Unit -5

Impact of information technology in

retailing
• Non-store retailing, impact of information
technology in retailing- integrated system
and networking, EDI- bar-coding-electronic
article surveillance-electronic shelf labels-
customer database management system.
Legal aspects in retailing. Social issues in
retailing. Ethical issues in retailing.
 Introduction
• The greatest tools in the hands of the
retailers is the right data, in the right form at
the right time. For example : a customer at a
department store, after selecting some goods
he proceeds towards the billing counter. The
billing clerk scans each products at the point
of sale.
 Non-store retailing ( E-retailing)
• The selling of goods and services outside the
confines of a retail facility is called non-store
retailing. It is a generic term describing
retailing talking place outside of shops and
store.
• The sale of goods and services through the
internet is called electronic retailing or e-
retailing. It can include business to business
and business to customer sales.
 Features of e-retailing
1. It provides online catalogue for goods.
2. It can be linked to the order process.
3. It provides the provisions of a search engine
for product.
4. It ensures shopping through card.
5. It helps in automatic price update.
6. It helps to contract person online.
7. It provides order status checking facility.
 Advantages of e-retailing
1. It reduces the space occupied by retail outlets in the real
world.
2. It gives and easy to a shopping space at any time and
from any place where there is access to the internet.
3. It is efficient retail method for business transaction.
4. It is more different promotional platform.
5. It is easy for customer to locate business.
6. It provides better information.
7. It provides competitive pricing.
8. Customization is possible
 Dis- advantages of e-retailing
1. May lack know how and technology.
2. Substantial set-up, invest and ongoing costs.
3. It involves complex logistics.
4. It is less powerful than personal setting.
5. Less impulse purchase.
6. It may lead to legal problems
7. Difficult in after-sales care.
 The impact of information technology in
retailing
• Information technology refers to the technology of
the production, storage and communication of
information using computers and micro electronics.
• Information technology is concerned about both the
equipment used to produce, store and communicate
information as well as the application aspect of IT,
usually. IT is referred to in terms of ‘hardware’ and
‘software’ or ‘communications’. But here the context
of IT will be with reference to how it can be used to
help solve and retail business problems.
• Technology has been an area of intense focus
in retail industries as a way to accomplish bth
goals.
• Technology has improved areas such as:
1. Supply Chain Management
2. Inventory management.
3. Customer experience
4. Loss prevention.
Impact of information technology on cost, productions
and marketing (benefits)
Cost and production benefits Marketing benefits

Efficiency in time with increase in Improved data handling process of stock,

transaction speed promotion activities etc..

Reduction in queuing time Faster distribution system cycle

Reduction in operation costs Benefits by improved trading part retail

More efficiency in stock holding Able to build database on consumer

Possible to make price modifications Passing on benefits of office in operation

wherever necessary to consumer
Integrated systems and networking
• System integration :
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:
Networking is creating a group of acquaintance is
associates and keeping it active through regular
communication for mutual benefit.
 importance
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 information helps to
reduce production time.
2. Managing finance:
It helps in a) store expense management b) revenue
management c) ensure complete real time utility. D)
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…
4.Operations efficiency:
The information technology is the basic 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.
5. Effective communication:
Communication within the organization can be faster with the use of software. Retail
stores can communicate with each other and with the warehouses. EDI can also be
used for communication with the systems and vendor.
6. Business intelligence:
It helps to improve business agility, visibility and decision- making. Analyze sales and
items movements data to understand demand, optimize staffing levels and
improve inventory terms.
 Electronic data Interchanging(EDI)
• EDI is an electronic communication system. It provides
standards for exchanging data via any electronic means.
By adhering to the same standard, two different
companies, even in two different countries, can
electronically exchange documents.
• EDI can be formally defined as ‘the transfer of structured
data, by agreed manage standards from one computer
system to another without human intervention’’.
• For example: purchase orders, invoices, shipping notices
etc.
 benefits
1. It helps to improve retailer efficiency because of
enhanced merchandise being available.
2. It will speeded up the ordering process and also helps in
providing information.
3. Enables the retailers to have higher stock turnover rates.
4. Helps to lower the administrative costs and expense.
5. It ables to process and deliver orders in time.
6. It will incur lesser spoilage and shrinkages costs.
7. Especially in case of food products, able to provide fresh
products to customers.
 BAR CODING
• Bar coding is using barcode symbols to
identify an item. It is the most common form
of automatic identification used in automatic
data capture technologies. It helps in tracking
retail goods.
• A barcode is an optical, machine readable,
representation of data. The data usually
describes something about the object that
carries the barcode.
 Getting started with barcodes
• Working with barcodes and scanners can speed up
process and increase accuracy. If you are a small retail
or a company that sells product to other vendors your
needs are similar with one exception. If you sell a
product to which you own the rights, you have to get a
universal product code (UPC) number you can apply
for a number. If you are a small retail that sells
products that already have bar coder or you plan to
use your own bar-coding system, applying for a
universal product code(UPC) number is not necessary.
The requirement to start using barcodes are

• Barcode generation
• Printer
• Scanner
• POS software.
 Electronic article survelliance
• Electronic article survelliance( EAS ) is a
technological method for preventing removal
of properties from other office buildings, shop
lifting from retail stones. Pilferage of books
from liabraries etc. these systems are
designed to help retailers boost their sales and
protect their profits by increasing open
merchandising opportunities while reducing.
Shop lifting and internal theft.
Types of electronic article survellaince

• 1.magnetic system
• Acoustic magnetic system
• Source tagging
• Radio frequency system
• Microwave system
 Electronic shelf labels
• Electronic shelf labels systems is based on high frequency radio
technology with two way communication capabilities ensuring
that price changes are fast and accurate. It is a modern system
used by retailers for displaying product pricing on shelves and
these are attached to the front edge of retail shelves in ESL
units are typically compact credit card sized devices designed to
replace traditional paper shelf labels or individual sticker
pricing.
• Changing thousands of paper shelf labels per week is a costly
and a lengthy exercise. Since the prices are updated manually.
There is always scope for error, besides the process being
cumbersome and consuming precious time.
Consumer database management system.
• A database can be referred to as a customer list with added
information regarding their characteristics and the
transactions made by them.
• Customer data management is the ways in which business
keep track of their customer information. They survey their
customer base in order to obtain feedback. It embraces a
range of software or cloud computing applications.
• It is designed to give large organizations rapid and efficient
access to customer data. Businesses need a through
understanding of their customers needs. If they are to
retain and enhance their customer base.
Internal data External data

EPOS data Profiting tools

Customer data Market research

Customer service Third party data

Financial data Competitor information

 Legal aspects in retailing
• The legal system comprises of order and guidelines
usually enforced through a set of institutions. It clearly
elaborates the right and responsibilities in a variety of
ways and also shapes politics, economics and society in
numerous ways.
• Retailer’s relations with suppliers, competitors.
Consumers and employees are governed by appropriate
laws. Legal restrictions are imposed on practices
concerning pricing, product, promotion, distribution
trademarks and HR policies.
• The legal formalities of global companies are as follows:
1. Name approval: the 1st step in getting your company
registered is the approval of name for the company.
2. Name and address of the members
3. Authorized capital of the company.
4. Main objections of the company.
5. Directors identification number ( DIN )
6. Digital signature certificate (DSC)
7. Memorandum and articles of association.
8. Documents required to liked with registrar of companies.
 Main purpose of legislation
1. To prevent unfair competition among
business
2. To protect consumers from unfair retail
practices.
3. To protect the large interest of the society
against uncontrolled business behaviour.
Social issues and ethical issues in retailing
• Social issues:
The impact of globalization on the socio-cultural factors can be
seen in the consumer lifestyles, beliefs, values, business
norms and approaches, cultural and social norms and
languages.
The visible changes occurring in the social and cultural life of
the Indian consumers are given below:
1. Increase in the access to television across both the rural
and urban.
2. (able connection has helped in bridging the gap between
India and other developed economies).
• Over the last few years there has been rising expectation
from the business toward society no longer can the firm
consider itself as the independent entity regardless of the
interest of general public.
• Business today have realized that in order to continue
thriving they have to adopt more holistic and inclusive
business model which has direct correlation with business
performance.
• This is possible when they incorporate the concept of
corporate social responsibility that will help them to focus
on transparency and accountability.
 Ethical Issues
• The typical ethical issues in retailing are related to
deceptive advertising, in proper labelling, malpractices
and unfair trade practices.
• Advertising is a vehicle through which the marketer seeks
to communicate, inform, appeal and guide consumer in
their decision making process but at times, the advertiser
will mislead the viewer by importing incorrect
information.
• An unfair advertising is one I which the advertiser with
holds information which may result in causing harm to the
consumer.
 Following information be disclosed on the
label of the product:
A. Name of the manufacturer, date of
manufacture
B. Date of expiry
C. Net weight of the product.
D. Maximum retail price.
 Some of the ethical issues include the
following
• fair practices of merchandise buying and selling practices in the
firm.
• They need to be socially responsible
• They need to have environmental concern.
• They should undertake activities that are beneficial to the
society.
• They need to take measures for waste reduction.
• They need to recycle the materials used.
• They must switch to environmental friendly packaging
materials.
• Follow the legal aspects of the country.