IMPACT OF IT IN RETAILING

IMPACT OF IT IN RETAILING Unit 5SyllabusNon store 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. Legal aspects in retailing. Social issues in retailing. Ethical issues in retailing.

Retail StoresAstorethat sells smaller quantities of products or services to the general public. A business that operates as aretailoutlet will typically buy goods directly from manufacturers or wholesale suppliers at a volume discount and will then mark them up in price for sale to end consumersRetail stores can be broadly classified into two categories, i.e. store based retailers and non-store based retailers.A. Store based retailerB. Non-Store Retailing

Store based retailerI. On the basis of ownership1. Independent retailer: An independent retailer is one who owns and operates only one retail outlet. Such stores can be seen under proprietorship.Local Kirana store, panwala, clothe merchant, and some modern small-sized stores and showrooms are examples of independent retailers.

2. Chain Retailer:It is a type of ownership in which two or more retail outlets are under common ownership. It is also known as corporate retail chains. The stores exhibits similarity in term of merchandise they sell, advertising, services, etc. For example, Arrow of Arvind Mills, Wills Sport of ITC, Shoppers Stop, Food World, etc.3. Franchise: A franchise is a contract or agreement between franchiser (company or producer) and the franchisee (retailer) to conduct business under the established name as per specific business format. There can be two type of franchising trade mark franchise and business format franchise. Archies stores, Pizza Huts, Subway, McDonald, etc., are example of franchise retailing.

4. Leased Departments: When a retail department is leased or rented to an outside party, it is turned as leased department. Many malls, departments, multiplexes, etc., are operating on lease5. Consumer Cooperatives: Consumer cooperatives or consumer cooperative societies are owned by their member consumers. They run on cooperative basis. Sahakari Bhandar and Apana Bazaar in Mumbai, Super Bazaar in Delhi, Kendriya Bhandar by the government, etc., are example of consumer cooperatives.

II. On the Basis of Merchandise offered1. Convenience Stores: Small retail stores offering essential goods which remained open for long hours and all the days of week and located near residential areas are referred to convenience stores. They sell bread, milk, grocery products and other essential items.2. Supermarkets: They are large in size, self-service operations, and based on high volume and low margin. They sell food, healthcare and beauty care products, groceries, and other non-food items. Nilgiris, Food world, Food Bazaar, and others are major supermarkets in India.

3. Hypermarket: It is a combination of supermarket and departmental stores. They offer variety of food and non-food items like clothes, jewellery, hardware, sport equipments, cycles, motor accessories, books, electronics and electrical appliances, etc. They offer products at cheapest possible prices. Carrefour, Wal-Mart, Meijer, Target, Tesco, etc., are famous supermarkets. Big Bazaar, Star India Bazaar, Giant, etc., are example of Indias supermarkets.4. Specialty Store: This retail store specializes in a particular merchandise or single product of consumer durable like furniture, jewellery, household goods, consumer electronics, sport goods, fabrics, etc. Proline Fitness Station and Gautier Furniture are big players in India.

5. Departmental Store: It sells different types of goods all under one roof. Along with products, they also offer new customer services like reading rooms, restrooms, home delivery, wrapping services, etc. Some of major departmental stores in India include Shoppers Stop, Globus, Websites and Lifestyle, etc.6. Off Price Retailers: They sell merchandise at less than retail prices. They buy from manufacturers the seconds, overruns, and off seasons at a deep discount. Such stores are owned by manufactures or departmental stores. Pantaloon Factory Outlets and Levis Factory Outlets are example of off price retailers.

7. Catalogue Showrooms: Normally, they specialize in hard goods like house ware, jewellery, and electronics. Customers walk into the showroom and refer catalogue of products they want to buy. Sometimes, they have to write the product code number on a chit and handover to salesmen.

B. Non-Store RetailingA direct relationship of the retailer with his customer is on the basis of non-store Retailing. In India around twenty percent of retail sale is from non-store.There are several forms of non-store retailing:i. Direct Sellingii. Mail Orderiii. Telemarketingiv. Cyber Marketingv. Automated Vending

Direct Selling: It consists of making direct contact with the end consumers at home, at work, at office, or at any convenience place. Cosmetics, jewellery, garments, foods, home appliances are sold directly to customers. For example, salesmen can sell these products to consumers. It also includes network marketing in which every the consumer is both a consumer as well as a seller.Mail Order Retailing: Here, customers demand for products of specific description through mail and are delivered the products at their places.Cyber Marketing or Electronic Shopping: It is also known as online or Internet marketing. Transactions are made by Internet. Full detail is placed on the web.

Telemarketing: Order for the product is placed by phone and/or cell phone. Television shopping is also a type of telemarketing. Products are displayed and demonstrated on television. Full description of products is shown on TV and phone numbers are provided for each city to place order.Automated Vending: Customer can access the products round the clock. It is suitable for soft drinks, ice-cream, coffee, candy, cigarette, newspapers, etc. It is not very famous in India. Tea and coffee is offered by this mode at the airport in India. ATM (the automated teller machine) by banks is popular example of this type of retailing.

The range of direct marketingtechniques

15Advantages of non store retailingIts freedom from a physical retail presence.The high fixed costs of operating retail outlets are eliminated.The breadth of customer coverage is considerably wider than is possible with an individual retail location.Companies do not have to spend large sums or dilute stock building new locations, or acquiring them.This truly gives the non-store retailer a global market from a cheap, centralized location.16Disadvantages of non store retailing.There is also the fear of credit card abuse and mail fraud, both related to the sense of detachment that not holding a prospective purchase brings.

And since most of us do not have the luxury of a pricey T1 Internet connection, we must still deal with painfully slow connections.17The Impact Of IT In The Retail SectorWith the increasing globalization of retailing, both in terms of their points-of-sale and their points-of-supply; the information technology (IT) spend in the retail sector has increased significantly. IT plays an increasingly important role in the management of complex retail operations.Market knowledge, as well as control of data and information, is key to obtaining a competitive advantage in the retail sector. Markets are continuing to grow and become more complex; the simple process of retailing has started to deploy more advanced retail information systems to cope with all the transactions involved.

Retailers need to transform their IT capabilities for multiple reasons, includingTo increase the companys ability to respond to the evolving marketplace through enhanced speed and flexibility.To collect and analyze customer data while enhancing differentiation.To work effectively; retailers need one system working across stores (or even across national borders) to make sure the most effective use of stock and improve business processes.

The retail industry faces many specific challenges related to IT management, including:Customer data: Many retailers struggle with information overload because theyre required to collect and sift through mass amounts of data, then convert it into useful information in a customer-centric industry.Transparency and tracking: Retailers must increase transparency between systems, as well as obtain better tracking to integrate systems from manufacturer through to the consumer while obtaining customer and sales information.Global data synchronization: Due to radio frequency identification/electronic product coding, the entire supply chain has become more intelligent. Retailers must enable the use of real-time data to watch inventory levels. In addition, radio frequency identification tagging positions the company to be able to safeguard its shipments by allowing products to be tracked from manufacturer through the entire supply chain.PCI Security Compliance: PCI Security Compliance addresses the retailers internal security setup and practices, in order to mitigate payment security risks. Every business engaged in credit card payment processing is required to comply with PCI Security Standards. If a retailer collects or stores credit card information that becomes compromised, the retailer may lose the ability to accept credit card payments. Other possible consequences include lawsuits, insurance claims, cancelled accounts, and government fines.

Note: PCI Payment Card Industry IT Implemented in Retail stores EDIBar CodingElectronic article surveillanceElectronic shelf labelsCustomer database management system

Legal aspects in retailingPeople perspectiveEmployees State Insurance ActPayment of Bonus ActPayment of Gratuity ActEmployees Provident FundThe Minimum Wages ActThe Workmen Compensation ActThe Payment of Wages Act

Legal aspects in retailingOperations perspectiveThe shops & establishment ActThe prevention of Food & Adulteration LicenseIndustrial Disputes Act Consumer Protection ActEssential Commodities ActThe standards of Weights & Measurement ActLegal IssueA person who is responsible for the operation of a single retail store or a multiple number of retail stores has to be aware of various laws and regulation.LegalIssues in RetailingShops AndEstablishmentActConsumerProtection Act,1946Prevention of Food AdulterationIndustrial DisputesAct,1947Industrial EstablishmentAct,194626Consumer Protection Act,1946Name and Address of Manufacturer

Net quantity of the package (NOT GROSS OR WEIGHT WHEN PACKED)

If sold by number contained in the package should be displayed on it

MONTH and YEAR of manufacture, the number contained in the package should be displayed on it.

In case of food items , BEST BEFORE or EXPIRY DATE

MRP inclusive of taxesPrevention of Food AdulterationLicense issued by REGIONAL FOOD & DRUGS ADMINISTRATION DEPARTMENT, HEALTH OFFICER

Validity period of 5 years

PFA license has to be obtained for each store and separate licenses have to be obtained sale like that, milk &milk product, baked item, eggs, frozen food, beverages, fast foodShops and Establishment ActObjective: provide statutory obligation and rights to employees and employers in the unorganized sector of employment

License issued by LOCAL MUNCIPAL CORPORATION, and the application can be made only after the operation of the shop commerce

It requires the maintenance of registers and records and display of notices Industrial Disputes Act,1947It defines industry, industrial dispute, layoff, lockout, retrenchment, trade union, strike wages, workman, etc.Under this Act:The notices of changes in employment conditionThe strike and lock-out proceduresThe proceedings for retrenchmentThe retrenchment compensationThe lay - off compensationThe unfair labor practiceThe closure proceduresThe rights of appealThe penaltiesIndustrial Establishment Act,1946Objective: Regulate the conditions of recruitment, discharge, disciplinary action, holidays, etc.

Under this Act is applicable to industrial establishments where in 50 or more workmen are or have been employed in the preceding 12 month

Central and state government can make this Act applicable to less than 50 person, as in the case of UP and WEST BANGAL