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THE RETAIL INFORMATION SYSTEM

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THE RETAIL INFORMATION SYSTEM A Retail Information System anticipates the information needs of retail managers; collects, organizes and stores relevant data on a ... – PowerPoint PPT presentation

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Title: THE RETAIL INFORMATION SYSTEM


1
THE RETAIL INFORMATION SYSTEM
2
  • 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.

3
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

4
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

5
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

6
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

7
  • Electronic Point-of-Sale Systems (EPOS)
  • Electronic Funds Transfer at Point of Sale
    (EFTPOS)

8
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 .

9
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.
10
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

11
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.

12
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.

13
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.

14
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.

15
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

16
Data Bases (Illustrative)
  • Product Category Data Bases Total category sales
    per period, retailer profit margins, percentage
    of items discounted etc.

17
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

18
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.

19
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

20
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.

21
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

22
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.

23
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

24
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.
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