The International Foundation for Information Technology (IF4IT) provides three

definitions for Information Technology:

1. The technology used for the study, understanding, planning, design, construction,
testing, distribution, support and operations of software, computers and computer related
systems that exist for the purpose of Data, Information and Knowledge processing.
2. The industry that has evolved to include the study, science, and solution sets for all
aspects of Data, Information and Knowledge management and/or processing.
3. The Organization in an enterprise or business that is held responsible and accountable
for the technology used for planning, design, construction, testing, distribution, support
and operations of software, computers and computer related systems that exist for the
purpose of Data, Information and Knowledge management and/or processing.
The Information Technology Association of America (ITAA) defines Information
Technology as:
"The study, design, development, implementation, support or management of computerbased information systems, particularly software applications and computer hardware."
IT deals with the use of electronic computers and computer software to convert, store,
protect, process, transmit, and securely retrieve information.
The combination of telecommunication and computer science for the capture, storage and
transmission of information to every nook and corner of the world is said to be IT.

Definition of INFORMATION TECHNOLOGY

: the technology involving the development, maintenance, and use of computer systems,
software, and networks for the processing and distribution of data

First Known Use of INFORMATION TECHNOLOGY

1978
Definition of information technology
the study or use of systems (especially computers and telecommunications) for
storing, retrieving, and sending information: [as modifier]: information
technology consultants

The importance of information technology in retail

The importance of information technology in retail stems from the importance of data.
Data is nothing but information that aids decision making. The right data, in the right
form to the right setoff people at the right time, is one of the greatest tools in the hands of
the retailer. Information is always with reference to a particular time frame.
Let us consider an example of a customer at a department store. After selecting some
goods he proceeds towards the billing counter. Here the billing clerk scans each product
at the POS (Point of sale) terminal the total number of items and the bill amount is added
up. While doing so he has so checked with the customer if he is a member of the stores
loyalty program. The customer confirms that he is, gives him the store card for entry
makes the payment by way of credit card and exits the store with his purchases.
While to the customer it is just a routine purchase, let us look at the information that the
store has gathered from this transaction and how the information helps the retailer;
Efficient Stocking of merchandise
The items purchased provide information on merchandise sold in the store; this is the
basis of sales analysis and decisions on replenishment re-ordering and merchandise
planning. If this information is passed on to the manufacturer; it can help reduce
production time. This is particularly true in case of fashion items, which have a very short
life cycle. For example data gathered in this manner may indicate youngsters buying
certain styles in Jeans or colors, in the tee shirts from the store. To service this section of
the audience the retailer may need replenishments faster. The use of technology aids the
collection and transmission of information. The trends in sales can be analyzed. This
helps avoid situations of stock out helps spot merchandise or products timely markdowns
and higher inventory turns.
Collection of Data
The use of technology aids data collection. Data can be collected about consumers, their
purchases the frequency of their buying and the typical basket size. This information
helps the retailer distinguish the customers who shops at his store frequently and also
reward them. For example information gathered about a customer may reveal preferences
for certain brands; this may be used for further communication with the customer
regarding promotional offers etc. The data on purchase made is also passed on to the
credit card organization for payment to the merchant establishment and also for billing
the customer.
Efficiency in Operations

The use of information technology serves as a basis for integrating the functioning of
various departments. When a retailer decides to use the power of technology to aid
business, the investment in terms of money is usually high. However the benefits of the
use of information technology are many. As the process gets automated the time involved
in particular task is reduced. For example, a person manually billing a customer for
purchase made will take a longer time as compared to a person who is needed to scan in
the items using the point of sale systems.
Helps Communication
Communication within the organization can be faster with the use of software like Lotus
Notes. Retail stores can also communicate with each other and with the warehouses. This
can be done 24 hours a day and seven days a week. Electronic Data Interchange (EDI)
can also be used for communication with suppliers and vendors.
The information needs of the retailer largely depend on the size and the spread of the
organization. In most cases a small boutique operator or a small retailer like the baniya
can do manual billing and gather a fair amount of information by making a phone cal or
making a personal visit to the store.
With an increase in the number of stores and /or an increase in the number of products
sold in the store, gathering of information becomes crucial Technology plays a vital role
in gathering this information and making it available to the right set of persons.

Applications of Information Technology in Retailing

Introduction
"Retailing includes all the activities involved in selling goods or services directly to
final consumer for their personal, non business use".
Retail is all about selling, selling big and selling huge. It's all about ensuring that the
customer first of all comes to the store and then buys. This also means that one
should connect to the customer and should be able to hold him in one place and give
him all that he desires from one location.
One of the key factors in achieving an organized and efficient retail operation is the
use of technology as an enabler . Information Technology is the key enabler to
improving customer satisfaction, operational efficiencies and by extension,
profitability. Technology has been the great enabler of business and especially retail
enterprise. We are now wireless and seamless and cashless and everything less and
can get any information we want and need.

A typical pan national retail operation would have multiple regional warehouses,
offices and retail outlets. In such an operation, how does the headquarters know the
daily turnover at each of its outlets, how does it know which products are selling the
most in which region at which outlet, how does one store know if a stock out item
in its own inventory is available at another store location for whom it is slow moving
item? Most of these issues can be solved by the appropriate use of technology.
Need of Information Technology in Retailing
Information Technology
Information technology, as defined by the Information Technology Association of
America (ITAA), is " the study, design, development, implementation, support or
management of computer-based information systems, particularly software
applications and computer hardware." Encompassing the computer and information
systems industries, information technology is the capability to electronically input,
process, store, output, transmit, and receive data and information, including text,
graphics, sound, and video, as well as the ability to control machines of all kinds
electronically.
Information Technology's Role Today
Every day, people use computers in new ways. Computers are increasingly
affordable; they continue to be more powerful as information-processing tools as well
as easier to use.
Computers in Business One of the first and largest applications of computers is
keeping and managing business and financial records. Most large companies keep
the employment records of all their workers in large databases that are managed by
computer programs. Similar programs and databases are used in such business
functions as billing customers, tracking payments received and payments to be
made, and tracking supplies needed and items produced, stored, shipped, and sold.
In fact, practically all the information companies need to do business involves the
use of computers and information technology.
How Information Technology involved in Retailing Operations
* Forecasting: Forecasting is the process of estimation in unknown situations. It's
an essential and very important process in any business organization. Business
leaders and economists are continually involved in the process of trying to forecast,
or predict, the future of business in the economy. Business leaders engage in this
process because much of what happens in businesses today depends on what is
going to happen in the future.
1. Retail Demand Forecasting: Modern demand-forecasting systems provide new
opportunities to improve retail performance. Although the art of the individual
merchant may never be replaced, it can be augmented by an efficient, objective and
scientific approach to forecasting demand.
Large-scale systems are now capable of handling the mass of retail transaction data
organizing it, mining it and projecting it into future customer behavior. This new
approach to demand forecasting in retail will contribute to the accuracy of future

plans, the satisfaction of future customers and the overall efficiency and profitability
of retail operations.
* Inventory Management: Inventory can be either raw materials, finished items
already available for sale, or goods in the process of being manufactured. Inventory
is recorded as an asset on a company's balance sheet.
To optimize the deployment of inventory, retailers need to manage the uncertainties,
constraints, and complexities across their global supply chain on continuous basis.
This allows them to improve their inventory forecasting ability and accurately set
inventory targets. An IT solution is a proven and market leading solution for
determining optimal time-varying inventory targets for every item, at every location
throughout supply chain. This allows retailers you to significantly reduce inventory
without adversely affecting service levels.
* Store Management: Another example where Information technology can be
beneficial is a store management. That alerts out-of-place or stock-out items. A
store, commonly a shop or stall for the retail sale of commodities, but also a place
where wholesale supplies are kept, exhibited, or sold. A place where something is
deposited for safekeeping is called store.
The in-store system use magnetic strips or barcodes or RFID to monitor actual
versus intended product location on the floor or in the stockroom.
Retail's Complexity: the Information Technology Solution
Much of the retail operations functionality is driven by customized point solutions in
areas such as merchandizing, supply chain management, in-store operations,
seasonality and promotions planning. This means the underlying IT systems to drive
operations are equally complex.
IT systems are at the heart of retail operations and hence play a central role in
alleviating pressure points in the retail sector. The converse also holds trueretailers
who do not manage their IT landscape effectively will find that, in time, the IT
systems become part of the problem rather than components of the solution.
There are two critical areas where IT can reduce
FUNCTIONAL RETAIL AREAS
Merchandizing systems impact top-line revenues and need to be configured,
customized and managed effectively for the retailer to improve its top line. To
achieve this, retailers need to effectively mine large amounts of data and leverage
this data to carry out effective forecasting, assortment planning, and collaboration
with its suppliers so that promotions and other merchandizing activities are effective
and efficient. Supply chain systems are key from a bottom line point of view as they
play a key role in getting the right product to the right place at the right timewhich
in turn impacts the inventory levels and the rate of flow of products through the
retailer's stores, both of which are significant components of the retailer's cost of
doing business.
DATA CLEANSING AND ARCHITECTURE IMPROVEMENT

Data cleansing, and thereafter, effective mining (via large data warehouses) is
fundamentally important in the retail space because so much decision-making is
based on data. If the data is bad, the effectiveness and efficiency of carrying out
retail operations is hampered. This becomes particularly crucial when the retailer is
implementing new systems and a large data conversion effort is requiredit
becomes essential that the old data be effectively cleaned, re-architect and made
ready in the new system, so that the business functions can make decisions
effectively.
In challenges, place ever-greater demands on retailers. It systems are at the
complexity of products, scale and processes, along with supply chain heart of retail
operations and hence play a central role in alleviating pressure points in the retail
sector.

The High Technology Retailing Environment

New Technologies Evolved in Retailing
1. Radio Frequency Identification (RFID)
Radio Frequency Identification in the retail industry has solved major problems
related to customer services. With the help of RFID it becomes easy for the sales
staff to locate a particular item in the store and check its availability in less time.
It's a data collection technology that uses electronic tags for storing data. The tag,
also known as an "electronic label," "transponder" or "code plate," is made up of an
RFID chip attached to an antenna. Transmitting in the kilohertz, megahertz and
gigahertz ranges, tags may be battery-powered or derive their power from the RF
waves coming from the reader.
Like bar codes, RFID tags identify items. However, unlike bar codes, which must be
in close proximity and line of sight to the scanner for reading, RFID tags do not
require line of sight and can be embedded within packages. Depending on the type
of tag and application, they can be read at a varying range of distances. In addition,
RFIDtagged cartons rolling on a conveyer belt can be read many times faster than barcoded boxes.
RFID in retail helps in the following ways:
(a) Improves the level of customer service
(b) Increases customers loyalty
(c) Better Inventory Management
(d) Item level tracking

The future of RFID is very bright in retail sector, as right from inventory management

to product manufacturing, this system provides a more efficient and advanced retail
experience to both the customer and the seller.
2. Smart Operating System
Supply chains can look very different from industry to industry. But companies across
industries share a common challenge -- finding ways to better manage growing
uncertainty and complexity to improve supply chain performance.
To improve their supply chains, companies across industries have made sizable
investments in a range of technology solutions, yet significant profitability
improvements have remained elusive. Largely unaddressed has been the opportunity
to use enterprise and supply chain data to support key inventory planning decisions
that fuel execution systems and activities -- something beyond a mere spreadsheet
or desktop solution.
SmartOps customers are proactively managing supply chain uncertainty across all
stages to improve their total chain inventory planning, so that their customer service
levels can be stabilized and even increased while overall costs to the business are
minimized.
SmartOps enterprise software solutions support many initiatives and challenges
associated with different manufacturing and distribution industries from Lean
Manufacturing, Just-In-Time (JIT), and Six Sigma initiatives, to postponement
strategies, to Collaborative Planning, Forecasting, and Replenishment (CPFR), and
Sales & Operations Planning (S&OP) activities.
SmartOps inventory optimization algorithms manage uncertainties in the data and
offer visibility into the drivers of inventory at the item-location-time period level of
detail. SmartOps is able to do that because it looks at the right granularity of data to
adequately manage safety stock levels and understand where the biggest ongoing
opportunities for improvement are within their supply chains.
3. Point of Sale
Capturing data at the time and place of sale. Point of sale systems use computers or
specialized terminals that are combined with cash registers, bar code readers, optical
scanners and magnetic stripe readers for accurately and instantly capturing the
transaction.
Point of sale systems may be online to a central computer for credit checking and
inventory updating, or they may be stand-alone machines that store the daily
transactions until they can be delivered or transmitted to the main computer for
processing.
Point of sale (POS) systems is electronic systems that provide businesses with the
capability to retain and analyze a wide variety of inventory and transaction data on a
continuous basis. POS systems have been touted as valuable tools for a wide variety
of business purposes, including refining target marketing strategies; tracking supplier
purchases; determining customer purchasing patterns; analyzing sales (on a daily,

monthly, or annual basis) of each inventory item, department, or supplier; and

creating reports for use in making purchases, reorders, etc.
Basic point of sale systems currently in use includes standalone electronic cash
registers, also known as ECRs; ECR-based network systems; and controller-based
systems. All function essentially as sales and cash management tools, but each has
features that are unique.
Conclusion
This result demonstrates the significant role of information technology in today's
business world and in retail management. It indicates that a sound Information
Technology system is imperative to success in large format retail. IT system can be
leveraged to increase efficiencies in supply chain and vendor management as well as
centralize their control.
The findings from this study shows that with an efficient IT system a retailer can
observe sales and consumer behavior more efficiently and accurately and thus plan
its sourcing and customer promotions more effectively. This result also lead to the
conclusion that use of new technologies in retailing helps to increase customer
loyalty and customer satisfaction. An IT system is also beneficial for various retailing
related operations.
Retailers need to understand that technology is not a sunk cost but rather an
investment to reduce heavy long-term costs. It is an investment to maintain
competitive advantage for long-term growth.

Introducing the 6th Pillar of Retail:

It started out with 4 pillars (or 4Ps): Product, Promotion, Price and Place. People
did not count for much back then. In early 1980s with the revolution in management
fueled by such publications as In Search of Excellence, Re-inventing the
Corporation and many others, suddenly people woke up to the importance of
people and added that to the retail arsenal. Were now able to talk about the 5th
pillar of Retail; People.
At DMS Retail, we believe a strong contribution from all pillars of Retail is necessary
to achieve the success that any retailer strives for. We have seen many examples of
failed businesses when they neglect to keep an eye on all the pillars or prefer to
focus on one more so than the others.
The objective of this short article is not to get into the nitty gritty of how we should
be looking after all the pillars - we have produced success guides and tools to do that
and you can find those on our website.

What we want to do, though, is to announce yet another and very powerful pillar of
Retail. We call it the Pixel to remain in compliance with the P convention. It
stands for technology. Now, we talk about 6Ps of Retail.
Increasingly, technology is playing ever more influential role in retail success.
Information Systems, starting with customer records, inventory control, loss
prevention, supply chain, workforce management and business intelligence changing
the efficiency and effectiveness of retail operations to a point where retailers who do
not embrace the technology move to the forefront of businesses that are doomed to
fail.
So, this is a little advice from your friends at DMSRetail to you, to acknowledge and
embrace technology as one of the pillars of retail and to view it as something that
will help your profitability immensely and overall success of your business.

RETAIL MANAGEMENT INFORMATIONSYSTEM

Retail Management Information System anticipates the informationneeds of retail
managers, collects, organises and stores relevant dataon a continuous basis; and directs
the flow of information to theproper decision makers

ADVANTAGES OF A GOOD RIS

1 Information collection is organised and is broad in scope
2.Data are regularly gathered and stored, thusopportunities can be foreseen
and crisis avoided
3.Elements of strategy can be coordinated
4.New strategies can be devised more quickly
5.Quantitative results are obtainable and costbenefit analysis can be done
DATA-BASE MANAGEMENT

Data-base management is a procedure usedto:

gather
integrate
apply
andstore informationrelated to specific subject areas.It is a key element in
RIS and may beemployed with customer databases, vendordatabases,
category databases and so on.
DATA-BASE MANAGEMENT
4

Retailers can use these databases for:Frequent shoppers

programCustomer analysisPromotion evaluationTrading-area
analysisJoint promotions with manufacturersMedia
planningCustomer communicationThere are two specific aspects of databasemanagement: data warehousing and datamining and micromarketing.
DATA WAREHOUSING

Data warehousing is the mechanism for storing anddistributing information whereby copies
of all thedata bases are maintained in one location andaccessible to employees at any
locale.There are four components to a data warehouse:1.The data warehouse,
where the data arephysically stored.
2
.Software to copy original data bases and transferthem to the
warehouse.3.Interactive software to allow inquiries to beprocessed.4.A
directory for the categories of informationmaintained in the warehouse.
Data warehousing has three majoradvantages: B o t h i n f o r m a t i o n
a c c e s s a n d inconsistency problems are eliminated byconsolidating data in one
place. E x e c u t i v e s a n d o t h e r e m p l o y e e s c a n quickly get access to
the same data atthe same time no matter where they arelocated. By storing
information centrally, greaterdata analysis are possible.
DATA MINING

7
Data mining involves the in-depth analysis of information so as to gain
specific insights aboutcustomers, product categories, vendors and so
forth.The goal is to determine whether there areopportunities for tailored
marketing efforts thatwould result in better company performance.
MICROMARKETING
8
One emerging application of datamining is micromarketing, wherebythe
retailer uses differentiatedmarketing and develops focusedretail strategy mixes
for specificcustomer segments, sometimes fine-tuned for individual shopper.

FACTORS AFFECTING THE USE OF RIS

1.SCALE AND SCOPE OF OPERATIONS
2.FINANCIAL RESOURCES AVAILABLE TOTHE ORGANISATIONS
3 .NATURE OF THE BUSINESS
4.HUMAN RESOURSE AVAILABLE