CHAPTER 8A look At Information Gathering AND Processing In Retailing

INFORMATION FLOWS IN A RETAIL DISTRIBUTION CHANNEL

IN an effective distribution channel, information flows freely and efficiently among the three main parties,: supplier, retailer and consumer. This enables parties to better anticipate and address each others performance expectations.

SUPPLIER needs these kinds of information; 1 From the retailer- estimates of category sales, inventory turnover rates,

feedback on competitors, the level of customer returns, and so on; 2 From the consumer- attitudes toward given styles and models, the extent

of brand loyalty, the willingness to pay a premium for superior quality, so on.

Retailers needs these kinds of information1From the supplier- advance notice of new models and model changes, training materials for complex products, sales forecast, justification for price hikes, and so on.

2 From the consumer; why people shop with the retailer, what they like and dislike about the retailer, where else people shop . ect.

Consumer needs these kinds of information

1 From the supplier- assembly and operating instructions, the extent of warranty coverage, where to send a

compliant, so on.2 From the retailer- where specific merchandise is stocked in

the store , the methods of payment accepted, the rain check policy when a sale item is out of stock.

RETAILERS CAN ASSIST OTHER CHANNEL MEMBERS BY;

Allowing data to be gathered on their premises. Many research firms like to conduct surveys at shopping centers because of the large and broad base of shoppers.

Gathering specific data requested by supplies, such as how react to displays.

Passing along information on the attributes of consumers buying particular brands and models. Since credit transactions account for a major portion of sales, many retailers link purchases with consumer age, income, occupation, and other factors

• Retailer are often tempted to rely on nonsystematic or incomplete ways of obtaining information due to time and cost, as well as a lack of research skills. The result can be devastating.

• Here are example: • 1. using intuition – a movie theater charges $10 for tickets at all times. The manager

feels that because all patrons are seeing the same movie, prices should be the same for a Monday matinee as a Saturday evening.

• 2. continuing what was done before – a toy store orders conservatively for the holiday season because prior year sales were weak. The store sells out two weeks before the peak of the season, and more items cannot be received in time for the holiday.

• 3.copying a successful competitor’s strategy – a local independent bookstore decides to cut the price of best-sellers to much the prices of a nearby chain book-store.

AVOIDING RETAIL STRATEGIES BASED ON INADEQUATE INFORMATION

THE RETAIL INFORMATION SYSTEM

• A retail information system requires a lot of background information, which makes the SecondaryData.com

• Data gathering an analysis should not be regarded as a one-shot resolution of a single issue.

• They should be part of an ongoing, integrated process.• A retail information system (RIS) anticipates the information needs of

retail manager: collects, organizes and stores relevant data on a continuous basis;

• And directs the flow of information to the proper makers.

Data-base management-a retailers gathers, integrates, applies, and stores information

related to specific subject areas.DATA-BASE MANAGEMENT SHOULD BE APPROACHED AS A SERIES

FIVE:

1 Plan the particular data base and its components, and determine information needs.2 Acquire the necessary information.3 Retain the information in usable and accessible format.4 Update the data base regularly to reflect changing demographics, recent purchases, and so forth.5 Analyze the data base to determine company strengths and weaknesses.

TO EFFECTIVELY MANAGE A RETAIL DATA BASE, THESE ARE VITAL

CONSIDERATION: Is senior management knowledgeable in data-base strategies and does it know

how company data bases are currently being used? Is there a person or department responsible for overseeing the data base? Does the firm have data base acquisition and retention goals? Is every data base initiative analyzed to see if it is successful? Is there a mechanism to flag data that indicates potentials problems or

opportunities? Are customer purchases of different products or company division cross-linked.? Is there a clear privacy policy that is communicated to those in a data base. Is the data base updated each time there is customer interaction.

• Are customers, personnel, suppliers, and others invited to update their personal data.

• Is the data base periodically checked to eliminate redundant files?

A DATA WAREHOUSE HAS THE FOLLOWING COMPONENTS

1. The data warehouse, where data are physically stored,2. Software to copy original data bases and transfers them to the

warehouse3. Interactive software to process inquiries,4. A directory for the categories of information kept in the warehouse.

DATA MINING- is the depth analysis of information to gain specific insights about customers, product categories, vendors and so forth.

Micromarketing- whereby the retailer uses diffentiated marketing and develops focused retail strategy mixes.