Title: THE RETAIL INFORMATION SYSTEM
1THE 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.
3Applications 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
4Applications 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
5Benefits 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
6Benefits 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)
8Point-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 .
9CRM 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.
10The 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
11UPC 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.
12Electronic 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.
13Quick-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.
14Data-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.
15Data 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
16Data Bases (Illustrative)
- Product Category Data Bases Total category sales
per period, retailer profit margins, percentage
of items discounted etc.
17Steps 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
18Data 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.
19Data 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
22Types 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.
23Types 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
24Types 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.