Unit 5 Information technology in Retailing .1 Non store retailing (e-retailing) ‘The impact of Information Technology in retailing Integrated systems and networking EDI— Bar coding — Electronic article surveillance Electronic shelf labels customer database management system5.1 Non-Store Retailing Non-store retailing is a form of retailing in which sales are made to consumers without using stores. Therefore, the selling of goods and services without establishing a physical store is known as Non-Store Retailing, It includes such services are vending machines, direct-to-home selling, telemarketing, catalog sales, mail order, and television marketing programs. In case of non-store retailing retailers use such methods to sell. products that do not have customers physically visiting a retail outlet, Zz com ebay Electronic Retailing (e-retailing) Electronic Retailing is the sale of goods and services through the internet. Electronic retailing or (etailing), can include business-to-business and business-to-consumer sales. Definition: The Electronic Retailing also called as e-tailing or internet retailing, is the process of selling the goods and services through electronic media, particularly the internet. Simply, the sale of retail goods and services online is called as electronic retailing It follows the B2C business model wherein the business interacts directly with the customers without the involvement of any intermediaries. Features Electronic Retailing 1. Round the Clock Business: With this distinct mechanism of commerce, the merchant can sell round the clock, everyday of the week, 24 hours a day and 365 days a year. There is no need to hire a clerk to run the store. This makes potential business for the merchants and organizations, 2. Consumer Convenience: Trading online makes it easy for people to buy from merchants online. The convenience of shopping from anywhere and at any time, from home or office is the major reason for consumers to buy online. Internet processing, credit card processing software point or sales etc., made it more convenient for the consumer to buy online. 3. Cost Effective: As new a medium of business, the Net afford the lowest transaction cost among all other methods of doing business. The WWW helps to promote services and ideas for a fraction of the cost of traditional advertising and marketing. 4, Access to All Markets: A web marketer can attract customers located all over the world, compete for the global market, build global chain and operate with global strategies. Opening website is the equivalent of opening branches everywhere in the world5, Increase Market Share: The internet is everywhere. It is changing the business environment in a great way. Small businesses are it to reach wider section of consumers. Retailers on the internet are doing potential businesses on groceries, books, toys, music, electronic goods and sending e-greeting to the customers Customers are accessing websites over the world, all at the click of the button, It increases market size and has become electronically enabled. 5.2 The impact of Information Technology in retailing 1, Lack of Awareness: Most of the business people do not understand the significance and importance of the electronic business medium or are unsure of the quality and delivery schedule, physical delivery of goods and ‘mode of payment. Lack of awareness of the technology and its potential benefits are also equally responsible for the poor growth of e-retailing, Lack of interest and willingness to make a paradigm shift has become a crucial issue. Many companies are not willing to accept that their business needs a revolutionary change to subsist in the potentially digital world. 2. Lack of Confidence: The people in India still show hesitancy in buying through the Net. Lack of quality products, timely delivery of products as some of them tend to go out of stock, lack of solutions security are the potential reasons for not developing e-retailing. People don’t understand this new way of buying and selling products ice, the services in a digital environment which are available online. 3, Skeptic Attitude: Though the Internet is continuing to grow at rapid rate, along with e-retailing transactions, the shoppers are still skeptical about safety and have not been quick to trust sending personal information such as credit card numbers or address over the net. 4, Credit Card Frauds: In India, distribution channels are just one part of the problem related to e-payments. The bigger problem is that of security. All credit card related transactions are approved offline and given the high incidence of frauds, In fact, there are some unconfirmed reports of a multi-national bank refusing to approve credit card transactions carried out by a large Indian portal. 5, Absence of Tax Laws: E-retailing over the net has effectively eliminated national borders. Net business posed many peculiar technological and legal problems making it difficult to impose tax and formulate a sound taxation policy. The following are the various tax implications e-commerce; * There is not fixed physical location for the internet. + It is difficult to monitor or prevent transmissions of information or electronic cash across the net. 6. Cyber Laws: There should not be any legal regulations, or barriers to faster and increased development of e- retailing. The crying need of the hour is urgent action to be taken by the government to enact cyber laws including electronic fund transfer, and amendments of Official Secrets Acts.5.3 Integrated Systems and Networking in Retail System integration is the process of bringing together the component subsystems into one system and ensuring that the subsystems function together as a system. Networking is creating a group of acquaintances and associates and keeping it active through regular communication for mutual benefit. Importance of Integrated Systems and Networking in Retail 1. Merchandise Management: ‘The items purchased provide information on merchandise sold in the store, This is the basis of sales analysis and decisions on replenishment, re-ordering and merchandise planning. This is information helps to reduce production time. This helps to avoid situation of stock out. 2. Managing Finance ~ It helps in; ‘© Strong expense management Revenue management ‘© Ensures complete real-time visibility Financial performance of the entire business 3. Collecting Information: The use of technology aids information collection. It can be about consumers, frequency of their buying and the typical basket size etc. This information helps the retailer distinguish the customer who shops at his store frequently and also reward them. The data on purchase made is also passed on to the credit card organization for payment to the merchant establishment and also for billing the customer. 4. Operations Efficiency: The information technology is the basis for integrating the functioning of various departments. A retailer has to invest in technology. However the benefits of the use of information technology are many. As the process gets automated the time involved in particular task is reduced. For example, billing manually takes a longer time compared to using a technology at the point of sale systems. 5, Effective Communication: Communication within the organization can be faster with the use of software. Retail stores can communicate with each other and with warehouses. Electronic Data Interchange (EDI) can also used for communication with suppliers and vendors. The information needs of the retailers largely depend on the size and the spread of the organization 6. Business Intelligence: It helps to improve business agility, visibility and decision-making. Analyze sales and item movement data to understand demand, optimize staffing levels and improve inventory turn 5.4 EDI (ELECTRONIC DATA INTERCHANGE) EDI is the extension of EPOS because it make the mutual relationships between suppliers and the retailers, EDI helps in exchanging the information from retailers to suppliers computers and facilitated orders, delivery notices, specifications, invoices, sales returns and even concerned sales data to the suppliers.EDI helps the retailers for just in time ordering, reduction of lead time in supply, speeding up stock turns around and encouraging the mutual partnerships among the retailers and suppliers. The successful implementation of EDI is concerned in reducing the operating cost of the retailers. Order processing without EDI Order processing with EDI Purchase 8 Order == invoice a> pacific ain F ‘Buyers internal Suppliers internat system/ERP ‘system/ERP. Benefits Ic helps in reducing the operating costs of the retailers. 2. Ithelps in making mutual partnerships among retailers and suppliers. 3, It ereates just in time ordering. 4, Ithelps in ordering specific items to the suppliers from the retailers. 5, Retailers are not bound only to one supplier. BAR Coding To make the retail operations system easier and simplest, bar coding system is used and this one is a new phenomena. In this method, unique bar code is given to every product to give identification along with the human readable numbers. This kind of bar coding system is known as EAN-European Article Number. It has been developed and managed on an international basis enabling compatibility for imported and exported goods. ‘The BAN is used in various categories of product including weights. Point of sale system use scanners (laser scanners) that one indicate the product price, weight, size, packaging level and billing details. In point of sale system the items in baskets are hit by laser beams and scanned. The bar coding system which use laser scanners is used in different forms by different retailers. Some retailers use simply microprocessor to identify the products in the basket or may be connected to the store computer. So, when the customer finish their shopping and do check out, at that time it can be easily passed the information for inventory management as it is centrally attached the computer server, that is why it is known as EPOS, But in traditional form of retail outlet this type of facility is not available and all the tasks are to be done manually which took all working to identify the turnover and what is need to be also,WINN MA A One-Dimensional Barcode (Weigh) «ic Ea: ote, aoe fl: Two-Dimensional Barcodes Benefits 1. The prime motive of bar coding is inventory management for retailers that switches from manuals to bar codes labels, Retailers cost reduced due to inventory handling and other supply related costs. Bar coding helps in availability of product categories all the time according to customer requirements. It increases the customer satisfaction. It helps in making competitive advantage. Itis efficient tools that making operations easier and not only an identification tool. aYRYN Electronic Article Surveillance (EAS) EAS is a technological method for preventing shoplifting from retail stores, pilferage of books from libraries or removal of properties from office buildings, Special tags are fixed to merchandise or books. Theses tags are removed or deactivated by the clerks when the item is properly bought or checked out, At the exists of the store, a detection system sounds an alarm or otherwise alerts the staff when it senses active tags. ‘Therefore, EAS systems are designed to help retailers boost their sales and protect their profits by increasing open merchandising opportunities while reducing shoplifting and internal theft. 5.5 Electronic Shelf Labels It is a modern system used by retailers for displaying product pricing on shelves and these are attached to the front edge of retail shelving. ESL units are typically compact credit-card sized devices designed to replace traditional paper shelf labels or individual sticker pricing. The process involves the use of liquid crystal device (LCD) that replaces paper shelf labels at the retailer's shelf edge. Changing thousands of paper shelf labels per week is a costly and a lengthy exercise. In today’s competitive market environment, retailers are promoted to look for means of increasing their profitability and productivity. As a result, they are pursuing more effective management, focused on both the purchasing function and control over selling prices5.6 Customer database management system CDM embraces a range of software or cloud computing applications designed to give large organizations rapid and efficient access to customer data. Survey and data can be centrally located and widely accessible within a company, as opposed to being warehoused in separate departments CDM encompasses the collection, analysis, organizing, reporting and sharing of customer information throughout an organization. Businesses need a thorough understanding of their customers’ need if they are to retain and increase their customer base. Efficient CDM solutions provide companies with the ability to deal instantly with customer issues and obtain immediate feedback. As a result, customer retention and customer satisfaction can show dramatic improvement. 5.7 Examination Questions PARTA 1, Define electronic retailing (E-tailing)? 2. What is EDI? 3. What do you mean by BAR coding? 4, What is integrated system? 5. Write about customer database management system PARTB 6. Briefly explain Electronic article surveillance ~ Electronic shelf labels 7. Define Non store retailing (e-retailing)? Explain the impact of Information Technology in retailing 8, Define BAR coding? Explain its benefits.