Technology in retailing: Need , Application , Factors influencing technology ,

Technology trends in retail

Store Operations and Management: Role and Key issues of Financial
management in retailing , Evolution of CRM, Measuring Profitability and
monitoring performance of Retail stores
Need
• Time has gone when retailers used to know his customers & his family members by
name.
• Now ,there are numerous products to satisfy needs & numerous brands in each
category
• Customers as well as retailers have increased manifold.
• Personal relationship & interaction led shop loyalty has been replaced by sales
promotion schemes & purchase scheme led loyalty
• In this backdrop the business process as well as store management have become more
challenging & complex. With Such complexities backed with scarcity of time it became
important to implement some mechanism demanded better mechanism . Any Such
mechanism which not only saves time but need to be accurate also
• Hence came the role of technology.
• Technology helps to identify consumers at point of purchase. This
helps retailers to tailor their offers to meet the needs of individual
shoppers.
• The use of technology helps protect consumers privacy.
• Use of technology enhances the shopping experiences by providing
convenience , better services , speed and value to the customers.
• The development of M Commerce enables businesses and
consumers to transact on the go, without having to have access to a
wired computer.
Applications of technology in Retail Industry
Department wise use of Technology in Retailing
• Technology applications in Merchandising
Sourcing- Before sourcing ,the retailer has to decide on the number of
categories , depth , brand range in each category . After that selection
of vendor is done .Finally planning order is required.
Retailer uses technology to gather information about various categories
in trend . They collect their own store purchase data to study the
buying trends. They use internet to collect data ,short list vendors ,
check availability of goods & place order
Stocking / Warehousing – Here the technological element is maintaining data of stock received.
Necessary changes are made on regular basis as per the consumption of the store. A retailer
decides upon the reordering level based on consumption & delivery lead time .Once the stock
reaches that level intimation automatically goes to the purchase department .if a retailer has a
long time association with the vendor than the order can also be directly placed to him
automatically once the stock reaches the reordering level. This is possible through ERP program.
• Store Management
HRM-ATS used for recruitment , Manpower planning is done with the help of systems . Software
is available which shows the total position of the available staff. It can also shuffle the personnel
based on the programming done .
Finance and accounting – system based processes to handle cash flows ,payments & receipts ,
barcoding in which all the codes are saved in the computer memory . Thereon with the
identification of this code the prices are simultaneously tabulated and added up .
A retailer can any time log on to the bank site & access his account details , check clearances of
cheques & deposits thus updating him with his cash in bank.
Plastic money has made purchasing a very easy activity. Credit & debit cards
Cash Drawers
Store Displays – Various effects in lighting can be created through technology that
in turn totally transforms store atmosphere. As a result ,store experience can be
enriched thus stimulating sales. The entire display design can be visualized &
actually seen on the monitor without investing even a single rupee.
Security- CCTV’s , alarm connected with police stations
• Marketing & CRM
• For customer loyalty, customer data is stored in software which helps in
personalized attention. Loyalty cards in which scores are added leading to
attractive gifts /concessions . With CRM software we can identify specific
market segments , which were earlier done statistically by cluster analysis.
These software gives us exact information about buyers preferences , cluster of
similar preferences, current trends which helps in planning market promotion
strategy.
• Data warehousing & Data Mining- IT is being used to collect
information on customer profile ,purchases ,timings of purchase ,
frequency of purchases etc. Data warehousing refers to compiling of
above information into databases . Data mining refers to analysis of
these databases to draw inferences related to customer purchasing
behaviour.
• Customer Interfacing systems- Point of sale systems uses scanners and
barcoding to identify an item , pre stored data to calculate the cost &
generate bill . Tunnel scanning ,where the customer pushes the entire
cart through an electronic gate to the point of sale. In a matter of
seconds , the items in the cart are hit with laser beams & scanned &
billed.
• Payment-
• Internet- removing the need of a consumer physically visiting the store.
Significance /Importance
• Efficient stocking of Merchandise
• Collection of Data
• Efficiency in Operations
• Helps Communication
Advantages
• Reduced Waste
• Increased Productivity
• Fewer Workforces
• Higher Profits
• Higher Income
• Advanced Communications
• More Competitive
• Provides new Dimensions
Disadvantages
• Difficult Management
• New skills needed
• Costly Maintenance
• Time Wastage
• Constantly changing environment
• Privacy and safety issues
• Lack of job security
Factors influencing the use of technology
• Is there a need of technology adoption at all
• Volume of the business /Scale and Scope of Operations
• Nature of the Business
• Availability of financial resources
• Human Resources Available
Applications / Technology Trends
The most prominent forms of technologies used in retailing are as follows:
• Electronic Retailing
• Electronic Data Interchange( EDI)
• Bar Coding Technology
• Customer Database Management
• Radio Frequency Identification (RFID)
• Electronic Fund Transfer
• Vending machines
• Handheld computer devices
• Advanced Planning and Scheduling Systems(APS)
Role of Financial management in Retailing
• Retailing involves a lot of investment in terms of
merchandise , real estate , infrastructure , building
investments and human resources . All this needs to be
managed and optimized for better operational efficiency and
a healthy ROI .
Therefore , it becomes important to understand the various
dimensions of finance mgmt. in the retail scenario.
Key Issues in Financial Management
• Budget Planning:
Detailed assessment of Financial resources available.
Effective and timely use of the resources
• Understanding retail business as a profit centre
• Budgeting and resource allocation
• Strategy Planning
• Performance measures and Audit
Evolution of Customer Relationship Management
• Customer relationship management is an approach to manage a
company's interaction with current and potential customers. It uses
data analysis about customers' history with a company to improve
business relationships with customers, specifically focusing on
customer retention and ultimately driving sales growth
• The art of managing the organization’s relationship with the
customers and prospective clients refer to customer relationship
management.
• All marketing activities directed towards establishing ,developing and
maintaining successful relationship with their customers.
Need for Customer Relationship Management

• Customer Relationship Management leads to satisfied

customers and eventually higher business.
• Customer Relationship Management goes a long way in retaining
existing customers.
• Customer relationship management ensures customers return back
home with a smile.
• Customer relationship management improves the relationship
between the organization and customers. Such activities strengthen
the bond between the sales representatives and customers.
Steps to Customer Relationship Management

• It is essential for the sales representatives to understand the needs, interest

as well as budget of the customers. Don’t suggest anything which would burn a
hole in their pockets.
• Never tell lies to the customers. Convey them only what your product offers.
Don’t cook fake stories or ever try to fool them.
• It is a sin to make customers waiting. Sales professionals should reach
meetings on or before time. Make sure you are there at the venue before the
customer reaches.
• A sales professional should think from the customer’s perspective. Don’t only
think about your own targets and incentives. Suggest only what is right for the
customer. Don’t sell an expensive mobile to a customer who earns rupees five
thousand per month. He would never come back to you and your organization
would lose one of its esteemed customers.
• Don’t oversell. Being pushy does not work in sales. If a customer needs something; he
would definitely purchase the same. Never irritate the customer or make his life hell. Don’t
call him more than twice in a single day.
• An individual needs time to develop trust in you and your product. Give him time to think
and decide.
• Never be rude to customers. Handle the customers with patience and care. One should
never ever get hyper with the customers.
• Attend sales meeting with a cool mind. Greet the customers with a smile and try to solve
their queries at the earliest.
• Keep in touch with the customers even after the deal. Devise customer loyalty programs
for them to return to your organization. Give them bonus points or gifts on every second
purchase.
• The sales manger must provide necessary training to the sales team to teach them how
to interact with the customers. Remember customers are the assets of every business and
it is important to keep them happy and satisfied for successful functioning of organization.
Measuring profitability of Retail Store
Retail Profitability depends on :-
• Foot Falls
• Conversions
• Bill Size
Measures of Performance
Financial performance is an indicator of the health of the organisation.
Analysing financial performance is necessary for the following reasons .
• To help identify the gaps in the targets.
• To identify the opportunities for improvement and
• To evaluate the past and present performance
Like any other business, for retail too, there are two basic methods of
evaluating financial performance. The first is the Income statement or the
profit and loss statement. (Indicator of profitability). The second is the
Balance sheet ,(indicator of turnover).
Monitoring Performance of Retail Store
1. Relevance of Sales per square feet in retail – Upward/ downward trend
Reasons for poor SPF:-
• Poor product/Merchandise Mix
• Insufficient floor inventory(empty shelves, missing sizes)
• Uncompetitive pricing
• Poor sales & customer service personnel
• Poor location & non optimal store hours
• Poor store layout and design
• Insufficient & poor marketing
• Fixed consumer perception
2. Return on Investment –
• ROI = Net income / Book value of assets
Sales per square foot
• Sales per square foot is an indicator of sales efficiency. The formula for it is:
Sales Per Square Foot = Sales / Square Feet of Selling Space
• How it works/Example:
For example, let's say Company XYZ sold $15 million worth of clothes last year in its 10
stores. Each store is about 3,000 square feet, for a total of 30,000 square feet.
Using this data and the formula above, we can calculate Company XYZ's sales per square
foot:
$15,000,000 / 30,000 = $500
• Why it matters:
Sales per square foot is an indicator of how efficiently a company uses its assets to make
sales. For this reason, the higher the sales per square foot, the better.
The measure is particularly popular in the retail and grocery industries,
where analysts study which locations and layouts are most profitable.
*******************************
• https://smallbusiness.chron.com/effects-crm-retail-markets-70890.ht
ml