THE RETAIL

INFORMATION SYSTEM
 Applications of IT in Retailing
Automating Processes: Electronic Point of Sales
(EPOS), Inventory Planning, Ordering and Management
Collecting Data About Customers: Purchasing patterns
of customers, segmentation, personalization, customization
of offers, loyalty programmes, store design and product
placements
Feedback on Marketing Decisions: EPOS data to study
effects of promotions, prices, new products and packaging
changes
Communications: With suppliers, customers, internal
Applications of IT in Retailing
(contd.)

Tools to Plan the Business: Software to plan,

budget, forecast. Choose best locations (GIS)
Adding Value to Retail Transactions: IT-assisted
transactions (ATMs) may be preferred by some
customers, self-scanning, in-store kiosks for product
and info. search.
Technologically-enabled Shopping: Internet
shopping
 Benefits of IT in Retailing
Cost and Productivity Benefits
Efficiency of time/transaction speed increases

Reduced queuing times

Operating cost reductions

Increased accuracy of all aspects of the sales

transaction
Improved inventory management

Reductions in stock outs and stock holdings

 Benefits of IT in Retailing
(contd.)
Marketing Benefits
Improved data-effectiveness of promotions, forecast
of sales
Ability to incorporate faster responses to changing
market conditions
Consumer benefits from operational efficiencies
e.g. shorter queues
Can lead to building of loyalty schemes
Additonal selling space coz of reduced
stockholdings
A Retail IT System
 Electronic Point-of-Sale Systems (EPOS)
Electronic Funds Transfer at Point of
Sale (EFTPOS)
 The Universal Product Code (UPC) or
Barcode

Identifies each product down to its SKU

GSI (Formerly European Article Numbering System )
represents membership of 101 countries
First 3 digits: Country code
Next 4 digits: Company code
Next 5 digits: Product code
Last digit: Check digit
 RFID (Radio Frequency Identification Tags):
Wireless barcodes that provide wireless
communication b/w objects & readers; uses
tags that can store data; tracks products/eqpt.
in real time w/o contact or line of sight
 Electronic data Interchange (EDI)

With EDI, retailers and suppliers regularly

exchange information through their computers
with regard to inventory levels, delivery times,
unit sales etc of particular items. Both parties
enhance their decision-making capabilities,
better control inventory and are more
responsive to demand.
 Quick-Response (QR) Replenishment
Systems

When EPOS are combined with EDI, retailers

are in effect adopting just-in-time or quick
response (QR) replenishment methods.
Reduces stock outs and inventory levels,
hence improving service to customers and
reducing costs for retailers.
CPFR( Collaboration, Planning, Forecasting
and Replenishment)
Types of Technology Used in
Retailing-In-store (Illustrative)
Electronic Point of Sales (EPOS)
Interactive Kiosks
Electronic Point-of-Sale Signage
Self-Scanning and Self-Checkout system
Virtual Display Cases
Body Scanning
A Retail Information System anticipates the
information needs of retail managers; collects,
organizes and stores relevant data on a
continuous basis; directs the flow of
information to the proper decision makers.
 Data-Base Management

Procedure a retailer uses to gather,

integrate, apply and store information
related to a specific subject area.
Involves use of customer data bases, vendor

data bases, product category data bases etc.

 Data Bases (Illustrative)
Customer data bases-Purchase frequency,
items bought, avg. purchase, demographics,
payment methods etc.
Vendor data bases- total retailer purchases
per period, total sales to customer per
period, most popular items, retailer profit
margins, avg. delivery time and service
quality
Data Bases (Illustrative)
Product Category Data Bases: Total
category sales per period, retailer profit
margins, percentage of items
discounted etc.
 Steps in Data-base Management

Plan the particular database and its components

and determine information needs
Acquire the necessary information
Retain the information in a usable and accessible
format
Analyze the data base for organization purposes
Update the database regularly
 Data Warehousing

The data warehouse is where information is

collected, sorted and stored centrally
Components of a data warehouse:
1. Data warehouse, where data are physically stored
2. Software to copy original databases and transfer them
to warehouse
3. Interactive software to allow enquiries to be processed
4. Directory for categories of information kept in
warehouse.
 Data Mining

Data Mining: In-depth analysis of information

to gain specific insights about customers,
product categories, vendors etc.
Relies on special software to sift through vast
amounts of info. in a data warehouse to
uncover patterns and relationships b/w
different factors
 Micro Marketing
Application of data mining whereby retailer
uses differentiated marketing and develops
focused retail strategy mixes for specific
customer segments, sometimes fine-tuned
for the individual shopper.
 Types of Information Systems

RIS can be divided into 4 basic types

1. Transaction Processing Systems (TPS) :
Used to facilitate customer transactions and
other routine business processes (e.g. EPOS
systems, payroll and employee record
keeping). Critical to operations. Forms
major input into other systems
 Types of Information Systems (contd.)

Management Information Systems (MIS): To assist

middle managers in their monitoring, controlling and
decision-making activities.
- Provide routine summary or exception reports
(usually from transaction data from TPS indicating
firms current performance) either in the form of a
report or online access.
-Usually involve pre-specified questions, simple
summaries and comparisons.
 Types of Information Systems
(contd.)
Decision Support Systems (DSS): An IS
designed to assist manager in non-routine
semi-structured or unstructured decisions.
-Combines use of models and data from
various sources.
-Allows user to conduct a what-if analyses by
changing the assumptions underlying
various components of the decision
 Types of Information Systems
(contd.)
Executive Support Systems : Designed to
support senior managers responsible for
making strategic decisions- non-routine and
require information about trends in the
external environment as well as internally.
- Incorporates information both from MIS and
DSS and external data about economic,
competitive and regulatory environment etc.