The Total Economic Impact™ Of Akeneo’s Product Information Management Solution

Margin Increase Due To Akeneo-Enabled Data Management And Quality Improvements

• Evidence and data.

  Interviewees’ organizations used Akeneo to realize the foundational value of PIM — the ability to manage product information that was reliable and complete. Organizations experienced an increase in direct sales because this improved data quality allowed end customers to gain a better understanding of products, increasing the likelihood of purchase, and because major retailers frequently prioritized their product displays based upon completeness scores. Key components included:

  • Easy data management through centrally stored and managed product information.

    Interviewees used Akeneo as a single source of the truth for product information and enrichment tailored to their customer needs while also minimizing errors, therefore improving customer satisfaction and increasing sales.

  • Support of all sales channels with rich information.

    The consumer electronics distributor’s director of digital and e-commerce marketing highlighted the ability to automatically share the centrally maintained product information with all the sales channels as a key benefit, noting, “We are supplying the appropriate information to all of our selling channels.” The specialty product distributor’s IT director described the importance of the quality and completeness improvements to meet varied channel requirements, stating: “Providing the right content is very important to selling, especially for the cases where some people are really specialized on what they are doing so they really need to know all the details before purchasing the items. Akeneo provided us with the processes to ensure that customers get the details that they need to convince them to purchase our products vs. others. We have seen an increase in competition in our space, but we have had an increase in positive customer feedback and in business since using Akeneo.”

  • Improved SEO and product performance on partner sites.

    Interviewees shared that their organizations improved their product completeness and quality rating, creating revenue improvements with improved product placements when activating their product information with major retailers and online ecommerce sites. The machinery and parts manufacturer’s VP of marketing, e-commerce, and customer experience said: “Our product information at a major online retailer was terrible. With Akeneo we organized our product data into up to 10 features that flow into the retailer’s site. We turned our product experience around to be an A+. Our order rate has gone up 37% and our revenue has gone up by over $10 million. This was not a possibility before. We have also seen significant sales increases at our major retailers.”

  • Capitalizing on cross-and upsell opportunities.

    Akeneo connected the customer with accessories and supplies directly associated with a product as well as other products that were commonly used with the viewed product, driving additional revenue.

• Modeling and assumptions.

  Based on the interviews, Forrester assumes the following for the composite organization:

  • Annual revenue starts at $500 million and grows 5% per year without Akeneo.
  • The use of Akeneo directly increases revenues by 1.5% in Year 1 with 0.25% annual increases due to improvements in product information quality and completeness in support of the buyer’s decision-making process.
  • The use of Akeneo increases revenues by 1.5% in Year 1 with 0.25% annual increases due to better product placement because of quality improvements, as well as expansion of cross-selling and upselling products, accessories, and supplies.
  • An operating margin of 7%.

• Risks.

  Risks that could impact the realization of this benefit include:

  • The current quality and completeness of product information, including the relationship between products to support cross-selling and upselling.
  • The current ability to provide product information to various sales channels.
  • The organization’s operating margin.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.7 million.

Operational Improvements Through Return Reduction Due To Quality And Decision Accuracy

• Evidence and data.

  In addition to additional revenue, the improvement in quality and completeness of product information also led to a significant reduction in product returns. Product returns rose in parallel with the rise of online sales. After implementing Akeneo, the interviewees’ organizations noted a reduction in returns, leading to a variety of benefits, including:

  • Return reduction due to products not meeting expectations.

    Interviewees noted that some returns can’t be avoided but they described the most significant reason for returns was that the product wasn’t what they expected from the online information provided.

  • Return reduction that led to operational savings due to associated shipping and handling costs.

    Interviewees said that all returns have some combination of shipping and handling cost that their organizations must pay. These costs were typically over $10 per product and could be over a thousand dollars for some items.

  • Return reduction that led to a reduction in item discounts and write-offs.

    Interviewees shared that reselling returned products requires discounting approximately 10% to 25% of the time. Discounting may be required due to repackaging changes, product damage, product obsolescence, or product seasonality.

• Modeling and assumptions.

  Based on the interviews, Forrester assumes the following for the composite organization:

  • Annual revenue starts at $500 million and grows 5% per year without Akeneo.
  • The product return rate is 10% as a percentage of revenue.
  • The average return rate improvement is 20%.
  • The shipping and handling cost of returns is 3% of revenue associated with the returned items.
  • The average discount percentage is 2% of revenue associated with the returned items.

• Risks.

  Risks that could impact the realization of this benefit include:

  • Historical return rates.
  • The current quality and completeness of product information.
  • The ability to provide clarity towards product acceptance through descriptions and images.
  • Shipping carrier arrangements.
  • Customer return policies.
  • Variability in the likelihood of discounting and discounting percentages due to specialty items, seasonality, packaging, etc.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV of $1.1 million.

Margin Increase Due To Revenue Improvement Associated With New Market Opportunities

• Evidence and data.

  Beyond process and operational improvements enabled through better product information management support, interviewees’ organizations were better equipped to take advantage of new market opportunities. Interviewees shared that they utilized Akeneo’s connectors to adjacent software, automation of key data management processes, flexible taxonomies, and translation capabilities to expand their market presence. Interviewees’ companies have seen revenue increases due to omnichannel expansion, global market expansion, the ability to target new customer types, and the ability to have their products understood by a broader audience. Key components include:

  • The ability to sell through more channels.

    Automation capabilities and APIs that support simplified integration with channels, allowed the interviewees’ organizations to sell through more channels, and quickly adapt as new opportunities emerge. The consumer electronics distributor’s director of digital and e-commerce marketing said, “I don’t even want to think about doing B2C without Akeneo.”

  • The ability to better target more customers.

    Interviewees spoke of their organizations’ ability to expand sales to less sophisticated consumers than they had historically because the information was provided to find their products in searches and understand the products well enough to make informed purchasing decisions. The VP marketing, e-commerce, and customer experience at the machinery and parts manufacturer said, “Our success in expanding our marketing and sales to direct customers sales benefited from our use of Akeneo.”

    Interviewees have utilized Akeneo’s flexible support of various product categories to create specific taxonomies to target both existing customers and new. During the pandemic, interviewees spoke of adjustments that supported consumers that had to shift from in-store viewings of products to online viewings. Others expanded sales to the general population of pandemic-related products that historically sold only to hospitals, laboratories, and facilities management facilities

    Interviewees also used Akeneo’s translation capability to expand their organizations’ geographic selling footprint by supporting multiple languages. The consumer electronics distributor’s director of digital and e-commerce marketing shared that, utilizing Akeneo’s translation capability, they have expanded from North America to three additional continents.

• Modeling and assumptions.

  Based on the interviews, Forrester assumes the following for the composite organization:

  • Annual revenue starts at $500 million and grows 5% per year without Akeneo.
  • The use of Akeneo directly increases revenues by 1.5% in Year 1 with 0.25% annual increases due to improvements in product information quality and completeness in support of the buyer’s decision-making process.
  • An operating margin of 7%.

• Risks.

  Risks that could impact the realization of this benefit include:

  • The current omnichannel presence for the organization.
  • The ability to expand product sales to other countries.
  • The appropriateness for selling in additional sales channels based upon corporate strategy and product types.
  • The opportunities for utilizing product categories to reach new customers.
  • The organization’s operating margin.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $1.3 million.

Margin Increase Due To Increased Time-To-Market And Productivities

• Evidence and data.

  Interviewees spoke of Akeneo’s numerous roles in driving revenue through time-to-market (TTM) improvements, labor productivities, and the combination thereof. First, adoption of Akeneo’s workflows shortened the time to release new products or provide product updates to distributors and online selling sites. With less time spent on low-value tasks, interviewees also noted that the productivity gains for product managers translated to them being able to take on more high-value work, including developing new products. Interviewees noted that:

  • Manufacturers saw an expansion of products sold and new product adoption due to fast, complete updates.

    The two interviewees in manufacturing shared that Akeneo-related product information workflow improvements led to a TTM improvement. This, combined with Akeneo-related product information improvements, made their sellers and resellers sell more of their products. The machinery and parts manufacturer’s VP marketing, e-commerce, and customer experience shared: “We now provide our largest distributors with updated data daily and the same timing for a distributor portal for our other 500 distributors. The quality, thoroughness, and timeliness of product data has led to business growth due to distributors expanding to more products and adopting new products sooner.”

  • Distributors beat competitors to market with early, accurate product information.

    The two interviewees from distributors described obtaining a competitive advantage by providing their retailers with product much quicker than in the past. Their organizations not only meet or exceed the retailers’ accurate and complete product information requirements, but the distributors provide that information consistently sooner than competitors. The consumer electronics distributor’s director of digital and e-commerce marketing described the before and after TTM impact this way: “We sell to a bunch of different retailers. With Akeneo, it typically takes us a day or two at most to fully enrich a product and have it ready to go to our different customer sites to all sales channels. Before Akeneo, that could be a week, two weeks, or longer depending on the product and our relationship with the vendor who is supplying the product.”

  • Manufacturers saw more new products and more innovative products due to product manager productivity enabling more value-add work.

    The manufacturer interviewees also spoke of another benefit of the time saved by no longer doing menial tasks, product managers were able to focus on new products, and, frequently, new innovative products. Previously, the time spent on developing new products was limited due to time constraints. After Akeneo was implemented, the product managers had more time to focus on new products, which led to additional revenues and improved employee satisfaction.

• Modeling and assumptions.

  Based on the interviews, Forrester assumes the following for the composite organization:

  • Annual revenue starts at $500 million and grows 5% per year without Akeneo.
  • The use of Akeneo directly increases revenues by 0.25% in Year 1 with 0.02% annual increases due product development acceleration and innovation due to increase in product manager focus time.
  • The use of Akeneo directly increases revenues 0.5% in Year 1 with 0.03% annual increases due to the ability to add more products, TTM to distributors, and TTM by distributors.
  • An operating margin of 7%.

• Risks.

  Risks that could impact the realization of this benefit include:

  • Time-to-market improvements will be vary based upon maturity of existing processes and an organization’s ability to improve existing product information management workflows.
  • The ability to increase retailer product expansion will be affected by retailer relationship as well as product strategies.
  • The organization’s operating margin may vary.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $582,000.

Product Manager Retention Improvement Due To Employee Experience Improvement

• Evidence and data.

  Interviewees had a major unexpected benefit of product managers’ job satisfaction improving because of the Akeneo implementation, which led to employee retention improvements. By reducing the menial work, product managers were able to do more interesting, valuable work. This made them happier in general and more proud of their work product.The machinery and parts manufacturer’s VP marketing, e-commerce, and customer experience shared: “Prior to Akeneo we experienced quite a bit of product manager turnover. We haven’t had any turnover in product management since we implemented Akeneo, which is even more impressive considering labor issues these days.”

• Modeling and assumptions.

  Based on the interviews, Forrester assumes the following for the composite organization.

  • The composite organization has 12 product managers.
  • Product manager turnover averaged 20% per year before Akeneo.
  • Akeneo reduces product manager turnover by 75%, to 5% per year.
  • The cost of recruiting, training, etc. of a new product manager is $15,000 per employee.

• Risks.

  Risks that could impact the realization of this benefit include:

  • The current turnover rate of product managers.
  • The relationship of product manager to product count and revenue.
  • The cost of recruiting, training, etc., which will vary based upon location and product complexity.

• Results.

  To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $54,000.

Unquantified Benefits

Additional benefits that customers experienced but were not able to quantify include:

• Simplified e-commerce platform implementation.

  The interviewees from the specialty product distributor and the consumer electronics distributor both said that having Akeneo already implemented made their organizations’ e-commerce platform change easier, allowing them to focus on non-PIM-related challenges. The consumer electronics distributor’s director of digital and e-commerce marketing said: “We changed our e-commerce platform since implementing Akeneo and that simplified things. There were no issues with the transition at all from a PIM standpoint. There was already a connector between Akeneo and our new e-commerce system, so switching over was more or less just pointing our Akeneo API to the e-commerce connector.”

• Easy integration with multiple systems, providing timely and accurate product data.

  Interviewees spoke of integrating Akeneo with multiple platforms, both upstream and downstream. Integrated platforms include product lifecycle management (PLM) systems, ERP systems, CRM systems, WMS, digital asset management (DAM) systems, marketing automation platforms, distributor portals, and e-commerce systems. The product information shared reduced data collection and sharing efforts while improving accuracy and timeliness.

• Improved data governance built into product management workflows.

  Interviewees noted that Akeneo made it possible to require that certain fields be populated, and other attributes be correctly formatted, allowing them to ensure completeness. The Data Quality Insights capability was a feature that some interviewees wished that they used earlier.

• Strong partnership and value-based relationship with Akeneo.

  All interviewees spoke positively about working with Akeneo and the company’s commitment to ensuring success. The consumer electronics distributor’s director of digital and e-commerce marketing summed it up well: “We have a great relationship with Akeneo. They’ve always been extremely responsive and helpful to us. They’re probably our best software vendor to work with from a responsiveness point of view and taking issues to heart and making change, that sort of thing. In fact, I think they’re the best vendor our company works with.”

• Support from a knowledgeable and engaged ecosystem around Akeneo.

  The interviewees who utilized Akeneo integrators spoke very highly of them. The machinery and parts manufacturer’s VP marketing, e-commerce, and customer experience described it this way: “I must say that our high grades for Akeneo include how impressed we were with their partners. We interviewed three partners. They showed commitment to Akeneo and knowledge of our business challenges. The integrator we chose was fully engaged and helped make us feel good about our Akeneo investment.

• Improved ability to meet federal and state regulations using Akeneo.

  As the central source for product information, Akeneo became the central source for product regulation data. In that role, Akeneo was used to provide product compliance, reducing audits costs and fines due to regulation noncompliance. The consumer electronics distributor’s director of digital and e-commerce marketing shared: “Akeneo helps us massively with regulation compliance. Part of our product completeness process includes shipping regulations and other regulations that we need to adhere to. There are so many different pieces of information that you have to get right. Getting that information wrong can lead to fines and all sorts of other trouble.”

• Better collaboration across the enterprise with product information.

  Akeneo helped people across the organizations get easy access to product information. Interviewees described how individuals were accessing product information directly from Akeneo or through applications that Akeneo was integrated with. This access saved people time, provided consistent quality product data, and ensured the democratization of product information.