to $73.7 billion in 2020. Many retailers in this space were behind in eCommerce adoption, and stores had to get a crash course on selling groceries digitally. They had to focus on improving the customers’ digital shopping experience, which heavily relies on the quality of the product information.
• Supply chain issues: In addition to delays and increase in prices, the disruptions to the global supply chain also caused numerous out-of-stock issues for grocers. To prevent customers from abandoning their carts or losing them entirely, grocery stores had to get smarter about leveraging their in-stock items by suggesting substitutions when possible. A well-managed product information database is the key to maintaining customer satisfaction in the face of unexpected shortages.
• More discerning shoppers: Consumers are giving the products they buy more scrutiny than ever—especially the ones they’re eating. They’re expecting greater transparency for where their food comes from and what’s in it. Demand for products that fit certain health and lifestyle standards (vegan, free trade, gluten free, etc.) is spiking; for instance, half of US shoppers now report wellness as a priority (up from 42% in 2020). Combined with mounting regulatory standards on food labelling and traceability, there’s a lot of pressure on grocery brands to manage and provide accurate, up-to-date information for all their products.
• Inflation: Starting in 2022 there was an acceleration in the inflation rate, putting pressure on grocery chains from two sides. They saw an increase in their costs but also saw a drop in consumer spending due to high prices. Staying profitable in times like this means staying lean, finding opportunities to improve efficiency, and identifying problem points that eroded margins. In all these missions, having full vision and mastery of your catalog is essential.

Weighing PIM Implementation Options

Conventionally, many PIM solutions were built or delivered ‘on-premise,’ housed within the proprietary servers of the business using them. At the time this made sense; this solution was often easier to make secure, it granted the business greater control over configuration, and it made direct access to the internal PIM fast and easy. But on-premise PIMs come with challenges that grow over time: they require lots of hands IT resources, they have outdated UI and functionality, they don’t integrate well with other modern systems.

Over time, cloud-based PIMs have become increasingly popular, especially as security and connectivity challenges have become functionally solved. These are PIM solutions that run on the servers of a PIM vendor on behalf of the user party. Cloud-based PIMs can be constantly updated and managed by the vendor, reducing the workload on users and keeping the technology at the cutting edge with UX and functionality improvements.

Businesses have widely wised up to the value of cloud technologies.

Traditional PIM vendors have been slow to leverage the full potential of cloud technologies. The slow adoption has exposed their customers to the growing pains of the vendor. Even the ones who offered a cloud-based solution, have continued to hedge their bet by continuing to offer on-prem alternatives. This results in conflicting priorities and a diversion of resources away from what benefits the end user the most.

The Advantages of Cloud-Based PIM for Grocery Retailers

The right PIM solution could fundamentally transform your business’s ability to adapt and grow in the real-time economy. With the stakes so high, it’s important to consider all the most important factor:

• Expandability: The scale and scope of data needs for a grocery company can change rapidly. Cloud-based solutions allow businesses to seamlessly and rapidly adjust their storage capacity to accommodate varying data volumes, whether it’s a sudden spike in demand or a gradual increase over time. With the cloud’s elastic and on-demand resources, organizations can efficiently scale their data storage up or down, ensuring cost-effectiveness and optimal performance while adapting to evolving data needs.
• Service and maintenance: Grocery retailers are good at delivering a great selection of quality products to their customers, but their strengths don’t always lie in more technical functions. PIM vendors with cloud-based solutions allow users to focus on their core competencies: Cloud providers handle the underlying infrastructure maintenance, security, and updates, freeing businesses from the burden of managing complex IT tasks and allowing them to concentrate on their core business activities, leading to increased productivity and innovation.
• Financial flexibility: Cloud computing allows businesses to shift from large upfront capital expenditures on hardware and infrastructure to manageable operational expenses based on actual usage, promoting financial flexibility and scalability for organizations of all sizes. Also, the pay-as-you-go model of cloud computing enables businesses to optimize costs by provisioning resources only when needed, avoiding unnecessary expenditures, and ensuring better budget management.
• Greater computational resources: Cloud providers offer access to vast computational resources, enabling businesses to implement complex tasks like search algorithms, data analysis, and machine learning at a fraction of the cost and time compared to setting up on-premises infrastructure.
• More modern technologies: Cloud platforms continually update and expand their services, allowing businesses to leverage the latest technologies, tools, integrations and innovations to stay competitive and deliver cutting-edge solutions to their customers. This helps grocery brands stay ahead in the rapidly evolving digital landscape.

The Preferred PIM Solution for Grocery Stores 

In the ever-changing landscape of grocery retail, adopting cloud-based PIM technology is crucial for growth. The advantages of agility, scalability, flexibility, and collaboration offered by a cloud-native PIM solution make it the ideal choice for grocery retailers seeking to thrive in a fast-paced retail environment. 

With deep connections and partnerships across the global grocery ecosystem, Syndigo has long been a trusted partner for the grocery industry. Grocery retailers in particular count on Syndigo’s vast supplier network to deliver the best available product information, and our cloud-native PIM solution to help them store, manage and harness that vast data. 

For instance, Denner is the third largest food retailer in Switzerland and part of the Migros  Genossenschafts Bund. It is currently running a massive digitization program which has at its core, the goal of mastering their product data, and the establishment of a 360° view of the product data for effective and flexible digitization of all processes from item listing to customer experience. Read here about how Denner leveraged the power of Syndigo’s solution to make their vision come true.