The importance of technology to retail is beyond doubt. Over the years many applications of technology have developed. These applications have made a deep impact on the way retail business is conducted. Here we examine some of the applications of technology which are relevant to retailers.
Electronic data Interchange (EDI)
EDI is defined as the exchange of business information, through standard interfaces by using computers. It can also be interpreted as transmission of business data between organizations in a computerized format that does not require the re-keying of information. Since EDI is defined as the exchange of electronic documents between organizations the EDI acronym has also been sometimes interpreted as Electronics Document Interchange.
EDI is at the core of the overall concept of Electronic Commerce (EC). The advantages of the use of EDI are listed below:
1) It saves time, as transmission of data can be immediate if there is an EDI exchange between a retailer and its supplier, the supplier at his end can spot trends in purchase and accordingly realign production.
2) A manual error, which may arise while keying in data, is also avoided.
3) It reduces costs involved in paper handling, filing, storage and mailing.
4) It serves as a tool for strengthening the relationship between the retailer and the supplier.
5) Large retailers have long believed in the power of electronic communication with their supply chain partners. Since the advent of Electronic Data Interchange (EDI), these retailers have been steadily investing in such systems. By adopting B 2B / EDI retailers and wholesalers are able to harness substantial tactical and strategic benefits over a short period of time.
Database Management, Data Warehousing data mining
A simple purchase at any retail store can enable the store to gather vast amount of information about its customers and products. The use of systems to organize, retrieve search and manage that data is termed as database management. Data can be with respect to products, customers, vendors and suppliers or a combination of them put together.
Elements of database management are data warehousing and data mining. Let us take the example of customer who buys a pair of cotton chino trousers from a large departments store chain in Mumbai. The customer is also a member of the loyalty program run by this chain and visits the store frequently.
By swiping the customer loyalty card at the time of purchase, an entire information system starts functioning. The store’s computer sends the information to the company’s central computer which usually hosts the data warehouse. From this data warehouse, the organization is able to retrieve data that will give important information about the purchase made, he total number of purchases made, the color size and demographic data of the customer.
The data warehouse is at the core of the system that enables the retailer to gather, manage and utilize the information needed by him to remain in today’s fast changing marketplace
The manner in which companies do business and interact with their customers has changed rapidly over the years. It is now necessary to track changes in consumer demand as consumer loyalty to a retail store cannot be taken for granted. Taken from the term mining, which means digging out something from the earth, data mining refers to the extraction of data for specific applications with the sue of technology. The concept of data mining is not new, as for many years statisticians used and integrating it with a data warehouse enables the availability of data in a manner relevant for various businesses. Data mining can help extract information form a database that the user did not know existed. Finding a relationship between variables and customer behaviors that is non intuitive is what data mining hopes to find
The information unearthed by data mining can also help the customer relationships management process (CRM). By identifying specific market segments and their buying behavior it is possible to develop campaigns, promotions and offers which are aligned to the needs wants and attitudes of the customer thereby offering value as perceived by the customer.