Retail Management Information Systems
Flow of Information – Steps
The billing clerk issues sale receipt for the product
The purchase information is recorded in the POS terminal and sent
to the buying / planning department
The Purchase information is aggregated and a purchase information
is created. It is sent to the vendor through EDI (Electronic data
Interchange)
Buying / planning department negotiates with the vendor for the
shipping dates and terms of purchase
Buying department communicates with the distribution centre /
stores to coordinate deliveries from the vendor and to the stores
Store manager also communicates with the distribution centre to
coordinate deliveries and check inventory status
Retail Management Information Systems
Data Warehousing
It is the coordinated and periodic copying of data from various
sources both inside and outside the enterprise, into an environment
ready for analytical and informational processing
Analysts from various levels of the retail operation extract
information from the data warehouse for taking marketing decisions
about developing and replenishing merchandise assortments
Data warehouse also contains information about the customers,
which is used to target promotions and group products together in
stores
Retail Management Information Systems
Electronic Data Intrerchange
EDI is the computer to computer exchange of business documents
from retailer to vendor and back.
In addition to sales data, purchase orders, invoices and data about
the returned merchandise are transmitted from retailer to the vendor
Advanced Shipping Note (ASN) is an electronic document received
by the retailer’s computer from a supplier in advance of a shipment
EDI can be transmitted through following ways;
• Proprietary EDI systems
• Intranets
• Extranets
Retail Management Information Systems
Logistics
It is the part of Supply chain process that plans, implements and
control the efficient, effective flow and storage of goods, services nad
related information from the point of origin to the point of
consumption in order to meet customer requirements
Different types of merchandise flow;
Flow from vendor to the distribution centre
from distribution centre to the stores
alternatively from vendor directly to the stores
UPC (Universal product Code) is the black and white bar code
printed on the package of products
Retail Management Information Systems
Various Retaile processes recorded in the information systems
Inbound transportation
• Receiving and checking
• Stores and Cross docking
• Getting merchandize floor ready
• Shipping merchandize to Stores
Outbound transportation
Reverse Logistics
Quick Response (QR) Delivery systems are inventory management
systems designed to reduce the retailer’s lead time for receiving
merchandize, thereby lowering inventory investment and improving
customer service levels
Retail Management Information Systems
Benefits of QR Systems
Reduce lead time
Increase product availability and lowers inventory investment
Reduces logistics expenses
Outsourcing
o Third party logistics companies
o Transportation
o Warehousing
o Freight Forwarders
Retail Audits
Study of a selected sample of retail outlets, provided as subscription-
based service by market research firms. Retail-audit service providers
gather information on a brand's sales volume, sales trends, stock
levels, effectiveness of in-store display and promotion efforts, and
other associated aspects.
What is Retail Audit?
It is a tool that opens up new option for strategic move in the market.
It helps every Marketer to find an optimum Brand/Product portfolio
for target segment with finest communication vehicle and the flexible
interiors for high product accessibility.
Sales representatives perform retail audits to check that products are
correctly priced, positioned, and stocked at retail outlets. You can
conduct retail audits on your own organization's products and a
competitor's product
Retail Audits
How to perform a Retail Audit?
To perform a retail audit the marketer should keep the following
views in mind.
1. Psychographics of consumers- To Draft Retail value chain
2. Brand Portfolio –To fill retail value chain draft with brands
and products
3. Retail Format- To fill the retail value chain draft with resources.
4. Service blue prints- Connect the resources and brand/products in
a retail value chain.
Retail Audits
Psychographic of consumers:
The value chain blue prints of retail must be design with
consumer psychographic in mind. The following questions must
be answered while designing the value chain blue prints.
1. What is life style of your consumers?
2. How much time they plan for shopping?
3. What is the key driver for shopping (passing time, Money)?
4. What vehicle they use usually to travel?
5. What is their disposable income?
6. Are they brand, Price or value conscious or a subset of it (BPV Analysis)?
The POC (Psychographic of consumers) helps to draft the value
chain blue print for a retail business. Moving further will serve
the purpose to check what brands /product mix we have to fill the
draft of value chain.
Retail Audits
Brand Portfolio:
It defines the brand /product span that we have to click the
consumers. Every retail product line must have a combination of
products for serving the two basic strategic purposes.
a. Penetration builders
b. Profit builders
Most of brand/product retail portfolio is based on proliferation
but if you see the effects in the long term it will cause
PRODUCT PLACEMENT INSUFFICIENCY. The symptoms
can be concluded by the increasing footfall but stagnation of
conversion rate.
Retail Audits
Retail Format:
It has to fill the value chain of retail by resources. The main
objective of retail format should be to make consumers process
of shopping very cozy. The factors which affect the process are:
a. People involved
b. System Involved
c. Infrastructure (Show Room space, Parking space, interiors,
sitting arrangement)
Retail Audits
Service Blue Prints:
It connects the brand or product with the resources for
accessibility to consumers. Service is not only inside the show
room but also outside (parking facilitating and others).
How to analyze your performance of retail audit?
The end result of RETAIL AUDIT must be to increase the
profit /square feet. Behind this figure enhancement, you can
guess the mechanism of each unit and factor under a system.
Online Retailing
E-tailing, or online Retailing
It was the Future group’s foray into e-tailing in 2007 that started the
trend, though Fabmall was the first e-tailer in India (it set up an online
shop in the late 1990s). Shoppers Stop followed by its e-tailing
venture in late 2008 and so did the Anil Ambani-owned ADAG group,
which launched RelianceMoneyMall the same year
The Internet and Mobile Association of India (IAMAI) has pegged
the e-commerce market in India at Rs 9,210 crore. The market is
estimated to grow 30 per cent year-on-year. E-retailing comes under e-
commerce.
E-tailing helps retailers build loyal customers and is aimed at
selling in areas where they don’t have a physical presence
E-tailing, or Online Retailing
In FY09, Future Bazaar sold Rs 122 crore worth of goods, 1.5 per
cent of total sales of the Future group. By 2011, we expect it to be 2-3
per cent. Worldwide, it contributes 7-10 per cent of sales,” he said .
Electronic goods and apparel are the most bought products online
Online marketplaces help create trade between metros and Tier II &
III cities by bridging the demand and supply gap.
Moreover, e-tailing helps retailers save on the real estate cost. Also,
an e-tailer does not have to carry huge inventories and can cut supply
chain costs.
It has other cost factors like delivery, technology, etc. Hence, It’s
not cheaper
E-tailing, or Online Retailing
Incidentally, e-tailing is not limited to retailers. FMCG major
Amway also launched its own e-tailing portal in 2008
For the direct-selling company, the online medium is aimed at
expanding the company’s existing distribution network across 500,000
Amway Business Owners and also to tap the vast semi-urban
customers base with direct access to Amway’s product range
E-tailing is the practice of selling retail goods on the internet. It is
the abbreviated version of “electronic retailing” which essentially
constitutes business to consumer transaction.
Global Retailing
Modern consumers are nowadays internationally focused as result
of their experience, technological development and movement to new
countries and locations
Retailers now locate themselves in different countries to satisfy the
needs and aspirations of customers, who are exposed to different
products and services across the world
Consumer look for global products I.e. those products that have
worldwide markets across various cultures ‘
A retailer internationalize its operations when it carries them in two
or more nations of the world
Global Retailing
Internationalization is the act of crossing international boundaries
with business interests
International retailer is one that sells directly to consumers through
shops or other forms of distribution in more than one country
Many retailer turn global, after they have established firmly in the
domestic markets
Some retailer use mix strategy for international development
They go for International acquisitions, Rebranding or introducing
separate brand formats
Global Retailing
Reasons for Internationalization
Gaining access to larger markets, hence increase in sales and profits
Gaining access to resources, raw material, vendors, etc.
Gaining access to new technologies, management practices, etc.
To counter competition
Key influencing factors in Internationalization of Retailers
Regulatory environment is different
Substantial investment is required for establishing the brand in
foreign markets
Internal re-organization of the company is required
Legal issues in Retailing
The Indian government relaxed outdated foreign direct investment
(FDI) laws to grant limited entry to overseas companies in 2006
In India, single-brand foreign retailers can now own a controlling
share of a business - up to 51 per cent - provided they gain
government approval and sell only their own goods.
Until now, foreign food retailers were forbidden to enter the
market, in a bid to protect local businesses and domestic supermarket
chains.
This has helped UK-based Marks and Spencers, specialising in
private label products, and food service companies such as
McDonalds and Pizza Hut that until now were forced to operate a
franchise system.
Legal issues in Retailing
International retail giants can only operate wholesale outfits -
despite recent pressure by Tesco and Wal-Mart bosses to influence
policy.
The legislative changes brought improvements to the FDI ration in
wholesale, yet foreign retailers are still restricted from building
supermarket networks.
Instead they can now own 100 per cent of their Indian wholesale
operations, without seeking governmental approval.
PwC states that the organised retail sector, comprised of regional or
national chains, is set to grow to 10 per cent by 2010, representing a
huge opportunity for prospective players.
Legal issues in Retailing
The government is now set to initiate a second wave of reforms in
the segment by liberalizing investment norms further.
This will not only favor the retail sector develop in terms of design
concept, construction quality and providing modern amenities but will
also help in creating a consumer-friendly environment.
Retail industry in India is at the crossroads but the future of the
consumer markets is promising as the market is growing, government
policies are becoming more favorable and emerging technologies are
facilitating operations in India.
As foreign investors cautiously test the Indian Markets for
investments in the retail sector, local companies and joint ventures are
expected to be more advantageously positioned than the purely foreign
ones in the evolving India's organized retailing industry.
Ethical issues in Retailing
Ethical Challenges fall into three interconnected categories:
Ethics: It relates to retailer’s moral principles and values.
Social Responsibility : A retailer exhibiting social responsibility
acts in the best interests of society – as well as itself. The challenge is
to balance corporate citizenship with a fair level of profits for stock
holders, management, and employees.
Consumerism: It relates to the activities of government, business
and other organizations that are designed to protect individuals from
practices infringing upon their rights as consumers
Ethical issues in Retailing
Green Issues
The emphasis is on the marketing activities of companies and their
operations related to local and global sustainability of different
resources
Retailers need to identify and quantify the processes and activities
of their operations in relation to the use of material and energy
They must discontinue sales and display of products that are not
eco-friendly
The packaging of the labels sold should be in the eco-friendly paper
/ material
