Impact of Technology in Retail Industry

Technology in the retailing industry has provided a new dimension. The introduction of point of sale equipment, bar codes and huge storage capacity for billing and payment database has facilitated the management of large set-ups with ease. Operations can be recorded in a structured and systematic manner, providing detailed analysis of the sales and volume of transactions. Electronic transactions have increased the volume of sales in the country. Flexibility in the mode of payment and cashless transactions has helped in driving sales. Communication assists in maintaining a competitive advantage in retaining and attracting customers. The introduction of new technology may be intricate for retailers, but the convenience and cost effectiveness create the need for new advancements. Large stores need to monitor inventories and expenses of establishments. With automated machines and high-end computers making the task simpler, the focus of retailers can stay on retaining customers with new strategies. Security systems also do help for a safer shopping, for retailers as well as customers, providing immense mental relief. Such technological advancements are only now coming into India and the need for it has been acknowledged. The point of sale (POS) applications will provide for quicker consumer check-out and multiple payment options like credit cards. Solutions ranging from simple Point of Sale (PoS) systems to complex retail ERPs have been implemented mainly by large, mid-sized and manufacturer-retailers in India. Using ERP packages and solutions like Retail Pro, higher-end solutions like JDA, SAP IS Retail or Retek facilitate backend operations.

Along with business optimization software, mobile computing and B2C concept assist retailers to cut cost and increase efficiency, but these solutions are mainly targeted at big retail stores with chains in India. Though these solutions have been implemented, returns on these investments take a longer period. The emphasis of retailers are now in utilizing IT solutions like CRM, OLAP, CPFR tools to carry out the behavioral analysis to stay in the competitive market. Retail ERP packages have been implemented by large retailers but today they are experiencing difficulty in utilizing it fully, one of the key reasons could be the lack of adequate training. But it is expected that the demand and utilization of these packages will grow in the near future. It is estimated that about 400 to 500 mega bytes of data are transmitted daily between point-of sales counters and corporate headquarters of retail chains in developed countries. Relay of transaction data in such volumes helps to maintain a close working relationship between retailers and vendors to predict consumer demand, shorten lead times, reduce inventory holding and thereby save cost. Retailing database also helps in tracking purchase behavior through demographic and psychographic information. This clearly is an indication of technology serving as an effective means to build the retail business and not just restricted to supporting and improving the operational efficiency. Use of electronic communication like e-marketing could well be a cost-effective form of attracting and retaining customers. With internet penetration and awareness on the rise in the country, e-marketing does prove to be a good communication tool. Use of technology could further be extended to home shopping, direct mails and telemarketing. It can also facilitate growth in newer applications like kiosks, intelligent vending machines, PC net shops, etc.

Source: Scribd.com

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]

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