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Chapter 88Information Gathering and Processing

in Retailing

RETAIL

MANAGEMENT:

A STRATEGIC

APPROACH, 9th Edition

  ERMAN

ERMAN

  EVANS

 EVANS

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 8-2

Chapter Objectives

To discuss how information flows in a

retail distribution channel

To show why retailers should avoidstrategies based on inadequate

information

To look at the retail information system

its components and recent advancesTo describe the marketing research

process

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 8-!

"igure 8#$ %ow &nformation "lows

in a 'etail (istribution Channel

Information

and the

Supplier 

Information

and the

Retailer 

Information

and the

Consumer 

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 8-)

*uppliers +eed To ,now

"rom the 'etailer 

stimates of

category sales

&nventory turnover

rates

"eedback on

competitors .evel of customer

returns

"rom the Customer 

/ttitudes toward

styles and models

0tent of brand

loyalty

1illingness to pay a

premium for superiorquality

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 8-

'etailers +eed To ,now

"rom the *upplier 

/dvance notice of

new models and

model changes

Training materials

*ales forecasts

3ustifications forprice changes

"rom the Customer 

1hy people shop

there

1hat they like and

dislike

1here else people

shop

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 8-4

Consumers +eed To ,now

"rom the *upplier 

/ssembly and

operating

instructions

0tent of warranty

coverage

1here to send acomplaint

"rom the 'etailer 

1here specific

merchandise is

stocked in the store

5ethods of payment

acceptable

'ain check and otherpolicies

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 8-6

'etail &nformation *ystem 7'&*

/nticipates the information needs of

retail managers

Collects organi9es and stores relevantdata on a continuous basis

(irects the flow of information to the

proper decision makers

http://www.walmartstores.com/

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 8-8

"igure 8#2 / 'etail &nformation

*ystem

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 8-:

"igure 8#! 'etail ;ro 5anagement

&nformation *oftware

http://www.retailpro.com/

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 8-$<

(atabase 5anagement

 A major element in an RIS

System gathers, integrates, applies, and

stores information in related subject areasUsed for 

 – "requent shopper programs

 – Customer analysis

 – ;romotion evaluation

 – &nventory planning

 – Trading area analysis

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 8-$$

"ive *teps to /pproaching

(atabase 5anagement ;lan the particular database and its

components and determine information needs

/cquire the necessary information

'etain the information in a usable and

accessible format

=pdate the database regularly to reflect

changing demographics recent purchases

etc#

/naly9e the database to determine strengths

and weaknesses

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 8-$2

"igure 8#) 'etail (atabase

5anagement in /ction

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 8-$!

"igure 8# (ata 1arehousing

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 8-$)

Components of a (ata

1arehousePhysical storage location for data – the

warehouse

Software to copy original databases andtransfer them to warehouse

Interactie software to allow processing of

in!uiries

 A directory for the categories of information

"ept in the warehouse

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 8-$

(ata 5ining and 5icromarketing

Data mining  is the in#depth analysis of

information to gain specific insights about

customers, product categories, endors, andso forth

Micromarketing  is an application of data

mining, whereby retailers use differentiated

mar"eting and deelop focused retailstrategy mi$es for specific customer

segments

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 8-$4

"igure 8#4 /pplying =;C Technology

to >ain ?etter &nformation

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 8-$6

"igure 8#6 The 5arketing

'esearch ;rocess

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 8-$8

Marketing

Researchin

Retailing 

The collection and

analysis of

information relating to

specific issues or

problems facing a

retailer 

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 8-$:

*econdary (ata

/dvantages

&ne0pensive

"ast*everal sources

and perspectives

>enerally credible

;rovidesbackground

information

(isadvantages

5ay not suit current

study

5ay be incomplete

5ay be dated

5ay not be accurate

or credible5ay suffer from poor

data collection

techniques

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 8-2<

*econdary (ata *ources

&nternal

*ales reports

?illing reports &nventory records

;erformance reports

0ternal

(atabases

 – /?&@&nform ?usiness;eriodicals &nde0etc#

>overnment

 – =#*# Census of 'etail

Trade – *tatistical /bstract of

the =#*#

 – ;ublic records

http://www.prenhall.com/bermanevans/chapter8

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 8-2$

"igure 8#8 &nternal *econdary

(ata

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 8-22

;rimary (ata

/dvantages

Collected for

specific purpose

Current

'elevant

,nown and

controlled source

(isadvantages

5ay be more

e0pensive

Tends to be more

time consuming

&nformation may not

be acquirable

.imited perspectives

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 8-2!

;rimary (ecisions

% &n-house or outsourceA

% *ampling methodA –

;robability – +onprobability

% (ata collection methodA – *urvey

 – Observation – 0periment

 – *imulation

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 8-2)

*urvey 5ethods

&n-person

Over the telephone

?y mailOnline

(isguised

+on-disguised

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 8-2

"igure 8#: / *emantic (ifferential

for Two "urniture *tores

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 8-24

5ystery *hoppers

'etailers hire people to pose as

customers and observe operations

from sales presentations to howwell displays are maintained to

service calls

http://www.michelson.com/mystery

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 8-26

"igure 8#$< Bisionary *hopper 

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8-28

"igure 8#$