Page 251 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes Introduction

Retail management involves running a store where merchandise is sold. Retail management
information systems include the use of hardware, software and procedures to manage activities
such as planning, inventory control, financial management, logistics and point of sale transactions.
Use a retail management information system in your business when you need to manage your
store, finances and inventory from one office.
Information Technology (IT) refers to the management and use of information using computer-
based tools. It includes acquiring, processing, storing, and distributing information. Most
commonly it is a term used to refer to business applications of computer technology, rather than
scientific applications. The term is used broadly in business to refer to anything that ties into the
use of computers.

Mostly businesses today create data that can be stored and processed on computers. In some
cases the data must be input to computers using devices such as keyboards and scanners. In other
cases the data might be created electronically and automatically stored in computers.

In this unit, you will learn about the role of information technology in retailing.

14.1 Importance of IT in Retailing

Information technology is one of the greatest enablers of the Collaboration between the vendor
and Retailer. Wal-Mart, the largest company in the world with more than 2,700 stores and $ 217
billion in revenue last year, gets a major competitive advantage from the efficiency of its
electronic product information, ordering, supply-chain management and delivery systems. It
possess the influence to get manufacturers into collaborative E- business, because it can represent
5% to 30% of a manufacturer’s total business. Wal-Mart requires every manufacturer to manage
its own in-store inventory and uses EDI networks and its private collaborative trading hub,
Supplier Link, to consolidate global purchasing. It brings 10,000 suppliers online to bid on
contracts and communicate sales and inventory data. Wal-Mart also uses its networks to manage
its Supply Chain and Logistics. In this kind of an environment, greater data transparency and
information sharing as well the speed of response cement the supplier-retailer relationship. The
same is the case with 7-Eleven Inc., with over 30,000 suppliers in all-different sizes. Even in the
fashion conscious sectors of Retailing, the use of IT helps. Payless’ sources nearly 80% of the 250
million pairs of shoes sold through its 5,000 stores from Asia. This represents challenges in a
style-oriented business. The shoe business is very fashion driven. Many products have short
lifecycles like 13 weeks. Payless is concentrating on a core vendor/core factory programme to
achieve production efficiencies and stay ahead of fashion trends. The speed of interacting, enabled
by it helps in competing with similar stores in the shoe business.

Computers have replaced cash registers for billing. The bar coded products using UPC and EDI
are scanned for billing. The importance of information technology in retail sector stems from
the importance of data. Data is nothing but information which aids decision-making.
The use of technology aids data collection. Data can be collected about consumers, frequency of
their buying. This can help a retailer in distinguishing customers. The use of information
technology serves as a basis for integrating the functioning of various departments. With an
increase in the number of outlets, collecting and analyzing information becomes indispensable.
Technology plays crucial role in this regard. Technology has been applied to some of the unique
requirements of the retail business like the need for product identification, the need for quick
billing and settlement of bills electronically and specialized logistics applications.
Modern technology is making information required for retailing decisions ever more accessible.
It is possible to track customer buying behaviour and better analyse and understand what

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