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Unit 10
The Impact of Technology on Retailing
Task 1
In the last 10 years, there have been a number of major technological developments in retailing.
You need to write a report that describes five of these, and explains the impact these have had on Sainsbury's and Ikea and how they have enabled the retailers to provide benefits to customers.
Technological developments you could investigate include:
- Electronic Point of Sale (EPOS)
- Electronic funds transfer at point of sale (EFTPOS)
- Shelf and store management systems
- Energy management systems
- Database marketing systems
- Bar codes
- Laser technology
- Self-scanning stores
- Hand-held terminals
- Hands-free stock ordering
- Real-time stock control systems
- Electronic data interchange (EDI)
- Bankers' automated clearing system (BACS)
[Evidence for P1, M1]
Source: stock.xchng, tuger
Task 2
These developments obviously provide benefits to customers and to the retailers themselves, but they also come at a cost. You need to describe the benefits and costs of technological developments within the retail sector. This could be presented as a report or as a table:
| Technological development |
Costs to the retailer | Benefits to the retailer |
| e.g. EFTPOS... |
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Costs you should consider include:
- Introduction and set-up
- Maintenance
- Improvements
- Staff training and retraining
- Working practices
- Security costs
- Management of change
The benefits will include:
- Improved customer service, e.g. more eye contact and speed at the checkout
- Greater accuracy: accurate sales and profit figures
- Support – this could be for staff decisions, measurement of promotions, product lines, etc.
- Plannogram production, e.g. recommended facings of products on a shelf derived from EPOS scanning data
- Category management
- Improved marketing techniques, e.g. relationship marketing, database marketing and loyalty cards
- Transfer of data
- Sharing information with suppliers
- Flexibility
- Speed of response
- Competitive advantage
[evidence for P2]
Source: stock.xchng, danzo08
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Task 3a
Information systems support planning and decision-making for retail businesses. You need to plan a PowerPoint presentation for the training course explaining how the delegates can utilise this giving examples from Sainsbury's and Ikea. Your presentation should look at what information systems they can use:
- Retail business support, e.g. marketing, product range decisions, space allocation, stock replenishment and ordering, staff scheduling, human resources, administration and finance
- Links between systems, e.g. EPOS systems and space management systems.
Planning and decision making that can be supported includes data flow information, e.g. finance, administration, marketing, human resources, transport and distribution, and experimentation to measure consequences of different 'what if' scenarios.
And what the information requirements are for these systems:
- Accuracy
- Speed
- Relevance
- Feedback mechanisms
- Observance of confidentiality
- Meeting management needs
[evidence for P3]
Task 3b
Using research from Sainsbury's and Ikea, you need to produce a short report explaining and evaluating the benefits gained by the companies when using information systems for planning and managerial decision-making.
[evidence for M2, D2]
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Task 4
After carrying out this research you have realised that you should encourage your trainees to develop the e-business side of their retail business (e.g. by having a website).
You are to produce a leaflet explaining the advantages and disadvantages that face retail organisations and customers using e-business.
The leaflet should include:
- A definition of e-business and its application within retailing
- An explanation of online shopping and its potential benefits such as creating new business, adoption by exisiting businesses, giving a competitive impact and the implications for customer service
Source: stock.xchng, gotscolios
You also need to examine potential advantages and disadvantages, including:
| Advantages | Disadvantages |
| Wider customer base |
Set-up costs |
| International access | Running costs |
| Global access | Lack of resources |
| Reduced staffing and costs | Lack of skills |
| Obtain information from customers | Difficulty integrating systems |
| Financial transactions online | Lack of management interest |
| Sources of marketing information | Security concerns |
| Reduced transport costs | Implications of poorly designed websites,
e.g. not enticing potential customers to browse |
| Competitive advantage | Organisational culture |
| Sharing information with suppliers | Reluctance of suppliers to embrace e-business |
| Digital retail business | Space to store goods |
| Encourages repeat purchases | |
| Increased speed of dispatch | |
| Reduced lead time in stock replenishment | |
| Improving range and quality of services | |
| Avoid losing market share | |
There are also advantages and disadvantages to customers:
| Advantages | Disadvantages |
| Individual access | Only see images |
| Up-to-date information | Security issues |
| Latest offers | No human interface |
| Time to browse | Unscrupulous operators |
| Enhanced information to make choices |
Problems with returning goods |
[Evidence for P4, M3]
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Task 5
Some of the trainees are concerned about the legislation and regulation governing e-business (they are worried that if they break the law they may face bankruptcy). Produce a leaflet outlining the relevant regulations governing e-business.
You should include:
- EU Directives (about advertising, The Electronic Commerce (EC Directive) Regulations 2002
- The Consumer Protection (Distance Selling) Regulations 2000
- Enforcement - The Electronic Commerce (EC Directive) Regulations 2002 and the Enterprise Act 2002
- Information security - The Electronic Signatures Directive (1999/93/EC)
- Data protection - The Data Protection Act 1998, The Privacy and Electronic Communications (EC Directive) Regulations 2003
- Copyright/intellectual property rights - Copyright Designs and Patents Act 1988, Trade Marks 1994
[Evidence for P5]
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Task 6
Some of your trainees still remain unconvinced. Produce a short report evaluating the benefits to customers of the application of technological developments by both Sainsbury's and Ikea.
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Back to the Lesson.
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