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Applications of IT in Retailing
Automating Processes: Electronic Point of Sales (EPOS), Inventory Planning, Ordering and Management Collecting Data About Customers: Purchasing patterns of customers, segmentation, personalization, customization of offers, loyalty programmes, store design and product placements Feedback on Marketing Decisions: EPOS data to study effects of promotions, prices, new products and packaging changes Communications: With suppliers, customers, internal
Tools to Plan the Business: Software to plan, budget, forecast. Choose best locations (GIS) Adding Value to Retail Transactions: IT-assisted transactions (ATMs) may be preferred by some customers, self-scanning, in-store kiosks for product and info. search. Technologically-enabled Shopping: Internet shopping
Benefits of IT in Retailing
Cost and Productivity Benefits Efficiency of time/transaction speed increases Reduced queuing times Operating cost reductions Increased accuracy of all aspects of the sales transaction Improved inventory management Reductions in stock outs and stock holdings
A Retail IT System
Electronic Point-of-Sale Systems (EPOS) Electronic Funds Transfer at Point of Sale (EFTPOS)
represents membership of 101 countries First 3 digits: Country code Next 4 digits: Company code Next 5 digits: Product code Last digit: Check digit
RFID (Radio Frequency Identification Tags): Wireless barcodes that provide wireless communication b/w objects & readers; uses tags that can store data; tracks products/eqpt. in real time w/o contact or line of sight
When EPOS are combined with EDI, retailers are in effect adopting just-in-time or quick response (QR) replenishment methods. Reduces stock outs and inventory levels, hence improving service to customers and reducing costs for retailers. CPFR( Collaboration, Planning, Forecasting and Replenishment)
Electronic Point of Sales (EPOS) Interactive Kiosks Electronic Point-of-Sale Signage Self-Scanning and Self-Checkout system Virtual Display Cases Body Scanning
A Retail Information System 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.
Data-Base Management
Procedure a retailer uses to gather, integrate, apply and store information related to a specific subject area. Involves use of customer data bases, vendor data bases, product category data bases etc.
Customer data bases-Purchase frequency, items bought, avg. purchase, demographics, payment methods etc. Vendor data bases- total retailer purchases per period, total sales to customer per period, most popular items, retailer profit margins, avg. delivery time and service quality
Product Category Data Bases: Total category sales per period, retailer profit margins, percentage of items discounted etc.
Data Warehousing
The data warehouse is where information is collected, sorted and stored centrally Components of a data warehouse:
1. Data warehouse, where data are physically stored
2. Software to copy original databases and transfer them to warehouse 3. Interactive software to allow enquiries to be processed 4. Directory for categories of information kept in warehouse.
Data Mining
Data Mining: In-depth analysis of information to gain specific insights about customers, product categories, vendors etc. Relies on special software to sift through vast amounts of info. in a data warehouse to uncover patterns and relationships b/w different factors
Micro Marketing
Application of data mining whereby retailer uses differentiated marketing and develops focused retail strategy mixes for specific customer segments, sometimes fine-tuned for the individual shopper.