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IT Enabling your Retail Business

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PCQ Bureau
New Update

The retail industry has been growing at a steady pace presenting more and more strategic & business opportunities everyday. These opportunities play a vital role in attracting customers and retaining the customer base to stay ahead in competition. When IT gets in action in retail sector with solutions such as barcoding, inventory management, BI solutions to electronic POS systems, the prime focus is to attain & attract more customers while keeping the costs low. These values comes into picture by taking advantages of new sales channels, marketing & promotions, etc.

We can classify the activities of the retail sector into: food retailing, automotive services & retailing, personal goods stores & non store retailing that includes vending machines, etc.

In this story we would be discussing different functions, their needs and types of retail businesses and the role of IT in retail.

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Why should retail sectors automate?

Nullifying the errors and improved efficiency are the two key factors by the result of which retail organizations benefit by automating the business processes. Not only this, better and informed decision making capabilities has improved with real time information available to retail companies.

With automation, retailers are able to effectively track the customer information so as to provide better & uninterrupted services to the customers round the clock.

Retailers are no less in exploring the Internet world. Retailing over the Internet enables their businesses to be available 24/7. Moreover online retailing draws larger audience spread across the globe. Customers are given freedom to customize, browse online catalogues, choose from a wide variety of options without having to leave their homes or offices. Also customers get the best deals and discounts through online retailing.

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Types of retail business

Supermarkets: With the enormous range of products available under one roof, IT solutions are relied upon heavily in such large scale operations where a number of logistics have to be taken into account. POS plays a highly important role and is the primary gateway between the supermarket and customer service.

E-tailers: Retailers providing online buying and selling of products and services have noticed a surge in the last couple of years. The internet plays a huge role by providing a medium to the customers. E-tailers primarily use comparison shopping, data feeds, aggregation mechanisms and end user customization to set it apart from physical retailers.

Departmental stores: General retail merchandisers offering products and services at lower prices to consumers tend to use barcode readers at checkout counters and inventory management plays a large part in organization of products.

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Shopping malls: Shopping Malls offer customers different types of products and services under a single roof. IT deployment can be found throughout the mall from the electronic cash counters to the RFID (Radio Frequency Identification) ensuring smooth functionality and automation.

Discount stores: Factory outlets give discount on the price and maintain a direct link with the manufacturer through the use of various IT systems. The supply chain system monitors the store level demand and inventory and accordingly stocks the products.

Different functions in retail

Inventory management: Inventory management describes the method which is used to keep a track of stocks in retail business. We can define it as a program that allows the management of sales, payments and purchases. By deploying retail software or an inventory management system can help your business in identifying what you have, what are your needs and when you need thus helping you run a efficient business.

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Integrated with BI, inventory management system has the capability to keep a track of the items that are in demand and the items which are not. This helps in making a better decision making as it identifies the hottest and coldest items. It also helps in differentiating between slow moving items and items that are purchased frequently which helps in grouping them, pricing the slow moving items and other issues.

Role of BI in retail sector: The BI systems or analytics along with operational systems such as POS forms two fundamental categories in a typical retail IT infrastructure. The operational systems such as ERP, POS, etc can provide retailers with right information the right time. BI systems combines data management with predictive analysis such as data mining, forecasting, optimization. BI offers the retailer with insight and thus help run their businesses more efficiently.

Standard ERP/CRM : The basic needs of a retailer who deploys ERP solution can be classified into two. First, to have an enterprise wide platform and second, to have a transaction management system. So in order to fulfill these needs many of the ERP vendors focus on developing retail ERP solutions that can help in consolidating all the functions. The retailers want that the entire solution should incorporate POS, supply chain, inventory reporting, billing management, etc. Now with the use of ERP system in place, it focuses more on retail centric components that fulfills the requirements of a retailer or a retail organization. With such a wide range of segments in retail sector that differs in nature & scope of operations, retail ERP package has the capability to meet the needs of such segments. Not only this, tasks such as track of inventory, stock, sales, MIS reports, etc are also handled with this.

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CRM systems: We all know that CRM solution helps in managing and building relationship with the customers using different methodologies and technologies. CRM solutions help in building relations with the customers by tracking their interests, their needs and their buying patterns.

POS terminals: POS or the point of sale terminals can be described as cash register replacements. They are the systems that has the ability to track, record customers' information as well as process and verify credit card transactions. For businesses such as outdoor sales kiosks etc, small options like wireless POS modules, credit card readers, etc are handy as they help them to record and process credit card transactions.

A retail point of sale system comprises of components that includes a computer, monitor, bar code scanner, cash drawer, etc. Nowadays, a complete or all in one unit fulfills the requirement as the POS monitors use touch screen technology and computers are built into the monitor chassis that also helps in saving counter space for retailers. The software is designed in such a way that it is capable of handling different customer based functions such as sales, returns, loyalty programs, discounts, etc. We can also categorize the POS system into two, the first unit handles the sales information for reporting purposes, sales trends, cost analysis,etc, while the other comprise of 'back office' computers. An accounting interface is also used, to feed the information related to sales & cost of goods in many retail POS systems.

Bar code readers: The bar code readers are basically hand-held or stationary input devices. They are also known as price scanner or point-of sale (POS) scanner & their functionality is to capture and read information that is contained in a bar code. A unique identity is provided to all the products so that after scanning the product, details like price, weight & other details are gathered. This information helps to keep track of total sales, inventory list, etc when the information is entered into the systems. Barcodes have completely redefined the system of tracking sales & thus helped in increasing the integrity of POS transactions. They also help in saving time, cost and effort and at the same time helps in maintaining accuracy with less possibility of errors.

Madhur chawla and Ankush Mahajan

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