THE FLOW OF INFORMATION IN RETAILING

Electronic Data Interchange (EDI) It is a computer to computer exchange of business documents from retailers to vendor and back. It involves retailers and suppliers regularly exchanging information through their computers on inventory levels , delivery times , unit sales , and so on , of particular items Stores can communicate with suppliers and send documents such as purchase orders, stock and sales information over third part communications networks . Once known as Electronic Data Interchange (EDI), the term ecommerce (electronic commerce) is now preferred. Stockholding (or inventory) is one of the retail sectors largest costs. Tight control over inventory-exactly what is on stock, what is on order, what new items are out of stock, what potential problems exist- is a necessary requirement for modern retailers . Computerised ordering speeds up the stock ordering process , thereby cutting costs including costs of safety stock and providing information More information available on the in-class EDI Lecture presentation! Advanced Shipping Notice

An Advance Shipment Notice (ASN) is an EDI formatted

electronic notification of pending deliveries; an electronic packing list. The ASN can be used to list the contents of a shipment of goods as well as additional information relating to the shipment, such as order information, product description, physical characteristics, and type of packaging, marking, carrier information, and configuration of goods within the transportation equipment. The ASN enables the sender to describe the contents and configuration of a shipment in various levels of detail and provides an ordered flexibility to convey information The ASN is noteworthy in that it is a new concept in logistics, enabled by the advance of modern communication methods. -Although it provides information similar to the Bill of Lading, its function is very different. While the Bill of Lading is meant to accompany a load on its path, the goal of the ASN is to provide information to the destination's receiving operations well in advance of delivery. Modern receiving operations rarely have time to break down a shipping unit (carton or pallet) and identify its components, depending instead on quick scans of barcodes on shipping labels. An ASN can provide a list of all of the barcoded ID numbers of the shipping units and the contents of each. The time required to receive the load, then, is greatly reduced.

Finished Vehicles: An ASN usually includes date of freight availability, equipment number, routing, freight identification, origin, and destination, and other necessary information. Sent by plant or carrier in advance of arrival. Materials: Sent after dispatch from origin: includes supplier of record, conveyance number, actual departure date/time, destination, with a list of part quantity released.

Quick Response Delivery System (QR) Delivery System

Enables a retailer to reduce the amount of inventory it keeps on hand

by ordering more frequently and in lower quantities. QR is a system designed to reduce the lead time for receiving merchandise , thereby lowering inventory investment , improving customer service levels, and reducing distribution expenses , also known as just-in time inventory management. QR usually requires effective communication network between the vendor and retailer which can be achieved through EDI. Benefits of QR Reduces lead time Increases product availability Lowers inventory investment Reduces logistics expenses . Costs of QR system Smaller orders are expensive to transport Greater order frequency makes deliveries and transportation more difficult to coordinate. Both parties must purchase computer hardware and their software. Usually vendors absorb many of these expensive logistics costs. Database Retailing-

A database is a collection of information that is organized so that it can

easily be accessed, managed, and updated.

Retailing refers to the activities involved in selling goods and services

directly to consumers

Database retailing thus refers to the process of selling goods and

services directly to consumers by making use of organised , managed , updated and easily accessible information about various stakeholders for example information pertaining to suupliers and customer. -A database of record (DBOR) is a repository for centralized storage of information about objects or people. This type of database is commonly maintained by businesses to store information about subscribers, clients or

customers, facilitating optimal service-oriented management (SOM). Examples of DBOR applications include use by:

Internet search engines or Web sites to track user behavior for targeted promotions. Manufacturers to keep track of supplies and product information. Wholesale and retail vendors to keep track of inventory. Hospitals and clinics to manage patient information. Retail stores to keep track of customer shopping habits.

Advantages of using a DBOR to centralize customer data include:

Tailoring services to individual users or subscribers. Targeting special promotions to customers most likely to respond. Optimizing customer services and technical support. Personalizing the customer-vendor relationship.

In addition to customer-service applications, a DBOR can be used by law enforcement, security and military agencies to k eep track of crime suspects and other potentially dangerous individuals or organizations. Database marketing Definition of Database Marketing

The collection and analysis of information about customers and their

buying habits, lifestyles, and other such data. Database marketing is used to build profiles of individual customers, who are then targeted with customized mailings, special offers, and other incentives to encourage spending. Database marketing is a form of relationship marketing. It is marketing and sales system that contineously gathers, refines and utilises information and data that then drives relevant marketing and sales communication programmes. DB marketing describes a way of organising a retail organistions total marketing and sales process Purposes of Database retailing. Enables a retailer to work more intelligently , knowing better his customers and their spending patterns It provides tools to make more accurate assessments Enables an organisation to target specific group of people with specific messages about a product that is important to them rather than giving irrelevant uninteresting information. proper use of databases gives the retailer marketing tools to improve the effectiveness of mkt campaigns saving time and money.

Collecting Data about the customer Data about what the individual shoppers buy can be collected and analysed. This can be useful in coming up with decisions about product extension , promotions and communications Customer Database Collection of records of consumer purchasing patterns and histories stored in a computer system and organized so that it can be retrieved quickly to provide information for a variety of uses. Information contained in a customer database is obtained from store receipts, credit card purchases, mail-order requests, information inquiries, and other sources demonstrating customer preferences or predisposition to purchasing a product. Customer databases are useful to marketers when planning promotions for new products, repeat sales, or cross-selling techniques. Benefits of customer databases 1) Development of relationships with customers. The creation of customer databases can enable a retail organization to create mutual beneficial relationships with its customers. Through the customer DB, management will identify key customers and will tailor make marketing programmes aimed at satisfying the key customers needs. This will improve relations between the retail organization and its customers. The business organization will also benefit from an intangible asset, goodwill 2) Customer DBs can also lead retention of customers. The organization will quickly realize customer dissatisfactions. Retailers should therefore come up with effective means of tracking customer satisfaction so as to retain their customers. This is because attracting new customers is more expensive than retaining old ones. Ways of tracking customer satisfaction

conduct customer satisfaction survey interviews focus group discussions. lost customer analysis-exit interviews, monitor customer loss rate, complaints and suggestion systems (suggestion boxes, customer hotlines/toll free numbers, comment cards)

3) Determination of the life time value of a customer.

-A customer goes through a lifecycle. Gathering of consumption behaviour of a customer provide the retailer with information on the value that a customer is likely to add to the organization 4) Direct marketing - Products, communications, pricing and distribution can be customized for the customer. Customers can provide such information as their names, addresses, phone number and other contact details, and other references such that the organization can provide the customer with customized services. 5) Customer Database as a competitive tool -Creation of a customer database can give an organization a sustainable competitive advantage within an industry. Management should ensure that everyone within the organization has access to customer DB so that customers can be saved competitively.. A customer DB can be an effective competitive tool in the following ways a)provides means of research to support decisions such that decisions passed will enable the organization to fight competition b)provides profiling of customers by searching for prospects , who are similar to existing customers. This can help to increase the customer base of a retailer c) Provides means of implementation of profitable programs to ensure repeat purchases.. d) Assists in market planning and forecasting. Proper market planning forecasting can help to fight competition. e) Helps to select media that fits the profile of existing customers. f) Maximize personalization of all offers to each customer. This helps to create loyal customers who may find it difficult to switch to a competitors product g) provides the organization with far ongoing interaction with customers and prospects. h) Pinpoint ideal timing for the retailers promotions. This can be dependent on the type of customers that a retailer saves. Good timing will give a retailer an upper hand in the market. i) The idea of a database also demonstrates that customers are valuable to the organization. and