IMPACT OF IT IN

RETAILING
Unit 5

Syllabus
Non store retailing
The impact of Information Technology in
retailing
Integrated systems and networking
EDI
Bar coding
Electronic article surveillance
Electronic shelf labels
customer database management
system.
Legal aspects in retailing.
Social issues in retailing. Ethical issues in

Retail Stores
Astorethat sells smaller quantities of
products or services to the general public. A
business that operates as aretailoutlet
will typically buy goods directly from
manufacturers or wholesale suppliers at a
volume discount and will then mark them
up in price for sale to end consumers

Retail stores can be broadly classified

into two categories, i.e. store based
retailers and non-store based
retailers.
A. Store based retailer

Store based retailer

I. On the basis of ownership
1. Independent retailer: An
independent retailer is one who owns
and operates only one retail outlet.
Such stores can be seen under
proprietorship.Local Kirana store,
panwala, clothe merchant, and some
modern small-sized stores and
showrooms are examples of
independent retailers.

2. Chain Retailer:It is a type of ownership in

which two or more retail outlets are under
common ownership. It is also known as
corporate retail chains. The stores exhibits
similarity in term of merchandise they sell,
advertising, services, etc. For example,
Arrow of Arvind Mills, Wills Sport of ITC,
Shoppers Stop, Food World, etc.
3. Franchise: A franchise is a contract or
agreement between franchiser (company or
producer) and the franchisee (retailer) to
conduct business under the established
name as per specific business format. There
can be two type of franchising trade mark
franchise and business format franchise.

4.

Leased Departments: When a retail

department is leased or rented to an outside
party, it is turned as leased department.
Many malls, departments, multiplexes, etc.,
are operating on lease
5.
Consumer
Cooperatives:
Consumer
cooperatives
or
consumer
cooperative
societies are owned by their member
consumers. They run on cooperative basis.
Sahakari Bhandar and Apana Bazaar in
Mumbai, Super Bazaar in Delhi, Kendriya
Bhandar by the government, etc., are
example of consumer cooperatives.

II. On the Basis of Merchandise offered

1. Convenience Stores: Small retail stores
offering essential goods which remained open
for long hours and all the days of week and
located near residential areas are referred to
convenience stores. They sell bread, milk,
grocery products and other essential items.
2. Supermarkets: They are large in size, selfservice operations, and based on high volume
and low margin. They sell food, healthcare
and beauty care products, groceries, and
other non-food items. Nilgiris, Food world,
Food
Bazaar,
and
others
are
major
supermarkets in India.

3.

Hypermarket: It is a combination of
supermarket and departmental stores. They
offer variety of food and non-food items like
clothes,
jewellery,
hardware,
sport
equipments, cycles, motor accessories, books,
electronics and electrical appliances, etc. They
offer products at cheapest possible prices.
Carrefour, Wal-Mart, Meijer, Target, Tesco, etc.,
are famous supermarkets. Big Bazaar, Star
India Bazaar, Giant, etc., are example of Indias
supermarkets.

4.

Specialty

Store:

This retail store

specializes in a particular merchandise or
single product of consumer durable like
furniture,
jewellery,
household
goods,

5. Departmental Store: It sells different types

of goods all under one roof. Along with
products, they also offer new customer
services like reading rooms, restrooms, home
delivery, wrapping services, etc. Some of
major departmental stores in India include
Shoppers Stop, Globus, Websites and
Lifestyle, etc.
6. Off Price Retailers: They sell merchandise
at less than retail prices. They buy from
manufacturers the seconds, overruns, and off
seasons at a deep discount. Such stores are
owned by manufactures or departmental
stores. Pantaloon Factory Outlets and Levis
Factory Outlets are example of off price

7. Catalogue Showrooms: Normally, they

specialize in hard goods like house ware,
jewellery, and electronics. Customers walk
into the showroom and refer catalogue of
products they want to buy. Sometimes, they
have to write the product code number on a
chit and handover to salesmen.

B. Non-Store Retailing
A direct relationship of the retailer
with his customer is on the basis of
non-store Retailing. In India around
twenty percent of retail sale is from
non-store.
There are several forms of nonstore retailing:
i. Direct Selling
ii. Mail Order
iii. Telemarketing
iv. Cyber Marketing

 Direct Selling: It consists of making direct

contact with the end consumers at home, at
work, at office, or at any convenience place.
Cosmetics, jewellery, garments, foods, home
appliances are sold directly to customers. For
example, salesmen can sell these products to
consumers. It also includes network
marketing in which every the consumer is
both a consumer as well as a seller.
Mail Order Retailing: Here, customers
demand for products of specific description
through mail and are delivered the products
at their places.
Cyber Marketing or Electronic Shopping:
It is also known as online or Internet

 Telemarketing: Order for the product is placed

by phone and/or cell phone. Television shopping
is also a type of telemarketing. Products are
displayed and demonstrated on television. Full
description of products is shown on TV and
phone numbers are provided for each city to
place order.
Automated Vending: Customer can access
the products round the clock. It is suitable for
soft drinks, ice-cream, coffee, candy, cigarette,
newspapers, etc. It is not very famous in India.
Tea and coffee is offered by this mode at the
airport in India. ATM (the automated teller
machine) by banks is popular example of this
type of retailing.

THE RANGE OF DIRECT MARKETING

TECHNIQUES

ADVANTAGES OF NON STORE

RETAILING
Its freedom from a physical retail presence.
The high fixed costs of operating retail outlets
are eliminated.
The breadth of customer coverage is
considerably wider than is possible with an
individual retail location.
Companies do not have to spend large sums or
dilute stock building new locations, or acquiring
them.
This truly gives the non-store retailer a global
market from a cheap, centralized location.

DISADVANTAGES OF NON STORE

RETAILING.
There is also the fear of credit card
abuse and mail fraud, both related to
the sense of detachment that not
holding a prospective purchase
brings.
And since most of us do not have the
luxury of a pricey T1 Internet
connection, we must still deal with
painfully slow connections.

The Impact Of IT In The

Retail Sector

With the increasing globalization of retailing, both

in terms of their points-of-sale and their points-ofsupply; the information technology (IT) spend in
the retail sector has increased significantly.
IT plays an increasingly important role in the
management of complex retail operations.
Market knowledge, as well as control of data and
information, is key to obtaining a competitive
advantage in the retail sector.
Markets are continuing to grow and become more
complex; the simple process of retailing has
started to deploy more advanced retail
information systems to cope with all the

Retailers need to transform their IT

capabilities for multiple reasons, including
To increase the companys ability
to respond to the evolving
marketplace through enhanced
speed and flexibility.
To collect and analyze customer
data while enhancing
differentiation.
To work effectively; retailers need
one system working across stores
(or even across national borders)

The retail industry faces many specific

challenges related to IT management,
including:
Customer data: Many retailers struggle with
information overload because theyre required to
collect and sift through mass amounts of data, then
convert it into useful information in a customercentric industry.
Transparency and tracking: Retailers must
increase transparency between systems, as well as
obtain better tracking to integrate systems from
manufacturer through to the consumer while
obtaining customer and sales information.
Global data synchronization: Due to radio
frequency identification/electronic product coding,
the entire supply chain has become more intelligent.
Retailers must enable the use of real-time data to

 PCI Security Compliance: PCI Security

Compliance addresses the retailers internal
security setup and practices, in order to mitigate
payment security risks. Every business engaged
in credit card payment processing is required to
comply with PCI Security Standards. If a retailer
collects or stores credit card information that
becomes compromised, the retailer may lose the
ability to accept credit card payments. Other
possible consequences include lawsuits, insurance
claims, cancelled accounts, and government fines.
Note: PCI Payment Card Industry

IT Implemented in Retail
stores
EDI
Bar Coding
Electronic article
surveillance
Electronic shelf
labels
Customer database
management
system

Legal aspects in retailing

People perspective
Employees State Insurance Act
Payment of Bonus Act
Payment of Gratuity Act
Employees Provident Fund
The Minimum Wages Act
The Workmen Compensation Act
The Payment of Wages Act

Legal aspects in retailing

Operations perspective
The shops & establishment Act
The prevention of Food & Adulteration
License
Industrial Disputes Act
Consumer Protection Act
Essential Commodities Act
The standards of Weights &
Measurement Act

Legal Issue

A person who is responsible for the

operation of a single retail store or a
multiple number of retail stores has to be
aware of various laws and regulation.

Consumer
Protection
Act,1946

Industrial
Establishment
Act,1946

Legal
Issues in
Retailing
Industrial
Disputes
Act,1947

Prevention
of Food
Adulteration

Shops And
Establishment
Act

Consumer Protection Act,1946

Name and Address of Manufacturer
Net quantity of the package (NOT GROSS OR WEIGHT
WHEN PACKED)
If sold by number contained in the package should be
displayed on it
MONTH and YEAR of manufacture, the number contained
in the package should be displayed on it.
In case of food items , BEST BEFORE or EXPIRY
DATE
MRP inclusive of taxes

Prevention of Food Adulteration

License issued by REGIONAL FOOD &
DRUGS ADMINISTRATION DEPARTMENT,
HEALTH OFFICER
Validity period of 5 years
PFA license has to be obtained for each store
and separate licenses have to be obtained sale
like that, milk &milk product, baked item,
eggs, frozen food, beverages, fast food

Shops and Establishment Act

Objective: provide statutory obligation and

rights to employees and employers in the
unorganized sector of employment

License issued by LOCAL MUNCIPAL

CORPORATION, and the application can be
made only after the operation of the shop
commerce

It requires the maintenance of registers and

records and display of notices

Industrial Disputes Act,1947

It defines industry, industrial dispute, layoff,
lockout, retrenchment, trade union, strike
wages, workman, etc.
Under this Act:
The notices of changes in employment condition
The strike and lock-out procedures
The proceedings for retrenchment
The retrenchment compensation
The lay - off compensation
The unfair labor practice
The closure procedures
The rights of appeal
The penalties

Industrial Establishment Act,1946

Objective: Regulate the conditions of
recruitment, discharge, disciplinary action,
holidays, etc.
Under this Act is applicable to industrial
establishments where in 50 or more workmen are
or have been employed in the preceding 12
month
Central and state government can make this Act
applicable to less than 50 person, as in the case
of UP and WEST BANGAL