THE RETAIL INFORMATION SYSTEM

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THE RETAIL INFORMATION SYSTEM
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• 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.

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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

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Applications of IT in Retailing (contd.)

• Tools to Plan the Business Software to plan,
  budget, forecast.
• 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

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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

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Benefits of IT in Retailing (contd.)

• Marketing Benefits
• Improved data-effectiveness of promotions,
  forecast of sales
• Ability to incorporate faster responses to
  changing market conditions
• Consumer benefits from operational efficiencies
  e.g. shorter queues
• Can lead to building of loyalty
• Additional selling space coz of reduced
  stockholdings

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• Electronic Point-of-Sale Systems (EPOS)
• Electronic Funds Transfer at Point of Sale
  (EFTPOS)

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Point-of-Sales (POS) applications

• The place where a retail transaction occurs
  is called a point of sale e.g. checkout counter
  at departmental stores, kiosks, shops etc. A
  point-of-sale system combines hardware and
  software to enable a retail transaction to take
  place. The hardware components in a POS system
  include credit card devices, bar code scanners,
  invoice printers etc. The software component is
  the application that integrates various hardware
  components during a sale transaction. It includes
  point-of-sale tasks as well as integrated
  accounting, CRM and inventory management
  solutions. The POS application also includes
  invoicing features to generate bills and
  invoices. The invoicing feature includes items
  and prices in a sale and also handles taxes,
  discounts and various payment options .

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CRM is a business strategy that helps companies
in increasing their profits by putting customers
needs at the center of the organization. CRM
involves managing and storing customer related
information, both sales and service related, to
enable companies to provide better services to
them. CRM solutions enable companies to create
and maintain relationships with customers by
tracking their interests, requirements and buying
patterns.
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The Universal Product Code (UPC) or Barcode

• First 3 digits Country code
• Next 4 digits Company code
• Next 4 digits Product code
• Last digit Check digit

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UPC vs SKU

• While some may haphazardly interchange the terms
  UPC and SKU, they are actually two quite
  different entities. They are both numeric-based
  codes assigned to products, but UPCs, or
  Universal Product Codes are standardized for
  business use and provide a product description
  that, once scanned, anyone could read. In
  contrast, a SKU, or Stock Keeping Unit, is a
  number assigned to a product by the company for
  stock-keeping purposes and internal operations.
• The UPC code is affixed to a product wherever it
  is sold, remaining a constant throughout the
  products shelf life. Since a SKU is unique to
  the company, the same product would have
  different SKUs if sold by different companies,
  but they would have the same UPC.
• Another difference is that SKUs are typically
  eight alpha-numeric digits, while UPCs are 12
  digits, numeric only.
• In conclusion, SKUs are for internal use, and
  UPCs are for external, or universal, use.

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Electronic data Interchange (EDI)

• With EDI, retailers and suppliers regularly
• exchange information through their computers
• with regard to inventory levels, delivery times,
• unit sales etc of particular items. Both parties
  enhance their decision-making capabilities,
  better control inventory and are more responsive
  to demand.

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Quick-Response (QR) Replenishment Systems

• 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.

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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.

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Data Bases

• 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

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Data Bases (Illustrative)

• Product Category Data Bases Total category sales
  per period, retailer profit margins, percentage
  of items discounted etc.

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Steps in Data-base Management

• Plan the particular database and its components
  and determine information needs
• Acquire the necessary information
• Retain the information in a usable and accessible
  format
• Analyze the data base for organization purposes
• Update the database regularly

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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.

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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

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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.

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Types of Information Systems

• RIS can be divided into 4 basic types
• 1. Transaction Processing Systems (TPS) Used to
  facilitate customer transactions and other
  routine business processes (e.g. EPOS systems,
  payroll and employee record keeping). Critical to
  operations. Forms major input into other systems

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Types of Information Systems (contd.)

• Management Information Systems (MIS) To assist
  middle managers in their monitoring, controlling
  and decision-making activities.
• - Provide routine summary or exception reports
  
• (usually from transaction data from TPS
  indicating firms current performance) either in
  the form of a report or online access.
• -Usually involve pre-specified questions, simple
  summaries and comparisons.

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Types of Information Systems (contd.)

• Decision Support Systems (DSS) IS designed to
  assist manager in non-routine semi-structured or
  unstructured decisions.
• -Allows user to conduct a what-if analyses by
  changing the assumptions underlying various
  components of the decision

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Types of Information Systems (contd.)

• Executive Support Systems Designed to support
  senior managers responsible for making strategic
  decisions- non-routine and require information
  about trends in the external environment as well
  as internally.
• - Incorporates information both from MIS and DSS
  and external data about economic, competitive and
  regulatory environment etc.