Page 37 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes Overtime, as consumer demand increased and retailers geared up to meet this challenge,
technology evolved rapidly to support this growth. A number of hardware and software tools
that have now become essential for retailing are listed below:

Bar Coding and Scanners

Bar coding and scanners are used to identify an item at the Point of Sale (POS). The Universal
Product Code (UPC) is a black and white bar code which is used to collect Sales information
using computer terminals that read (or scan) the code. The pre-stored data is used to calculate the
cost and generate the total bill for the customer.

This information can also be transmitted from computer to computer, to buyers, distribution
centers and then to vendors who in turn, quickly replenish the merchandise Tunnel scanning is
a new concept where the consumer pushes the full shopping cart through an electronic gate to
the point of sale. The items in the cart are hit by a laser beam and scanned, in a matter of seconds.
The entire customer has to do, is pay for the goods.
Credit Cards

Payment through credit cards has become extremely widespread and enables an easy payment
process. Electronic cheque conversion, a recent development, processes a cheque electronically
by transmitting transaction information to the retailer and the customer’s bank. The retailer
then voids the cheque and hands it back to the customer along with a receipt.

Electronic Data Inter change (EDI)

This is the computer to computer exchange of information, and business documents, from
retailer to vendor and back. In addition to sales data, information regarding purchase orders,
invoices and returned merchandise are transmitted from the retailer to the vendor.

Many retailers now require vendors to provide notification of deliveries before they take place.
Advanced Shopping Notice (ASN) is an electronic document received by the retailer’s computer
from the supplier in advance of the shipment. If accurate, the retailer can dispense with opening
cartons and checking the merchandise.

Internet

Is very fast emerging as a customer interface, reducing the need for a customer to physically
visit a store to view the product’s attributes. He/She can do so from the comfort of his/her home
and even place an order for the desired merchandise.

2.4 Economic Change

Despite the tremendous potential that exists, as stated earlier, retailing is among the lesser
evolved sectors in the Indian environment. Given the enormous amounts of investments to be
made, Foreign Direct Investment (FDI) is expected to play a very significant role. The Indian
economy in this respect is highly regulated.
A strong FDI presence in the retail sector will not only boost main stream retailing but will also
provide an impetus to FDI investments in up stream activities. This will be more prominent in
food processing and packaging industries, because many large retail chains also promote their
own brands by way of backward integration or contract manufacturing.

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