Chapter Six: Retailing

Information Systems and

Research

Integrated Retail Management Flow Chart

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Objectives

• Define and explain the purpose of a retail information system (RIS).

• Explain the steps in conducting marketing research.

• Describe the difference between secondary and primary data and identify some tools for collecting data.

• Discuss the role of technology in gathering data.

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Data vs. Information

• Data – news, facts, and figures

• Information – meaningful

• Decision making - combination of gut reactions and planning

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Retail Information Systems (RIS)

• Retail Information System

• Systems should be

– General yet Specific

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Retail Information Systems (cont’d)

• Used by multichannel retailers

• “Real time” decision making

• Can provide a competitive advantage

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Input and Output Elements for a Retail Information System

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Universal Product Code (UPC)

• Standard for product identification

• Price verification software and services

• Quality of barcode important

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Universal Product Code (cont’d)

• Have company identifiers built into it

• Additional numbers are assigned to identify a specific SKU

• Participation costs varies with size of the retailer

• Sunrise harmonization initiative

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UPC Code

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Point of Sale Terminals (POS)

• Computer workstation

• Increases speed, reduces errors

• Optional peripherals include invoice printers, magnetic strip readers, modems, etc

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Radio Frequency Identification (RFID)

• Similar to bar codes, except – Does not need to be in the line of sight of a scanner

– Does not require a human to operate

• Allows for mass scanning of items

• Consists of an antenna, a transceiver and a tag

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RFID

• How it works:

– Antenna emits radio signals that activate tag

– Transceiver picks up data and sends it to a computer

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Self-Checkout Systems

• 1999 - 6 % of grocery stores had self-checkout systems

• In 2003 - 30 % of grocery stores

• 2006 – 75% of grocery stores

• Cost ~ $100,000 for 4 checkout lanes

• Costs often recouped after 1 year

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Outsourcing

• Outsourced areas include

– RIS

– Security

– Theft management programs

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Marketing Research

• Research conducted to identify and define marketing opportunities and problems

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Market Research

• A subfunction of marketing research

• Retailer is concerned only with information about markets and potential markets

• Less theoretical than marketing research

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The Marketing Research Process

Source: Ranjit Kumar, Research Methodology (Thousand Oaks, CA: Sage Publications, 1999.)

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Gathering Information

• Secondary Data

• Primary Data

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Secondary vs Primary Data

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Secondary Primary

Ease to gather Yes No

Cost Low High

Accuracy

High – depends

on source

High – depends

on process

Problem specific No Yes

Data Privacy No Yes

Currency of

Information

Can be outdated Very current

Primary Data

• Must resolve questions related to

– Sampling

– Data Collection

– Data Analysis

– Reports

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Sampling Concepts

• Probability sampling

• Nonprobability sampling

• Sampling frame

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Data Collection

• Methods for collection

– Surveys/questionnaires

– Observation

– Experiments

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Use of Technology in Marketing Research

• Approaches

– The World Wide Web

– Search Engines

• General directories

• Search engines based on algorithms

• Specialized search engines

• Industry specific searches

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