lecture 6 information processing in retailing

De La Salle – College of Saint Benilde

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Lecture 06: Information Processing in Retailing

PRESENTED BY:

Ian Agoncillo Pacaña


Agenda

Information Flow in the Retail Business Retail Information System Database Management Data Warehousing Data Mining and Micromarketing UPC and EDI for Gathering Data


How Information Flows in a Retail Distribution Channel

Informationand theSupplier

Informationand theSupplier

Informationand theRetailer

Informationand the

Consumer


Suppliers Need To Know

From the RetailerEstimates of category

salesInventory turnover

ratesFeedback on

competitorsLevel of customer

returns

From the CustomerAttitudes toward styles

and modelsExtent of brand loyaltyWillingness to pay a

premium for superior quality


Retailers Need To Know

From the SupplierAdvance notice of new

models and model changes

Training materialsSales forecastsJustifications for price

changes

From the CustomerWhy people shop

thereWhat they like and

dislikeWhere else people

shop


Consumers Need To Know

From the SupplierAssembly and

operating instructions

Extent of warranty coverage

Where to send a complaint

From the RetailerWhere specific

merchandise is stocked in the store

Methods of payment acceptable

Rain check and other policies


Retail Information System (RIS)

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


A Retail Information System


Retail Pro Management Information Software


Database Management

A major element in an RISSystem gathers, integrates, applies, and

stores information in related subject areasUsed for

– Frequent shopper programs– Customer analysis– Promotion evaluation– Inventory planning– Trading area analysis


Five Steps to Approach Database Management

Plan the particular database and its components and determine information needs

Acquire the necessary informationRetain the information in a usable and accessible

formatUpdate the database regularly to reflect changing

demographics, recent purchases, etc.Analyze the database to determine strengths and

weaknesses


2 Aspects of Database Management

1. Data warehousing A mechanism for storing and distributing

information

2. Data Mining and micromarketing Are ways in which information can be utilized


Retail Database Management in Action

1

2


Data Warehousing

• Collection of data that supports management decision making

• It is a central storage of all or significant parts of the data that a firm’s business systems collect

• The process of defining, populating and using a data warehouse.

• Emphasizes the capture of data from diverse sources for useful analysis and access


Components of a Data Warehouse

1. Physical storage location for data – the warehouse

2. Software to copy original databases and transfer them to warehouse

3. Interactive software to allow processing of inquiries

4. A directory for the categories of information kept in the warehouse


Data Warehousing


Data Mining and Micromarketing

Data mining is the in-depth analysis of information to gain specific insights about customers, product categories, vendors, and so forth

Micromarketing is an application of data mining, whereby retailers use differentiated marketing and develop focused retail strategy mixes for specific customer segments


Gathering through UPC and EDI

Universal Product Code (UPC)o Products are marked with a

series of thick and thin vertical lines

o Retailers can record data instantly

o Improves: merchandizing data gathering inventory management faster transactions reduce errors


Gathering through UPC and EDI cont..

Electronic Data Interchange (EDI)o Exchange of electronic

informationo Improves:

Enhance decision making capabilities

Inventory Control Responsiveness in Demand

o Became even cheaper when the Internet was used as a means for EDI


Question and Answer

Q & A


For next meeting…

– Be Ready for your FIRST LONG QUIZ• Big Test Booklet


References

• Berman, Barry & Evans, Jpel, Retail Management 10th Ed. (Person)

lecture 6 information processing in retailing

Education

information data mining

supplier information

retailer information

flow of information

categories of information

information processing

stores information

information flows