Unit 8- IT & Retailing

7/29/2019 Unit 8- IT & Retailing

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Unit 8

Information technology andretailing


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Chapter Objectives

To discuss how information flows in a

retail distribution channel

To show why retailers should avoidstrategies based on inadequate

information

To look at the retail information system,its components, and recent advances

To describe the marketing research

process


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Figure : How Information Flows in a

Retail Distribution Channel

Information

and the

Supplier

Information

and the

Retailer

Information

and the

Consumer


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Suppliers Need To Know

From the Retailer

Estimates of

category sales

Inventory turnover

rates

Feedback oncompetitors

Level of customer

returns

From the Customer

Attitudes toward

styles and models

Extent of brand

loyalty

Willingness to paya premium for

superior quality


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Retailers Need To Know

From the Supplier

Advance notice of

new models andmodel changes

Training materials

Sales forecasts

Justifications for

price changes

From the Customer

Why people shop

thereWhat they like and

dislike

Where else peopleshop


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Consumers Need To Know

From the Supplier

Assembly and

operatinginstructions

Extent of warranty

coverage

Where to send a

complaint

From the Retailer

Where specific

merchandise isstocked in the store

Methods of payment

acceptable

Rain check and

other policies


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Retail Information System (RIS)

Anticipates the information needs of

retail managers

Collects, organizes, and stores relevant

data on a continuous basis

Directs the flow of information to the

proper decision makers


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Figure : A Retail Information

System


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Data-Base Management

A major element in an RIS

System gathers, integrates, applies, and

stores information in related subject areas Used for

Frequent shopper programs

Customer analysis Promotion evaluation

Inventory planning

Trading area analysis


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Five Steps to Approaching Data-

Base Management Plan the particular data base and its components and

determine information needs

Acquire the necessary information

Retain the information in a usable and accessibleformat

Update the data base regularly to reflect changingdemographics, recent purchases, etc.

Analyze the data base to determine strengths andweaknesses


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Figure : Retail Data-Base

Management in Action


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Figure : Data Warehousing


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Components of a Data Warehouse

Physical storage location for datathe

warehouse

Software to copy original databases and

transfer them to warehouse

Interactive software to allow processing

of inquiries

A directory for the categories of

information kept in the warehouse


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Data Mining and Micromarketing

Data mining is the in-depth analysis ofinformation to gain specific insights

about customers, product categories,vendors, and so forth

Micromarketing is an application ofdata mining, whereby retailers usedifferentiated marketing and developfocused retail strategy mixes for specificcustomer segments


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Figure : Applying UPC Technology to

Gain Better Information


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Figure : The Marketing Research

Process


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Marketing Research

in Retailing

The collection and analysis of

information relating to specific issuesor problems facing a retailer


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Secondary Data

Advantages

Inexpensive

Fast

Several sources and

perspectives

Generally credible

Provides

background

information

Disadvantages

May not suit current

studyMay be incomplete

May be dated

May not be accurateor credible

May suffer from

poor collection

techniques


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Secondary Data Sources

Internal

Sales reports

Billing reports

Inventory

records

Performancereports

External

Data bases

ABI/Inform, etc.Government

U.S. Census of RetailTrade

Statistical Abstract of theU.S.

Public records


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Primary Data

Advantages

Collected for

specific purposeCurrent

Relevant

Known andcontrolled source

Disadvantages

May be more

expensiveTends to be more

time consuming

Information may not

be acquirable

Limited perspectives


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Primary Data Decisions

In-house or outsource?

Sampling method?

Probability Nonprobability

Data collection method? Survey

Observation Experiment

Simulation


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Survey Methods

In-person

Over the telephone

By mail

Online

Disguised

Nondisguised


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Figure : A Semantic Differential

for Two Furniture Stores


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Mystery Shoppers

Retailers hire people to pose as

customers and observe operationsfrom sales presentations to how

well displays are maintained to

service calls


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Integrated Retail Logistics and

Information Systems


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Why important?

Incredible competitive advantageWhy Wal-Mart is #1

Why Carrefour (France) is #2

Relates to Asset Turnover :Net Sale/Total Assets (assets include inventory )

Want enough to satisfy customers, but nothing extra


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Integrated Info Systems and Logistics

match flow of goods and information


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Information FlowQuick

Response System Electronic DataInterchange (EDI)

computer to computer

exchange (very

expensive)

Today, Internet is

replacing or

supplementing EDI

(much cheaper)


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Advantages of Quick Response

For retailer

Reduces lead time

Increase productavailability

Reduces logistics

expense

For vendor

Timely info on

product demand(dont get stuck

making things

that arent

selling)

Better scheduling

of workforce


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Advantages of Quick Response

(contd) For Customer:

Better assortment of goods

Better availability of goods

Fresher merchandise


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Quick Response

What kinds of merchandise?

Initially basic merchandise

Today, everything


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Data Warehousing

Purchase datastored in a data warehouse

generally organized by store

What boughtindividual item plus wholebasket of goods

When

Who boughtif have customer profile(customer loyalty programs)

How paid for -- credit card, cash, check


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Logistics

Process of

managing the flow

of merchandise

from vendor todistribution center

to store to

customer


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Distribution Centers

Very sophisticated

Big

Few employeesvery automated

Ideally, not used to store goods; insteadcross dock -- take off delivery truck andload truck destined for a particular store


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Who uses distribution centers

1. Retailers who have widely fluctuating demand

for specific items at the store levelmore

accurate sales forecast is demand is aggregatedacross stores

2. Retailers who require frequent replenishment

3. Retailers who carry large # of items

4. Retailers with large number of outlets within

150200 miles


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Vons Storage and Retrieval Center vs.

Saks Distribution Center Both are highly automated

Vons does store product

Saksstate of art facilitycross docking


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The Internet and Retailing

More than just a selling device

Used to join retailers and vendorsReplacing EDI because it is cheaper

Good ex: ASNs to Saks Distribution Centersent via

Internet from vendors to DC warehousemanagement system


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Reference

Berman & Evans, RETAIL MANAGEMENT, A STRATEGIC APPROACH, 10th Edition. Levy & Weitz, Retailing management, Tata McGraw Hill company,

317-341.

http://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http%3A%2F%2Froad.uww.edu%2Froad%2Flavinm%2FRetail%2520Management%2FIntegrated%2520Retail%2520Logistics%2520and%2520Information%2520Systems.ppt&rct=j&q=Retail+informati

on+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCw
http://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCwhttp://www.google.co.in/url?sa=t&source=web&ct=res&cd=2&ved=0CAoQFjAB&url=http://road.uww.edu/road/lavinm/Retail%20Management/Integrated%20Retail%20Logistics%20and%20Information%20Systems.ppt&rct=j&q=Retail+information+systems+ppt&ei=8Ut6S9XZLYne7APr0MjUBw&usg=AFQjCNFdOTnWWyF6L1cvYRZ2ttPe5LmKCw


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Thank You.

Documents

Unit 8- IT & Retailing