IT & E-Retailing
1.Discuss various Information Technology method use in e-retailing.
The Electronic Retailing also called as e-tailing or internet retailing, is the process of selling the goods and services through electronic media, particularly the internet. Simply, the sale of retail goods and services online is called as electronic retailing.
It follows the B2C business model wherein the business interacts directly with the customers without the involvement of any intermediaries.
The e-retailers can be of two types:
- Pure Play e-retailers such as Amazon that emerged as the online bookseller. It is present only online and do not have any physical outlet for the customers.
- Brick and click e-retailers such as Dell that sells computers through the internet as well as has the physical store front for the customers.
Advantages of Electronic Retailing
- Through electronic retailing, customers can save both the efforts and time.
- The wide range of products is available online, so the comparison can be made easily before the purchase.
- The customer can shop anytime and from anywhere, the facility is available 24*7
- The huge discounts can be availed while shopping online.
- The detailed information about the product is available online; that helps the customer to make the purchase decision.
- The electronic retailing offers the easy payment terms such as payment on delivery that instigate the customer to shop online.
Disadvantages of Electronic Retailing
- The customers may not be sure of the quality of the products offered online.
- It is the tendency of every individual to bargain before making the final purchase, but this quotient is missing in electronic retailing.
- Also, the customers may not trust on the payment gateways and fear the misuse of credit cards or any other mode of payment.
- Every customer wants to see and feel the product that he purchases, but it is not possible in case of electronic retailing where the customer makes the decision just by looking at the image.
- The product is not readily available; the customer has to wait for some time to get the product in his hands.
- The customer misses the emotional attachment with the seller that leads to less faith on the offerings.
- The electronic retailing is the subset of E-Commerce that means, E-commerce is the principle domain that includes the e-tailing operations.
E-commerce, short for electronic-commerce, is “a term for any type of business, or commercial transaction that involves the transfer of information across the Internet”. Currently, e-commerce is mostly used via the Internet, but before the Internet was available, a form of electronic transactions occurred over Electronic Data Interchange (EDI). Businesses and customers used EDI by setting up a data link specifically reserved for commerce between them. In 1979, Michael Aldrich invented the concept of “teleshopping” which gave the base structure that evolved into the online shopping ability we know today. In 1990’s, websites like Amazon and Ebay were created. Because e-commerce is now done through the Internet, it has made a global market-place for businesses and consumers to make trades and transactions all across the world. For example, businesses in Europe can ship items to customers in America, and vice versa. Just like any other technology, a user needs to know how e-commerce works and how to navigate through it. One of the basic concepts is knowing what a "shopping cart" is and how to use it. A "shopping cart" is a software that allows buyers to have a virtual chart, just like you would at a physical store, to collect multiple items and be able to buy all the items at once when you “check out”. Other concepts that one should know are the advantages and disadvantages of shopping online.
Advantages of E-Commerce
For businesses, the most prominent advantages to using E-Commerce are the reduced costs associated with it, the broader customer base, the increased customer satisfaction, and the potentially higher sales it produces. Because E-Commerce transactions are done through a website and not a brick and mortar store, much of the overhead associated with running a retail store is reduced. The need to pay for heating, lighting, staffing, and restocking a store is practically eliminated. This results in fewer employees and smaller facilities which in turn allows for larger capital gains. Usually, only a company headquarters is needed along with a few warehouses that can cover larger areas than a single retail store normally would. Also, more individuals can be reached through a website rather than the small geographical area that a retail store would cover. Multiple retailers are required to cover larger geographical areas, but with E-Commerce anyone anywhere can access the website at anytime! This increases the possible amount of customers dramatically. Websites also allow people to shop from the comfort of their own home without having to consume time and money (gas) to view a company’s products in their retail store. Plenty of times have people gone to the store for a specific item only to be disappointed that it wasn´t in stock. With E-Commerce this doesn´t happen. The comfort provided, the time saved, and the money saved can easily increase the satisfaction of the consumer. The potentially higher sales is another advantage. By using E-Commerce, a business can be open every hour of the year and accessible to everyone across the globe. They´re no longer limited by a geographical area or a 40 hr work week.
For Consumers, the greatest advantages lie in its convenience, selection, customization, price comparison, and potential cost savings. As mentioned above, the convenience of shopping from home (in your underwear if you like) is very appealing to many consumers. Shopping can be done during anytime of the day or night through the use of a website and it´s no longer a necessity to rush home from work to buy an item before its store closes. A person can also compare the prices, quality, and features of multiple items from multiple stores. Their selection is no longer limited to the facilities closest to them, but to their attention span. Before, consumers would drive from store to store comparing these characteristics before driving back to make their final purchase. The time, effort, and expense involved in this type of comparison is nullified through E-Commerce. Many individuals want to make their purchases unique to their preferences. With the option to communicate with a company directly through their site instead of buying a pre-manufactured item on a store shelf, the ability to customize the item they are looking for is greatly improved. The company can take the order and payment while putting it through to the warehouse so that the final product to be shipped is tweaked to the consumer´s desire. Also, the ability to save on cost is increased for the consumer using E-Commerce. The person can compare prices to find the lowest and often the item can be shipped to their front door for less than it would normally have taken to find it in a motor vehicle. They say time is money, so if you’re spending less time looking for what you need then you can potentially spend more time working for what you want.
2.Describe the inclusion of e-retailing in one’s business and its Impact on the expansion of Business.
Electronic commerce (ecommerce) is a type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet. Electronic commerce operates in all four of the major market segments: business to business, business to consumer, consumer to consumer and consumer to business. It can be thought of as a more advanced form of mail-order purchasing through a catalog. Almost any product or service can be offered via ecommerce, from books and music to financial services and plane tickets.
Also sometimes written as "e-commerce" or "eCommerce".
BREAKING DOWN ´Electronic Commerce - ecommerce´
Ecommerce has allowed firms to establish a market presence, or to enhance an existing market position, by providing a cheaper and more efficient distribution chain for their products or services. One example of a firm that has successfully used ecommerce is Target. This mass retailer not only has physical stores, but also has an online store where the customer can buy everything from clothes to coffee makers to action figures.
Business to business, also called B to B or B2B, is a type of transaction that exists between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business refers to business that is conducted between companies, rather than between a company and individual consumers. Business to business stands in contrast to business to consumer (B2C) and business to government (B2G) transactions.
BREAKING DOWN ´Business To Business - B To B´
A typical supply chain involves multiple business to business transactions, as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business to consumer transactions. In the context of communication, business to business refers to methods by which employees from different companies can connect with one another, such as through social media. This type of communication between the employees of two or more companies is called B2B communication.
B2B Relationship Development
Business to business transactions require planning to be successful. Such transactions rely on a company’s account management personnel to establish business client relationships. Business to business relationships also must be nurtured, typically through professional interactions prior to sales, for successful transactions to take place. Traditional marketing practices also help businesses connect with business clients. Trade publications aid in this effort, offering businesses opportunities to advertise in print and online. A business’s presence at conferences and trade shows also builds awareness of the products and services it provides to other businesses.
Key Impacts of E-commerce on Marketing
Marketing strategy of differentiation increasingly effective (easier to reach niche markets online)
Product life cycles are shortened (note the link with technological disruption)
Greater use of digital promotion (much easier now to track effectiveness of promotion)
Brands and retailers increasingly using multiple distribution channels
Greater use of dynamic pricing (easier to maximise revenues, but is it fair for customers?)
Increased need for localisation (but on its own, not enough)
Ability to sell a much wider product range (the “long tail”)
Key Impacts of E-commerce on Human Resource Management
Need for employees to have a broader range of digital skills (e.g. store staff trained to sell via other digital options)
Workforce planning – to support highly seasonal demand (e.g. Amazon hire 000´s of extra staff during peak periods)
Concerns over the working conditions of staff working in e-commerce warehouses
Increased use of automation in e-commerce (e.g. John Lewis £500m investment) changes the workforce needs
Key Impacts of E-commerce on Operations
Logistics behind large-scale e-commerce platforms are complex
Places greater emphasis on close relationships with key suppliers
Economies of scale are becoming increasingly important
It is now relatively easy for smaller firms to sell online; sophisticated e-commerce software (integrated with financial, marketing and other systems) is widely available
Key Impacts of E-commerce on Finance
Significant investment required to set-up e-commerce platforms and to integrate them with other systems.
E-commerce likely to involve greater use of multi-currency transactions
Impact of exchange rate changes more likely to be significant for businesses selling online (if they are using e-commerce to build international sales)
Developments in e-commerce systems have made it relatively straightforward for all businesses to sell digitally. Off-the shelf software or cloud-based services, as well as trading platforms like Amazon & Tmall make it easy. However, to compete at any scale or complexity, there needs to be substantial and sustained investment in integrated e-commerce systems. Does this give larger firms an advantage?
A key evaluation issue is ensuring a business has the right skills and expertise (either within the workforce or via suppliers). E-commerce technology is becoming more complex and is fast-changing. This places a premium on the need to recruit and retain specialist technical expertise, as well well grow the overall digital skills of the workforce.
From a financial point of view, investing in e-commerce still involves risk. There is no guarantee of success. Most investments in e-commerce are long-term in nature. They are intended to be transformational in that they are made to improve competitiveness.
3.Explain Merchandise Management System with the help of a real life example. Ans.
JDA Software Group, Inc. Merchandise Management System (MMS) is a comprehensive, fully integrated solution for corporate headquarters or back office requirements. MMS helps you manage the retail cycle from planning/buying/receiving through transferring/distributing/selling of goods to performance analysis/revised pricing and then back to planning for the next season. MMS features fully-integrated merchandising/warehouse-management/distribution/financial applications. The MMS closed-loop architecture gathers, integrates and distributes data throughout your organization. Using this data, it supports the core inventory control, cost/price management, purchase-order management, automated replenishment, merchandise planning and allocation of products.
Decision-support capabilities provide process tools to help you make more-informed and timely decisions, respond rapidly to changes in the competitive environment, monitor store-level activity and achieve operational efficiencies.
MMS is fully integrated with the following JDA solutions: in-store, portals, e-commerce, multichannel modules, decision support and collaborative planning. MMS can also interface with many third-party systems.
JDA can embed predictive and descriptive capabilities into MMS to support such competitive retail practices as demand forecasting, advanced replenishment, dynamic clustering and customer profiling in multiple channels.
PROCESS OF MERCHANDISE MANAGMENT SYSTEM
Two distinct types of merchandise management systems for managing
Staple (Basic) Merchandise Categories
Continuous demand over an extended time period
Hosiery, most grocer store items, housewares
Sales are relatively stable from day to day
Easy to forecast demand
Fashion Merchandise Categories
In demand for a relatively short period of time
Continuous introductions of new products, making existing products obsolete
Athletic shoes, women’s apparel, some consumer electronics
Forecasting demand is more challenging
4.Describe the importance of customers in business. Describe Customer Relationship Management in this regard.
Customers, whether members of the public or other organizations, are crucial to the success of any business since they represent its fundamental source of revenue. It is, therefore, crucial that businesses create a sense of loyalty among customers for their brand.
Repeat custom is crucial for the success of any business, and losing customers is considered a reliable measure of failure since without customers there can be no business.
Keeping customers satisfied also means that they are likely to bring more customers to a business by word of mouth or verbal referral, especially if their loyalty is rewarded with discounts and free gifts.
One of the key ways to keep customers loyal and satisfied is to listen to them and respond to their demands.
Customer relationship management (CRM) is an approach to managing a company´s interaction with current and potential future customers. It tries to analyze data about customers´ history with a company and to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.
One important aspect of the CRM approach is the systems of CRM that compile data from a range of different communication channels, including a company´s website, telephone, email, live chat, marketing materials, and more recently, social media. Through the CRM approach and the systems used to facilitate it, businesses learn more about their target audiences and how to best cater to their needs. However, adopting the CRM approach may also occasionally lead to favoritism within an audience of consumers, resulting in dissatisfaction among customers and defeating the purpose of CRM.
The main components of CRM are building and managing customer relationships through marketing, observing relationships as they mature through distinct phases, managing these relationships at each stage and recognizing that the distribution of value of a relationship to the firm is not homogenous. When building and managing customer relationships through marketing, firms might benefit from using a variety of tools to help organizational design, incentive schemes, customer structures, and more to optimize the reach of its marketing campaigns. Through the acknowledgement of the distinct phases of CRM, businesses will be able to benefit from seeing the interaction of multiple relationships as connected transactions. The final factor of CRM highlights the importance of CRM through accounting for the profitability of customer relationships. Through studying the particular spending habits of customers, a firm may be able to dedicate different resources and amounts of attention to different types of consumers.
Relational Intelligence, or awareness of the variety of relationships a customer can have with a firm, is an important component to the main phases of CRM. Companies may be good at capturing demographic data, such as gender, age, income, and education, and connecting them with purchasing information to categorize customers into profitability tiers, but this is only a firm´s mechanical view of customer relationships. This therefore is a sign that firms believe that customers are still resources that can be used for up-sell or cross-sell opportunities, rather than humans looking for interesting and personalized interactions. Below is a diagram of the steps when serving a client while using a CRM system:
Components in the different types of CRM
Effect on customer satisfaction
Customer satisfaction has important implications for the economic performance of firms because it has the ability to increase customer loyalty and usage behavior and reduce customer complaints and the likelihood of customer defection. The implementation of a CRM approach is likely to have an effect on customer satisfaction and customer knowledge for a variety of different reasons.
Firstly, firms are able to customize their offerings for each customer. By accumulating information across customer interactions and processing this information to discover hidden patterns, CRM applications help firms customize their offerings to suit the individual tastes of their customers. This customization enhances the perceived quality of products and services from a customer´s viewpoint, and because perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly affect customer satisfaction. CRM applications also enable firms to provide timely, accurate processing of customer orders and requests and the ongoing management of customer accounts. For example, Piccoli and Applegate discuss how Wyndham uses IT tools to deliver a consistent service experience across its various properties to a customer. Both an improved ability to customize and a reduced variability of the consumption experience enhance perceived quality, which in turn positively affects customer satisfaction. Furthermore, CRM applications also help firms manage customer relationships more effectively across the stages of relationship initiation, maintenance, and termination.
CRM benefits for customer
With CRM systems customers are served better on day to day process and with more reliable information their demand of self service from companies will decrease. If there is less need to contact with the company for different problems, customer satisfaction level increases. These central benefits of CRM will be connected hypothetically to the three kind of equity that are relationship, value and brand, and in the end to customer equity. Seven benefits were recognized to provide value drivers.
- Enhanced ability to target profitable customers.
- Integrated assistance across channels
- Enhanced sales force efficiency and effectiveness
- Improved pricing
- Customized products and services
- Improved customer service efficiency and effectiveness
- Individualized marketing messages also called campaigns
- Connect customers and all channels on a single platform.
In 2012, after reviewing the previous studies, someone selected some of those benefits which are more significant in customer´s satisfaction and summarized them into the following cases:
Improve customer services: In general, customers would have some questions, concerns or requests. CRM services provide the ability to a company for producing, allocating and managing requests or something made by customers. For example, call center software, which helps to connect a customer to the manager or person who can best assist them with their existing problem, is one of the CRM abilities that can be implemented to increase efficiency.
Increased personalized service or one-to-one service: Personalizing customer service or one-to-one service provides companies to improve understanding and gaining knowledge of the customers and also to have better knowledge about their customers´ preferences, requirements and demands.
Responsive to customer´s needs: Customers´ situations and needs can be understood by the firms focusing on customer needs and requirements.
Customer segmentation: In CRM, segmentation is used to categorize customers, according to some similarity, such as industry, job or some other characteristics, into similar groups.
Although these characteristics, can be one or more attributes. It can be defined as a subdividing the customers based on already known good discriminator.
Improve customization of marketing: Meaning of customization of marketing is that, the firm or organization adapt and change its services or products based on presenting a different and unique product or services for each customer. With the purpose of ensuring that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests.
Multichannel integration: Multichannel integration shows the point of co creation of customer value in CRM. On the other hand, a company´s skill to perform multichannel integration successfully, is heavily dependent on the organization´s ability getting together customer information from all channels and incorporate it with other related information.
Time saving: CRM will let companies to interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.
Improve customer knowledge: Firms can make and improve products and services through the information from tracking (e.g. via website tracking) customer behaviour to customer tastes and needs. CRM could contribute to a competitive advantage in improving firm´s ability of customer information collecting to customize products and services according to customer needs.
5.Explain Customer Relationship Management (CRM) in Retail sector. How it is different from other sector. Give at least three differences.
A retailer’s relationship with their customer is key to repeat store visits, brand loyalty and ultimately sales conversions.
But how do you go about creating a winning formula? How can you engage consumers in today’s multi-channel environment; be it through a website, social media channels or in store, to keep them coming back?
Customer Relationship Management (CRM) in retail isn’t a new concept, but it’s one that could help retailers win the battle for sales in these competitive times. Tesco introduced their loyalty Club card in 1995, collecting data on shoppers and using the information to personalise discounts and rewards. Fast forward 21 years and the majority of retailers offer some kind of reward or loyalty program with Marks & Spencer being the latest to launch their Sparks card, a new ‘Members Club’ which includes bespoke offers and priority access to sales for those that sign up.
It’s no longer enough to have a bricks and mortar store and hope that people will visit and spend their hard earned cash on impulse buys. Customers need to be enticed in to the store, given a reason to visit and a reason to stay and shop. Retailers need to create a welcoming environment as well as an experience for their customers.
Having an accurate retail CRM database, focused on the customer, is an integral part of the jigsaw for any retailer. Consumers are savvy, demanding and often in a hurry, so a successful retail CRM system will pay dividends when it comes to building loyal customers. Retailers need to think smarter to engage shoppers and create loyalty towards their brand, and to do this they need to know as much as possible about them.
Birthdays? Send a voucher offering a discount once a year. Not seen a customer for a while? Send an email with the latest news and products available. Regular customers? Invite them to an exclusive event.
A good retail CRM system can help build loyalty, creating brand ambassadors who will happily spread the word about their positive customer experience. Get it wrong and they’ll be even more vocal about a bad customer experience.
There are several ways to collect information to build a successful CRM database. Many retailers ask for an email address when you purchase in-store, others offer the latest news and discounts by signing up to their newsletter online or by developing customer chat rooms and communities. Whatever the means of data capture, if the right questions are asked, retail marketing campaigns can be targeted to the individual, not just personalised but also targeted to the right gender, location and even specific products of interest.
Using a database to personalise products, discounts and events for consumers is crucial to creating repeat customers who are keen to engage with a brand and shout about the benefits of signing up.
And it’s not just stores that offer personal, targeted marketing. The leisure industry offers a host of benefits when you stay loyal to their brand, think Avios miles, Hilton Honours rewards, credit card points and even Starbucks rewards cards – they all want repeat customers who they know better, and they’re willing to go the extra mile to get them.
Private and Public Sector CRM Solution Differences | How Different Are They?
As thoughtful government executives continue to increase their focus on customer service and their constituent relationships, many are examining and adopting the Customer Relationship Management (CRM) software systems that have been proven so successful in the private sector for over a decade. Having retooled the technology to address government service delivery and having renamed the moniker to “Constituent” Relationship Management (also CRM), software manufacturers promote building a “single customer view” in order to achieve a “customer-centric” agency. In other words, most or all relevant governmental information on a citizen and their contacts with agencies will be accessible by one agent, be they serving the citizen in person or remotely. Thereby, the agent has a holistic view of the governments’ relationship with the constituent and is better suited to resolve issues and meet expectations.
That is certainly a worthwhile - if not idealistic – public service goal, but the thoughtful administrator also realizes that while there are similarities in providing customer service between the public and private sectors, there are also important differences. The following discussion illustrates the most salient similarities and differences between industry and government as seen through the lens of these diverse CRM software solutions.
Compare and Contrast Private Sector and Government CRM Systems
Alike: Principles and Technology
At the highest level, the use of CRM strategies and accompanying software solutions in the public and private sectors is similar in two fundamental ways. Both use use CRM to focus on the customer while helping improve service delivery and customer care and both use the same underlying technology and principles. The biggest difference between both sectors is the type of customer that each serves.
Different: CRM Goals
The implementation and operation of CRM software in the private sector often focuses on increasing sales, customer retention and profits. Of course, government agencies don’t sell many products or services, and most don’t expect CRM to increase revenue. In the public sector, CRM is primarily concerned with efficiently delivering services to citizens. In the private sector, the number of products and services are often in the thousands, while the services offered by a government, particularly at the state and local level, and generally range in the dozens to the hundreds.
Alike: Many Value Propositions
Many reasons that businesses use CRM also apply to the public sector: cost reduction, product and service delivery improvement, increased customer knowledge and better employee morale, among others. To achieve this, governments often use call centers and web-based interactions, called citizen self service, similar to online retail offerings.
Different: Customer Base
In the private sector, service delivery levels are often based upon the customers’ current or future financial value to the company. This often means that CRM strategy is used by industry to ensure that high value customers get the highest service, while as many transactions as possible are automated when addressing lower value customer needs. With firms, CRM systems are used to manage a large number of clients, using as small a number of processes as possible, to maximize a high number of products and services. Efficiency and customer segmentation drive operating margins and profitability.
In the public sector, each customer must be valued equally. Government’s goal is to provide each constituent with a service customized to their needs. CRM facilitates easier citizen transactions with governments so that the customer’s needs are understood and agencies can deliver the best services to address them. In the public sector, government CRM software addresses a very large number of constituents, using a small number of processes, to maximize a growing number of products and services. Efficiency in processes reduces costs.
Another key difference with regard to clients is that governments cannot choose their own customer base for most services. Priority users of some services are often the most disadvantaged and the least able to be active in the relationship. Meanwhile, commercial organizations can choose to simply ignore a section of populace if they wish. In other words, the private sector concentrates on the customers who buy actively and deliver most profit while government´s focus on the section of society that is most needy, often least wealthy, and least active.
Different: Customer Communications
Due to the nature of its constituency, to be effective government must offer channels that have universal reach and affordability. Public sector CRM systems typically offer and accommodate multi-channel communication, or in other words, customer contacts through email, postal mail, Internet, telephone, facsimile or in-person. This differs from the private sector, which has more control in dictating which CRM channels shall be used for varying types of customer and designated contacts.
Different: Customer Loyalty
While business CRM strategies aim toward client relationship building and recurring sales, public sector CRM strategy focuses on constituents and service delivery. Business clients are extremely fluid so capitalizing on the relationship and reducing client churn is a commercial requirement. Constituents are a more captive audience as they cannot shop elsewhere for government services, so brand loyalty is not a factor.
Different: Technology Restrictions
Notwithstanding Sarbanes Oxley compliance, the private sector has few restrictions on operational aspects of information technology, while governments are often faced with statutory requirements involving security, legal, and accessibility issues. Such constraints include preserving audit trails, assuring privacy, adapting to changing regulations, meeting section 508 certification for disabled persons, and security certifications.
In the public sector, one of the toughest issues with CRM software implementation is the internal resistance that management and technicians face. Some government workers have more freedom to resist change for personal, bureaucratic, personnel, or political reasons than do private sector employees, who are more responsive to management and tend to embrace technology as a necessary force for profitability and success.
While it is clear that there are significant differences in the CRM issues and environments faced by the public and private sectors, and that businesses should have an easier time in applying CRM systems, the underlying strategic value for government is clear. With constituents demanding more service and accessibility from Administrators, public sector CRM software technologies such as one-stop databases, call centers, multi-channel communication channels, and citizen self-service are the best solution for achieving process and cost objectives. With results which go far beyond improved service delivery and include sustained cost reductions, increased customer knowledge and better employee morale, CRM software implementation and post product environments offer great upside value. Although there are material differences in public and private sector use of CRM strategy, they share at least one glaring similarity – they both have much to gain from proven CRM software technology.
6.Draw a model for Store Execution System. Briefly describe its components.
Retailers lose millions of dollars per year due to inconsistent store-level execution of their corporate strategy. The cost impact of inconsistent execution is between 2-5 percent of annual sales. Uncoordinated corporate planning results in confusion and priority conflict in the stores; lack of two-way feedback prevents continuous improvement. Store managers are overloaded with communication and left to prioritize tasks on their own. Field managers, swamped by a glut of out-of-date MIS reports, fight fires reactively instead of providing leadership. Labor schedules are out of step with actual workload requirements. Even when tasks are completed, corporate struggles to verify compliance.
Reflexis solutions for Store Operations enable retailers to ensure consistent execution of their corporate strategy by all stores and recover the sales they would have otherwise lost. Reflexis solutions include Task Manager (for closed-loop task management) and Store Walk (for ensuring consistency from enhanced store walks and audits). Reflexis Store Execution solutions enable retailers to boost productivity, increase sales, and realize rapid ROI. Reflexis has repeatedly implemented its solutions in 21 weeks or less, across multiple store formats at some of the world’s largest retailers.
7.Relate Business Intelligence with e-retailing for successful execution of the business. Justify the relation by giving suitable example.
Electronic Commerce or e-commerce is the trade of products and services by means of the Internet or other computer networks. E-commerce provides customers with a platform to search product information through global markets with a wider range of choices, which makes comparison and evaluation easier and more efficient. Managers can make right decision only if they get precise information in a required form in right time. To this goal, recent development of information systems is oriented to business intelligence. Business Intelligence is rapidly becoming a major source to achieve competitive advantage and often aims to support better business decision-making, among others, in the sphere of e-commerce (online shopping).
The Paradigm Shift
As a small-to-medium online store owner, the resources are finite, which means that time and burn rate are critical factors to success. Without knowing which marketing activities are working, it will be waste of both time and money.
The online marketing space is in constant shift as new technologies, services, and marketing tactics gain popularity. In order for these business owners to survive and thrive, they need to be able to make better decisions faster. This is where Business Analytics and Intelligence comes into play.
Data in E-commerce Systems
Also, an E-commerce system produces a huge amount of data collection. Data has potentially great value. Data must be accepted, processed and appropriately presented.
This involves hundreds of reports to make sense of them. This is the main prerequisite for successful management. To adopt a right decision, managers have to get correct information in right time.
Data in the unstructured format (data from multiple sources) can be processed by the use of BI systems and then valuable information can be obtained for the purpose like decision-making. This helps the organization to find new customer segments, analyze trends or uncover new business opportunities, etc and opportunities can be sector specific.
Business Intelligence aims to support better business decision-making and also can be helpful in process of retaining existing customers and acquiring new customers.
Business Intelligence(BI) is a technology-driven process for analyzing data and presenting actionable information to help corporate executives, business managers and other end users make more informed business decisions.BI encompasses a variety of tools, applications and methodologies that enable organizations to collect data from internal systems and external sources, prepare it for analysis, develop and run queries against the data, and create reports, dashboards and data visualizations to make the analytical results available to corporate decision makers as well as operational workers. BI analysis supports both strategic and tactical decision-making processes.
The advantages enjoyed by market leaders and made possible by Business Intelligence include the high responsiveness of the company which are:
- Understanding and Recognition of customer needs
- Ability to act on market changes and
- New ways to generate revenues
- Optimization of operations and increasing operational efficiency
- Improving decision making and Quality analysis
Intelligence Decision Support System in E-commerce
Almost all requisite data for the decision making supporting e-commerce comes from CRM and ERP systems.
E-commerce companies have recently started to capture data on the Social Interaction between consumers in their websites, with the potential objective of understanding and leveraging social influence in customers’ purchase decision making to improve customer relationship management and increase sales.
Business intelligence systems are able to provide the managers quite a number of statistics dealing with customers and their environment. As important customer statistics can be considered, for example, matching sales revenues with site visitor activity, by week and month, in total and by product line, matching weekly and monthly sales with site visitor activity overtime (Trend Analysis), in total and by product line.
Following are list of Key Performance Indicators (KPIs) for E-commerce Industry:
Marketing Key Performance Indicators:
- Website Traffic
- Unique visitors versus returning visitors
- Time spent on site
- Page views per visit
- Referral sources
- Location of traffic
- Day part monitoring (when site visitors come)
- Newsletter subscribers
- Texting subscribers
- Chat sessions initiated
- Social Media followers
- Pay-per-click traffic volume
- Blog traffic
- Number and quality of product reviews
- Brand or display advertising click-through rates
- Trial downloads
Sales Key Performance Indicators:
- Hourly, daily, weekly, monthly, quarterly, and annual sales
- Average order size
- Average margin
- Conversion rate
- Shopping cart abandonment rate
- New customer orders versus returning customer sales
- Cost of goods sold
- Total available market relative to a retailer’s share of market
- Product affinity (which products are purchased together)
- Product relationship (which products are viewed consecutively)
- Inventory levels
- Product pricing
Customer Service Key Performance Indicators:
- Customer service email count
- Customer service phone call count
- Customer service chat count
- Average resolution time
- Concern classification
Advantages and benefits of business intelligence in the sphere of E-commerce can be summarized as:
- Business intelligence gives any firm the specific view of corporate data that is required for progress (quickly access sales, product and organizational data in any database).
- Insales and marketing, business intelligence offers new tools for understanding customers’ needs and responding to market opportunities.
- By providing financial planners with immediate access to real-time date, business intelligence builds new value into all financial operations including budgeting & forecasting.
- Business Intelligence supports decision-making with automatic alerts and automatically refreshed data.
- It provides performance monitoring for accelerated action and decision making.
- It makes companies possible to receive and process data from cross border business activities (above all from cross-border online shopping).
8.What do you mean by Visual Merchandising? How it is related with e-retailing? Explain.
Visual merchandising is a profession that involves displaying merchandise and décor in a store in a way that elicits a positive image of the store, gets customers´ attention and entices them to buy. Read on for more details about virtual merchandising, and get an overview of education options and the career outlook. Schools offering Communication Design & Interactive Media degrees can also be found in these popular choices.
Visual Merchandising Defined
Visual merchandising refers to anything that can be seen by the customer inside and outside a store, including displays, decorations, signs and layout of space. The overall purpose of visual merchandising is to get customers to come into the store and spend money. Visual merchandising includes how merchandise is presented as well as the store´s total atmosphere.
Visual merchandising starts on the outside of the store or its exterior presentation and carries on to the interior presentation. It may involve the ability to create window displays in fashionable colors and patterns that make customers think the store has what they´re looking for and the art of creating other types of displays or dressing mannequins. Keeping up with trends and fashions in the design industry can be useful for these purposes. Visual merchandising also includes determining in-store traffic flow patterns to calculate the best places to put displays so the greatest number of people will see them.
Materials and Methods
Multiple considerations go into effective visual merchandising. Visual merchandising involves using the following elements appropriately:
- Flooring, such as carpet, tile or marble, which can affect what the customer buys
- Lighting (types and brightness), which can affect how displays appear to customers
- Décor (colors, wallpapers and shelving), which affect the overall atmosphere of the store
- Mannequins´ clothes and body language that help to convey an overall impression
- Display design, which must be done properly, taking into consideration harmony, lighting, color, emphasis, rhythm, proportion and balance - design principles
- Exterior signage along with marquees, banners and awnings, which tell the customer what the business is about and provide a first impression
- Walkways and entries that should blend into the building´s overall design
- Landscaping that can aid in attracting a customer´s eye to a sign
- Window displays that get the shopper´s attention and welcome them into the store
- Education Options and Career Outlook
Visual merchandising training programs are available at the certificate, associate´s degree and bachelor´s degree levels. Coursework may cover retailing, display graphics, styling, color theory, interior design, fashion analysis, finance and marketing communication. Internships, co-ops and other work experiences are often included in the curriculum.
Online job postings for visual merchandisers from January 2016 revealed that employers preferred applicants with previous experience, usually equivalent to two to three years. Completing practical training during a degree program could help one get a job. A degree in fashion merchandising, fashion design or industrial design can also prepare individuals to enter a career in visual merchandising.
When you’re selling products online, all the customer has to go by are your images and descriptions of the products. Also, customer reviews. The more enticing your product looks online, the more inclined a customer will be to purchase it. (Other factors, like pricing, customer service, and ease of their online shopping experience, are also in play, of course.)
Did you know that some companies actually hire prop stylists to stage their products for photo shoots? A lot of these same companies are also even using techniques like cross merchandising (showcasing merchandise from different but related categories together) in some of their images to increase their sales by showing customers different ways to use their products, which can encourage add-on purchases. In essence, they’re appealing to a customer’s ideologies, lifestyle, or personal sense of style in hopes of meeting more than one of their needs (or “needs,” as they may be).
People want to be inspired when they go shopping no matter where they do said shopping: inspired to eat healthier, inspired to dress better, inspired to work better… Whatever the case may be, visuals that inspire sell.
One of my favorite brands is Anthropologie. They sell knee-high boots for $200+ that I can’t usually afford and yet they are always on my mind, I always find myself in their stores, and sometimes…I even buy their stuff, often online. Why? Because they are totally invested in their customer’s complete shopping experience (both in-store and online) and they inspire me—from the whimsical ambiance of their stores (visuals, scents, music) to their charming web design and product images of their extended collections not shown in their stores, down to the smallest details in the way their merchandise is delivered to the customer, even. Their packaging is so thoughtful and comes with a quaint little letter, something I will always remember.
I may not always be able to afford their items, but because they constantly inspire me in both their stores and online and make it so easy to find stuff on their website, when I am ready to make a purchase I eventually find my way back to them and am thrilled to do so. Were they a company with crap, boring or misleading images on their website, I’d be a lot less inclined to buy anything (else) from them.
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A fashion retailer had a customer loyalty program. We analyzed the customers’ transaction data and enhanced it with our geo-demographic, Cana Code lifestyle cluster, consumer spending, product usage, shopping behaviour and psychographic data. We performed store trade area analysis to identify gaps and potentials of the stores; simulated store openings in order to minimize cannibalization and store closings in order to minimize attrition of the loyalty program. We combined the market basket analysis with customer segmentation and established a linkage between customer lifestyle with merchandize. We used factor analysis to consolidate the high dimensional data into powerful predictors. Thereafter we conducted an adaptive cluster analysis and identifies 7 distinct clusters among the customer base, for examples, Loyalist, Discount Hunter… This enabled the client to tailor communications and offerings by customer segment. The lift compared with the control cell in the subsequent campaigns has been systematically over 150%.
1.Explain how e-rtailing will help the above fashion retailer to increase his sale?
One of the most exciting and nerve-wracking aspects of retail is determining what price to sell your products at. Pricing is both an art and a science that requires an experimental attitude coupled with an intuitive feel for how you want your brand and by extension your products to be perceived.
Price your products too low and you might get a ton of sales but you might find yourself going under when you tally up your expenses at the end of the month.
When you price your products too high, you might give off an aura of luxury, prestige, and exclusivity thereby attracting a more well-off clientele which is smaller in number but makes up for volume by purchasing your products at the higher price. However, what if you´re in an area where the demographic is especially price-sensitive, then what will you do?
Ultimately, you´ll have to decide whether you want higher prices for your products and a lower volume sold or lower priced products and higher volumes sold, and which direction will enable you to achieve profitability.
Keep in mind though that when you have a range of products, you can sometimes risk lowering prices for one as long as you also sell products that are marked up higher.
Manufacturer Suggested Retail Price (MSRP)
As the name suggests (no pun intended), this is the price the manufacturer recommends that you as a retailer use to sell their products to the general consumer. The reason manufacturers first started doing this was to help standardize prices of products across multiple locations and retailers.
However, a lot of factors go into the end retailer going along with the MSRP, such as the bargaining power of the manufacturer and exclusivity of the product, but for the most part, you’ll find the more mainstream or conventional the product, the more you can expect the prices to be standardized.
Pros: As a retailer, you can save yourself some serious headache by taking yourself out of the decision-making process and going with the flow.
Cons: You’re unable to carve out or sustain an advantage over any of your competitors by being able to compete on price or availability.
2.Describe various types of transactions required by the retailer mentioned in above case study.
A social arrangement which pursues collective goals, which controls its own performance and which has a boundary separating it from its environment.
Organisations can include businesses such as companies and partnerships, clubs, charities, government departments, hospitals and schools.
Even if not strictly a ‘business’ all organisations will have business transactions. Typically these will include:
- Purchasing goods and materials. Purchases can be for cash or credit. Cash purchases are paid for immediately and are fairly rare in most businesses. Credit purchases are paid for after some time, typically a month or so
- Purchasing services, for example, repair s to equipment, advertising, printing costs.
- Cash sales, for example in shops, are paid for immediately. Credit sales are paid for after some time.
- Paying wages and salaries.
- Purchase of non-current assets.
- Raising finance and paying rewards to the suppliers of finance. For example, owners putting in capital or loans being raised from banks. Owners of the business expect rewards based on a share of the profit; banks usually expect interest to be paid.
- Accounting for and paying tax.
- Movements of cash and money in the bank account. These movements usually arise from the transactions above.
All to these transactions are summarised at the end of accounting periods into two statements:
- Statement of financial position Assets (amounts owned) and Liabilities (amounts owed).
- Income statement Income (such as sales) less expenses (such as rent, wages, electricity, raw materials). If income is greater than expenses, a profit will result.
In the statement of financial position, assets are divided into:
- Non-current assets such as equipment, premises, motor vehicles. These are kept long-term in the business.
- Current assets such as inventory (stock) receivables or cash. These either are cash or will become cash within 12 months.
Liabilities are divided into:
- Current liabilities such as amounts that have to be paid to suppliers (trade payables). These liabilities have to be settled within 12 months.
- Long-term liabilities These don’t have to be settled until at least 12 months time