Emerging Technologies in Direct-to-Customer...

Emerging Technologies in Direct -to-Customer Marketing Model

with reference to Retailing in India

Ritu Sinha

Ph.D Scholar (Management)

(2014-2017)

Kalinga University, Raipur, C.G.

Enrol lment No. 15086416 (KU002MMXIV02010594)

Abstract

Retailing growth has demanded IT deployment to broaden its arena and

overcome challenges namely Business Opt imizat ion, increasing SCM

efficiency, innovat ing shopping exper ience and other manual limitat ions.

Techno logy proves beneficial in creat ing and mainta ining customer

relat ionships. Analys is o f data co llected at the retail po int of sales helps

understand preferences, buying habit s, spending budgets, family needs o f an

individual customer. Relat ionships are maintained by ut iliz ing IT for

per iodica l e-mailing, SMS, greet ings, promotional let ters and persona l

calling. Informat ion techno logy is the backbone o f modern retailing. The

t radit ional retailing was easier to manage because o f its size, scope and

uncompet it ive nature; and usually t he shops were managed by the owner -

manager. But the modern retail format s, which are superstores and large

chains owned by large organizat ions, are difficult to manage without an

efficient and reliable IT system in place. This study is aimed to analyse

var ious techno logical too ls that are being used for the purpose.

1. Introduction

Retailing is t he most act ive and at t ract ive sector of last decade. While the

retailing industry itself has been present since ages in our country, it is only

the recent past that it has witnessed so much dynamism. T he emergence o f

retailing in India has more to do with the increased purchasing power o f

buyers, especia lly post -liberalizat ion, increase in product var iety, and

International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com

175

increase in economies o f scale, with the aid o f modern supply and

dist r ibut ions so lut ion.

Indian retailing today is at an int erest ing crossroads. The retail sales are at

the highest po int in history and new techno logies are improving retail

product ivity. Though there are many opportunit ies to start a new retail

business, retailers are facing numero us challenges.

With t ime the Indian markets are becoming inundated with numerous

dispersed firms, companies that demands to lead with an extra mile to gain a

compet it ive edge over their compet itors for whom Informat ion Techno logy

has become a cr it ical medium.

Retail companies are facing a number of challenges due to increasing

complexit y o f supply chains caused mainly by o ff -shor ing o f manufactur ing.

Increased lead t imes, demand var iabilit y and supply disrupt ions are forcing

companies to pile inventories t hus leading to opportunity lo sses and higher

cash conversion cycles. Demand forecast ing has assumed cr it ical significance

in managing supply chains efficient ly. Having an agile supply chain network

that seamlessly connects demand, supply and product remain s the top prior it y

for retailer and consumer companies.

Dig ital Market ing in Retailing investment may comprise o f implement ing

ERP packages, forecast ing tools, and others. The leading manufacturer -

retailer Madura Garments in one o f the interact ions, aft er the implementat ion

of the SAP ERP package, company could easily measure the success o f t he

implementat ion by certain related indicators.

2. Objectives and Research Methodology

Objectives of the study are as given below:

1. To analyse the retail market in Ind ia.

2. To find out the major techno logical tools emerging in Retail Out lets.

Research Methodology


176

Research methods can be classified in different ways, the most commo n

dist inct ion is between the quant itat ive and the qualitat ive approaches (Myers,

20071). Quant itat ive approaches were or iginally used while studying natura l

sciences like: laboratory exper iment s, survey methods and numerica l

methods. A qualitat ive study is used when the researcher wants to get a

deeper understanding on a specific topic or situat io n. Myers (2007)2 stated

that the qualitat ive approach was developed in social sciences in order to

support the researcher in studies including cultural and social phenomena.

Sources included in the qualitat ive approach are interviews, quest ionnaires,

observat ions, documents and the researcher’s impression and react ions. The

chosen approach is qualitat ive.

This study typically takes the form study o f secondary data ava ilable on

Indian Retail system. To understand and conc lude the major techno logica l

tools contr ibut ing towards the growth of Indian retail industry, we have not

only gone through a number o f reports and papers but also visit ed and survey

select organised retail out lets in Delhi / NCR. This has the advantages o f

providing very r ich informat ion and avo iding the influence o f others on the

opinion o f any one individual.

3. Emerging Technological Tools in Retail

Retailing growth has demanded IT deployment to broaden its arena and

overcome challenges namely Business Opt imizat ion, increasing SCM

efficiency, innovat ing shopping exper ience and other manual limitat ions.

Indian retailing today is at an int erest ing crossroads. The retail sales are at

the highest po int in history and new techno logies are improving retail

product ivity. Some o f the major techno logical tools are given as below:

3.1 Business Intelligence tools

These comprises tools namely Data warehousing, data mining, Online

Analyt ical Processing (OLAP) facilitat ing a wea lth o f informat ion in terms o f

sales and behavioural analys is to retailers. Business Intelligence too ls are

1 Myers, M. D. (2007), ―Qualitative Research in Information Systems‖, MIS Quarterly, vol. 21 No. 2,

pp.241-242. 2 Ibid


177

ident ified to be very versat ile that analyze sales data from the POS,

determines t rend o f sales for the categories and sub -categor ies o f merchandise

so ld from disperse stores that enable the retailers to understand the frequ ency

of sale, geographica l spread o f sa les, types o f so ld merchandise and thus

provide 'what if' analys is specially for projected sales and pr ice changes .

This would lead to increase in sales.

3.2 RFID

Current ly RFID is profit ably being used in retail fir ms o f developed countr ies

pr imar ily in two sect ions namely in supply chain, warehouses and Retail

front . It ensures individual art icles tagged by RFID enable quick billing and

to ensure automated stock keeping.

3.3 B2B Software

B2B so ftware is well suit ed for mult i-channel retail business conso lidat ing

sales via Internet , mail catalog, phone/fax and po int -of-sale (POS) terminals

installed in physical shops. The concept with mult i-channel business is not

new. However, t he latest techno logical vehicles like Web/Internet , created a

new possibilit ies for retailers indeed.

3.4 Business Optimization Software

Product pr icing so ftware: Significant prospects o f pro fitabilit y can be

achieved with the advent of sophist icated pr ice opt imizat ion / revenue

management techniques o ffer. Current ly two US-based so ftware product

vendors Demand Tech and Khimetr ics have come up with products to

opt imize the pr ices o f individual products. India will int roduce such products

in t he coming years as retailers have started understand ing the features o f the

products and their deployment in pr icing decis ion -making.

3.5 Merchandise Optimization Software

Merchandise planning is one o f the biggest challenges that any mult i store

retailer faces. Get t ing the r ight mix of product , which is store specific across

your organizat ion, is a combinat ion o f customer ins ight , allocat ion, and

assortment techniques.


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3.6 Mobile computing

Mobile comput ing has facilitated employees in t racking the inventory and

provided customers an innovat ive shopping e xper ience through integrat ion o f

PDAs in individual shopping carts that would provide informat ion on the

products. This use has opt imized inefficiencies in inventory and supply chain

sect ions and lead to cost minimizat ion. A similar WAP (Wireless Applicat i on

Protocol)-enabled mobile phones are catching at tent ion.

3.7 Customer Relationship Management

Customer relat ionship management (CRM) is about ident ifying a company’s

best customers and maximiz ing the value from them by sat isfying and

retaining them. As a business philosophy CRM is seen to be firmly rooted in

the concept of relat ionship market ing, which is aimed at improving long -run

profitabilit y by shift ing from transact ion based market ing to customer

retent ion through effect ive management of customer re lat ionships.

3.8 Data Mining3

Today retailer is facing dynamic and compet it ive environment , with increase

in globalizat ion and compet it iveness retailers are seeking bet ter market

campaign . Retailer are co llect ing large amount o f customer daily t ransact ion

details. This data co llected requires proper mechanisms to convert it into

knowledge, using this knowledge retailer can make bet ter business decis ion.

Retail industry is looking st rategy where in they can target right customers

who may be pro fitable to them.

3.9 Digital Promotions

Several examples of innovat ive approaches and modern techno logy

applicat ions have been ment ioned in the preceding sect ions, such as

employing data analyt ics to extract fresh customer ins ights; the use o f social

media p lat forms to accost customers and spread the word about companies’

init iat ives and products; the relevance of mobile dig ital devices in providing

prompt in-store shopping opt ions and reaching customers with market ing

3 Bharati M Ramagiri and Dr B L Desai (2013), ―Role Of Data Mining In Retail Sector‖,

International Journal on Computer Science and Engineering, Vol.5 No.1, pp. 47-50.


179

communicat ion on-the-go; t he innovat ive ut ilizat ion o f RFID tags, int er ior

digit al walls and mult i-touch screens, self -service kiosks and mobile po ints o f

sale to enhance the store exper ience in connect ion to the on - line wor ld and to

let customers, if they wish it , serve themselves.

3.10 Location-based Applications and Mobile Promotions

Customers make purchase decis ions out of stores, e.g. by reviewing the

retailer ’s websit e and checking this week’s o ffers, by read ing user and expert

reviews online or by consult ing their fr iends about recent purchases they

have made either online or in a br icks-and-mortar store. Customers also

decide what to buy when they are already in the store. Irrespect ive o f where a

final purchase decis ion is made, retailers are constant ly looking for creat ive

ways to influence customers’ decision-making process along the ent ire

shopping cycle, i.e. from the po int o f raising awareness to the po int o f

receiving payment .

3.11 Mobile Point of Sale

Sophist icated applicat ions for smart phones and other mobile devices for m

one area of opportunit ies for retailers to inst itute, nurture, and sustain long -

term relat ionships with their customers. Mobile po int o f sale (POS), however,

opens also other opportunit ies for creat ing customer va lue (Aruba, 2012).

Mobile POS is, in simple terms, a mobile checkout , an extension to

t radit ional fixed POS that has been around for decades and that customers are

more than familiar with (NCR, 2011; Rudolph et al. , 2012).

3.12 Mobile Payments and Digital Wallets

There could be no discussion about the success, ad opt ion, and increasing use

of mobile dig ital devices, especia lly smart phones, by consumers for m-

commerce other related payment purposes (O'reill et al. ,2012). Mobile

payments have become a favour ite means of paying for all kinds of services,

such as t ravel t icket ing ( from bus to flight t ickets), product purchase and, but

not limit ed to , fina lizing payments in phys ical stores using smart phone

―wallet‖ or other payment applicat ions (Lukies, 2011).

3.13 Personal Shopping Assistants


180

As discussed in the examp le o f mobile point -of-sale, providing high qualit y

personalized customer service on the shop floor is a challenge if the store

assistants spend more t ime manning the cash reg ister rather than wit h

customers. Personal shopping ass istants could alleviate the issue o f receiving

qualit y service ins ide the store at the moment when the customer requires it .

Personal shopping assistants are touch screens with built - in wireless

connect ivity to ensure mobilit y and they remind o f tablets both in shape and

funct ionalit y.

4. Conclusion

Informat ion techno logy is the backbone of modern retailing. The t radit ional

retailing was easier to manage because of it s size, scope and uncompet it ive

nature; and usually the shops were managed by the owner -manager. But the

modern retail formats, which are superstores and large chains owned by large

organizat ions, are difficult to manage without an effic ient and reliable IT

system in place.

With the r ise o f mobile, social and cloud techno logies, customer expectat ions

cont inue to increase. More than ever, customers demand a more seamless

exper ience. For many businesses, customer exper ience is the new

bat t lefield—a compet it ive advantage that at t racts and keeps customers. This

paper has invest igated into var ious technologies and their ut i lit ies.

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http://online.wsj.com/article/SB10001424052970204630904577058131832465876.html?mod=WSJINDIA_hpp_LEFTTopStories



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