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Principles of Retailing 5

The document discusses information sharing between retailers and suppliers/customers. It describes the types of data collected from customers (preferences, loyalty), suppliers (sales forecasts), and shared with each party. It then discusses the importance of an integrated retail information system to analyze collected data and direct information to decision makers. Key aspects of database management systems are outlined, including data warehousing to store all retailer databases in one accessible location. The benefits of data mining and micromarketing using customer insights are also summarized.

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Keerthi Sharma
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19 views

Principles of Retailing 5

The document discusses information sharing between retailers and suppliers/customers. It describes the types of data collected from customers (preferences, loyalty), suppliers (sales forecasts), and shared with each party. It then discusses the importance of an integrated retail information system to analyze collected data and direct information to decision makers. Key aspects of database management systems are outlined, including data warehousing to store all retailer databases in one accessible location. The benefits of data mining and micromarketing using customer insights are also summarized.

Uploaded by

Keerthi Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Principles of Retailing

MODULE 5
Information in Retail
Distribution
Information to supplier
Estimates of category sales(retailer)

Inventory turnover rates(retailer)

Feedback on competitors(retailer)

The levels of customer returns(retailer)

Attitudes toward given styles and models(customer)

The extent of brand loyalty(customer)

Willingness to pay a premium for superior quality(customer)


Advance notice of new models and model changes(Supplier)

Training materials for complex products(Supplier)

Sales forecasts(Supplier)

justification for price hikes(Supplier)

Why people shop with the retailer(Customer)

What they like and dislike about the retailer(Customer)

Where else people shop(Customer)


Retail Information System
Data gathering and analysis should not be regarded as a one-shot resolution of a single
retailing issue. They should be part of an ongoing, integrated process. A retail information
system (RIS) anticipates the information needs of retail managers; collects, organizes, and
stores relevant data on a continuous basis; and directs the flow of information to the proper
decision makers.
Retail
Information
System
Database Management: Retailing
In database management, a retailer gathers, integrates, applies, and
stores information related to specific subject areas. It is a major
element in a retail information system, and may be used with
customer databases, vendor databases, product category databases,
and so on. A firm may compile and store data on customer attributes
and purchase behavior, compute sales figures by vendor, and store
records by product category.
Shopper programs

Customer analysis

Why
Promotion evaluation

Database Inventory planning

Management Trading-area analysis

Joint promotions with manufacturers

Media planning

Customer communications
Process of Database Management
Plan Acquire Retain Update Analyze
Plan the Acquire the Retain the Update the Analyze the
particular necessary information database database to
database and information in a usable regularly to determine
its and reflect company
components accessible demographic strengths and
and format trends, recent weaknesses
determine purchases,
information and so forth
needs
Data Warehousing
One advance in database management is data
warehousing, whereby copies of all the databases in a
firm are maintained in one location and are accessible
to employees at any locale. A data warehouse is a
comprehensive compilation of the data used to
support management decision
Data
Warehousing
Fundamental Attributes Of A Data
Warehouse
❑Subject-Oriented
❑Integrated
❑Time-Variant
❑Nonvolatile
Data Mining and Micro Marketing
Data mining is the in-depth analysis of information to gain specific insights about
customers, product categories, vendors, and so forth. The goal is to learn if there are
opportunities for tailored marketing efforts that would lead to better retailer performance.
One application of data mining is micromarketing, whereby the retailer uses differentiated
marketing and develops focused retail strategy mixes for specific customer segments,
sometimes fine-tuned for the individual shopper.
Gathering
Information
Universal Product Code
(UPC)

Electronic Data Interchange


(EDI)
Universal Product
Code (UPC
With the Universal Product Code
(UPC), products (or tags attached
to them) are marked with a series
of thick and thin vertical lines,
representing each item’s
identification code. An item’s UPC
includes both numbers and lines.
The lines are “read” by scanners at
checkout counters. Cashiers do not
enter transactions manually.
With electronic data interchange (EDI) and Internet electronic
data interchange (I-EDI), retailers and suppliers regularly
exchange information through their computers with regard to
Electronic Data
inventory levels, delivery times, unit sales, and so on of
Interchange (EDI) particular items. As a result, both parties enhance their
decision-making capabilities, better control inventory, and are
more responsive to demand.
Point-of-sale (POS) Terminal
A point-of-sale (POS) terminal is a hardware system
for processing card payments at retail locations.
Software to read magnetic strips of credit and debit
cards is embedded in the hardware. Portable devices
(i.e., not terminals anchored to a counter), either
proprietary or third-party, as well as contactless
capabilities for emerging forms of mobile payments,
represent the next generation of POS systems.
Radio Frequency
Identification (RFID)
Radio Frequency Identification (RFID) refers to
technologies that use wireless communication
between an object (tag) and an interrogating device
(reader) to automatically identify and track the
physical location of each object. A tag's transmission
range is limited to several meters from the reader and
a clear line of sight between the tag and reader is not
necessarily required.
Self check-out
systems
As your business grows, your
stores get bigger and the
checkout lines become longer. To
handle this, you’ll need to
dedicate more space to checkout
counters and assign more
cashiers. If customers check out
themselves, retailers can lower
wait times and reduce the queue.
The customer interacts with the welcome screen to start
checkout.
1
They scan the products.
2
They pay for their order.
3
The customer completes checkout and gets a receipt.

Process of Self-Checkout
FDI in Indian
Retailing
In terms of economy, retail is one of the pillars
of the Indian economy with the sector
contributing to about 10% of the Gross
Domestic Product (GDP). In this sector, the
organised sector is merely 9% and the
unorganised sector dominates. The maximum
number of retailers operate out of less than
500 sq. feet of retail space. The unorganised
retail sector also absorbs about 7% of the
labour force in India.

The central government has approved 100%


FDI in single-brand retail and 51% FDI in multi-
brand retail.
FDI in Indian Retailing
Equity inflow through FDI during April to December period of 2021-22 is USD 43.1 billion
which is 16 per cent lesser than the USD 51.4 billion received in FY 2020-21, latest official
data shows, even as the government continued to put in place an enabling and investor-
friendly FDI policy and remove policy bottlenecks that have been hindering the investment
inflows into the country.
1. Horizontal FDI

It is an investment made by Multinational company in different nations. The


investment is made for conducting the

similar business operations as already operated by the company. Horizontal FDI


results in expansion of home country.

For example, if a soft drink manufacturing company makes its plant outside its
national borders, then it is a horizontal

FDI.
Types of FDIs 2. Vertical FDI

It takes place when a company or entity via FDI moves upstream or downstream
in different value chains i.e. when

firms perform value- adding activities stage by stage in a vertical fashion in a host
country.

3. Export Platform FDI

It is an FDI from a source country into a host country for exporting to a third
country.
Advantages of FDIs in Indian Retailing
Growth in Economy
Job Opportunities
Benefits to Farmers
Benefits to consumers
Lack of Infrastructure
Cheaper Production facilities
Availability of new technology
Long term cash liquidity
Conducive for the country’s economic growth
FDI opens up a new avenue for Franchising
Disadvantages of FDIs in Indian Retailing

Impact on Local Markets ( Kirana Shops)


Limited Employment Generation
Fear of Lowering Prices
Negative Impact on Indian Economy
Negative Impact on Indian Domestic Market

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