IDC Expert Insights - Jordan Jewell and Tobias Wrobel on trends and developments in this year's IDC PIM for Commerce MarketScape

In this interview, Tobias Wrobel from parsionate spoke with Jordan Jewell, Research Director at IDC, to explore the current changes affecting the PIM market including trends from the latest research. Discover how IDC analyzes the market, how the different categories of the IDC MarketScape are to be understood and which developments and trends are currently driving companies in the market as well as the coming trends expected by Jordan Jewell.

Tobias Wrobel: The IDC MarketScape is published every 18 to 24 months and reflects the relevant vendors in the respective topic focus. IDC distinguishes between leaders, major players, contenders, and participants. How do the companies in these categories differ?

Jordan Jewell: There is no simple answer to this question because there isn't a one-size-fits-all PIM application and thus there isn't a single area of functionality or vendor characteristic that leads to one provider being designated a leader, major player, contender, or participant. Instead, when approaching MarketScapes I focus heavily on 1) defining the specific market I am evaluating and 2) putting myself in the shoes of customers who are making vendor selection decisions.

From our discussions with customers (over 120 conversations in 2020 and over 80 so far in 2021), and partners such as parsionate, we create scoring criteria and weightings to score technology vendors on their capabilities (current) and strategy (future). These scoring criteria and weightings are designed to represent an average prospect's RFP process.

What this amounts to is that a vendor who is named a "leader" in a MarketScape report is, on average, a strong option for a technology selection shortlist. "On average" is a very important distinction here, because all of the vendors in the report offer viable products that are great fits for some customer organizations.

Tobias Wrobel: First of all, this helps a lot to better understand how to evaluate the individual categories and the companies listed in them. Let's look at the current year. Which characteristics and interesting developments stand out when looking at the providers of the MarketScape in the last years, compared to this year?

Jordan Jewell: For starters, I want to explain the idea behind IDC's "PIM for Commerce" MarketScape. As IDC's digital commerce analyst, I look at the technology and trends shaping digital commerce now and in the future. Prior to launching IDC's inaugural PIM for Commerce MarketScape in 2019, I had had many discussions with retailers, manufacturers, brands, and distributors about PIM, and those conversations were evolving over the years.

PIM applications have been around for decades and historically they were closely associated with Master Data Management (MDM) systems. PIMs were traditionally treated as systems of record, considered back-office applications, and predominantly used by the IT department. However, as a larger and larger share of all B2C and B2B transactions occur online, more emphasis has been placed on the accuracy of product information and content on eCommerce channels, leading to increased scrutiny on PIM applications. Increasingly, PIM applications are viewed as systems that enable digital commerce. For IDC's PIM for Commerce MarketScape, we try to reflect these modern requirements for PIMs, and put a lot of weight in areas like having agile architectures, integrating with an ecosystem of digital commerce technologies, providing syndication capabilities, and support for a variety of content types.

With this in mind, the most interesting developments in this year's 'PIM for commerce' evaluation were:

1. Overall, customers I interviewed were very happy with their vendor's PIM applications and the average rating was higher than any MarketScape I've conducted before (and I have done over 15). I believe this shows that this market is very competitive.
2. Cloud and application architectures are more important than ever in PIM. We rewarded vendors with cloud native, API-first, and modular architectures, as this is what future customers need.
3. PIM applications are increasingly expected to assist organizations make smarter decisions with where and how they merchandize their products. Thus, customers are looking for PIM applications with bi-directional syndication capabilities, digital shelf analytics, and AI to help optimize product information.

Tobias Wrobel: It is good to hear that customers are satisfied with the development of the PIM market, which is reflected by the rating in your interviews. However, your statement also makes very clear that the PIM market is constantly on the move, as evidenced by developments such as cloud native, API-first and modular architectures, that are on the rise. 
What trends would you say are the highlights of this year's report?

Jordan Jewell: The primary trends we are seeing shaping the PIM market include:

• Digital commerce acceleration: COVID-19 accelerated the adoption of digital commerce by about three years, as B2C and B2B buyers were forced to make purchases online and new habits were formed. In response, we saw rapid growth in investments of digital commerce platforms, followed by adjacent application areas like PIM.
• Channel and touchpoint explosion: There are now more channels (e.g., marketplaces, retailer sites, social media) and touchpoints (e.g. devices) that customers interact with on a regular basis than ever before. What's more, we only expect the number of channels and touchpoints to increase in the coming years. This has made PIM systems more valuable, as they are being relied upon to act as an internal source of truth but also externalize product data and content for every channel and touchpoint where a merchant's customers are. 
• SaaS and cloud: This feels like a pretty obvious one. Buyers increasingly want PIM applications in the cloud, with multi-tenant SaaS often considered the gold standard.
• Personalization: B2C an B2B buyers expect every commerce experience they are served to be tailored to their specific profile and preferences. This means that PIM applications need to help facilitate more personalized product and commerce experiences by acting in conjunction with MDM, CDP, and/or personalization applications.

Tobias Wrobel: These trends make it clear that the development around Customer Experience as well dominates the development on the PIM market. Personalization appears to me as one of the main catalysts for all these trends. This requirement makes it necessary to have all kinds of data available flexibly and anywhere, to make it accessible at the point of action in order to be able to intelligently combine customer and product data to drive business growth and revenue while ensuring the customer experience.  
Let's look into the crystal ball a little bit. Where will the PIM market go from here? What will be the most important topics in the next 3 years?

Jordan Jewell: I expect all the trends I have described above – such as channel explosion and a shift towards customer experience - to continue in the coming years. To add finer points, I expect the following:

• Syndication and digital shelf analytics to rise in importance. These functional areas seem to have become buzzwords in the PIM space, but for good reason.
• Adoption among more merchants in the midmarket and in APAC. Right now, PIMs have relatively small adoption, compared to other technology applications such as marketing automation or digital commerce platforms. I think up to this point, PIM software providers have only sought out the most complex customer use cases and have charged relatively high price tags. I expect there will be more efforts in the future to sell into the midmarket, as well as in APAC, where there is very little market penetration for PIM systems right now.
• Artificial intelligence will actually drive value in PIM. Right now, AI isn't helping customers complete tasks very much within their PIM applications. However, customers I spoke to were overwhelmingly interested in gaining access to embedded AI capabilities in the product that would make their lives easier.
• More focus on sustainability. As a single source of truth for product information, the PIM has an essential role in enabling brands to provide more transparency into areas such as the materials used to make products and the carbon footprints of those products. Future customers will care more about these factors and make buying decisions based on which sellers expose that information.

Tobias Wrobel: Indeed, I agree with you on all points. Above all, AI will become an important accelerator in Data & Analytics. However, it is absolutely necessary to have the optimal data foundation for using AI. Otherwise, it's "garbage in, garbage out".
Thank you, Jordan, for taking the time to answer the questions so extensively. As a final note, I have one more question. If you were asked to give advice to companies on the path to better product information management when selecting their suppliers/vendors. What would that advice be?

Jordan Jewell: My #1 advice is to focus on your own area(s) of differentiation and select a vendor that will help you achieve it. While we assign leader, major player, contender, and participant names to vendors in the IDC MarketScape, that doesn't mean that a leader is always a better fit for an organization than a participant. In fact, all of the vendors shown in the report have strengths and weaknesses and merchants looking for a PIM should develop their own decision criteria based on which PIM provider will help them achieve their long-term goals. Examples include finding a PIM provider that supports for your specific industry, has a partner network in your region, has a technology architecture that aligns with your talent base, and/or is aligned with your organization culturally.

At parsionate, we guide customers on their journey to evaluate the most suitable PIM vendor for their requirements. To do this, we include evaluations such as those from IDC. If you are currently in the same situation, our system selection offer will help you to make the right decision.

IDC

Jordan Jewell
Research Director, Digital Commerce and Enterprise Applications

Jordan Jewell is a Research Director for IDC's Enterprise Applications and Digital Commerce team and leads IDC's Digital Commerce research practice. In this role, he leads research initiatives addressing both B2B and B2C digital commerce platforms, product information management and syndication, digital marketplaces, order management software, and adjacent technologies that facilitate online commerce. Jordan joined IDC in 2015.

Parsionate

Tobias Wrobel
Marketing Manager

After several years in Data & Analytics software sales, Tobias Wrobel has changed his focus and joined the marketing team at parsionate in 2018. Tobias is the connecting link between sales and marketing and is focused on providing comprehensible and value-added communication in the field of Data & Analytics as well as being responsible for giving voice to customer experiences. With his passion for Data & Analytics trends and developments in the market and within companies, he brings a wealth of knowledge and experience from working with customers and their experiences.