Transcript Retail Operations Week 7

FM10211 – Retail Operations
Week 7
Ch 10:Technology in Retail Merchandising
Term Project
• Pick a store or department
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Customer profile
Retail structure
Goal setting
Sales incentives
Shrinkage controls (Loss Prevention)
Customer service
Management style
Merchandising methods
Technology
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Impact of Technology on Retail
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Most important environmental factor
Allows retailers to connect to manufacturers
Allows manufacturers to connect to suppliers
Has made service a priority
Increases efficiency
Provides information
Improves the quality of decision-making
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Tech at the Manufacturing Level
• Three roles
– Production
– Distribution
– Selling
• Manufacturers must use tech to compete
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Technology in Production
• Just-in-time (JIT) ordering/production
– Lessen inventory by
• Ordering for production
• Producing to order
• Computer-Aided Design (CAD)
• Computer-Aided Manufacturing (CAM)
– Speeds-up process
– Increase accuracy
– Just grading and marking, on up to cutting & robots
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Technology in Production II
• Agile manufacturing
– Special orders can be produced on line
– Instead of piece meal, i.e. one at a time
• Mass customization
– Individualized sizing in regular production
– Ex. Lands’ End
• Virtual factory
– Can produce one line across various locations
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Technology in Distribution
• Electronic data interchange (EDI)
– Standard communication/ordering system
– Between retailers and manufacturers
– Faster response to consumer demands
• Quick response (QR)
– Shortens getting product from design to consumer
– Uses EDI
– Response to imports
• Can produce here faster than shipping overseas
– Automatic replenishment
• Maintain a model stock program
• Order as items are purchased
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Technology in Selling
• Sales reps have more info
• Digital samples
• E-mail
– Fast communication
• Narrowcasting
– Serving one customer’s needs in a very specific way
– e.g produce a catalog specifically for a customer
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Technology at the Retail Level
• Retailers use similar tech to manufacturers
• Usually not technology leaders
– Grocery retailers are the exception
• Most successful retailers do use technology
• As of 1995:
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Wal-Mart
JCPenney
Sears
Many more now
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Retail link
• Wal-Mart customized QR system
• Linked to suppliers
• Suppliers are given
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Point-of-sale data by SKU and store
Warehouse movement
Forecast analysis
Etc.
• Suppliers can use data to customize assortments
– By region or store
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Point-of-Sale and Control
• Track inventory and sales
– Increase profits
• Universal product coding (UPC)
– Bar coding of Universal SKU #
• Manufacturer,brand, style, size, and/or color
• Part of Product Data Management (PDM) System
– Up-to-the minute information
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Decisions about markdowns, reorders
Control inventory
Historical product performance
Sales and labor analysis
Open-to-buy
– Speeds up the product development cycle
• Fast feedback
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Internet Retailing
– Online retailing on the World Wide Web
– Biggest retailer?
• Amazon.com
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Growing very quickly
Used for selling and educating
Create your own website?
Many possibilities
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Television Shopping
• Home Shopping Network and QVC
• Customers can not try on goods
– Hesitant to buy
– High return rates
• Certain items more appropriate
– Jewelry
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Interactive kiosks
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Free-standing computerized units
Usually in the retail environment
Provide information about products
Inventory status
Online ordering
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Wireless Communication
• Wireless ordering
– Old Navy stores
– Associates relay needs to stockroom
– Never leave the sales floor
• RFID – Radio Frequency ID
– Tracking device embedded in product
– Tracked from manufacturer through sale
– German firm recently prohibited from putting in
frequent shopper card
– Scary?
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