1. Ch 10:Technology in Retail Merchandising
FM10211 – Retail Operations
Week 7
Ch 10:Technology in Retail Merchandising

2. Term Project Pick a store or department Customer profile
Retail structure
Goal setting
Sales incentives
Shrinkage controls (Loss Prevention)
Customer service
Management style
Merchandising methods
Technology
FM Retail Operations

3. Impact of Technology on Retail
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
FM Retail Operations

4. Tech at the Manufacturing Level
Three roles
Production
Distribution
Selling
Manufacturers must use tech to compete
FM Retail Operations

5. 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
FM Retail Operations

6. 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
FM Retail Operations

7. 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
FM Retail Operations

8. 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
FM Retail Operations

9. 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:
Wal-Mart
JCPenney
Sears
Many more now
FM Retail Operations

10. Retail link Wal-Mart customized QR system Linked to suppliers
Suppliers are given
Point-of-sale data by SKU and store
Warehouse movement
Forecast analysis
Etc.
Suppliers can use data to customize assortments
By region or store
FM Retail Operations

11. 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
Decisions about markdowns, reorders
Control inventory
Historical product performance
Sales and labor analysis
Open-to-buy
Speeds up the product development cycle
Fast feedback
FM Retail Operations

12. Internet Retailing Online retailing on the World Wide Web
Biggest retailer?
Amazon.com
Growing very quickly
Used for selling and educating
Create your own website?
Many possibilities
FM Retail Operations

13. Television Shopping Home Shopping Network and QVC
Customers can not try on goods
Hesitant to buy
High return rates
Certain items more appropriate
Jewelry
FM Retail Operations

14. Interactive kiosks Free-standing computerized units
Usually in the retail environment
Provide information about products
Inventory status
Online ordering
FM Retail Operations

15. 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?
FM Retail Operations