emerging technologies in direct-to-customer...
TRANSCRIPT
Emerging Technologies in Direct -to-Customer Marketing Model
with reference to Retailing in India
Ritu Sinha
Ph.D Scholar (Management)
(2014-2017)
Kalinga University, Raipur, C.G.
Enrol lment No. 15086416 (KU002MMXIV02010594)
Abstract
Retailing growth has demanded IT deployment to broaden its arena and
overcome challenges namely Business Opt imizat ion, increasing SCM
efficiency, innovat ing shopping exper ience and other manual limitat ions.
Techno logy proves beneficial in creat ing and mainta ining customer
relat ionships. Analys is o f data co llected at the retail po int of sales helps
understand preferences, buying habit s, spending budgets, family needs o f an
individual customer. Relat ionships are maintained by ut iliz ing IT for
per iodica l e-mailing, SMS, greet ings, promotional let ters and persona l
calling. Informat ion techno logy is the backbone o f modern retailing. The
t radit ional retailing was easier to manage because o f its size, scope and
uncompet it ive nature; and usually t he shops were managed by the owner -
manager. But the modern retail format s, which are superstores and large
chains owned by large organizat ions, are difficult to manage without an
efficient and reliable IT system in place. This study is aimed to analyse
var ious techno logical too ls that are being used for the purpose.
1. Introduction
Retailing is t he most act ive and at t ract ive sector of last decade. While the
retailing industry itself has been present since ages in our country, it is only
the recent past that it has witnessed so much dynamism. T he emergence o f
retailing in India has more to do with the increased purchasing power o f
buyers, especia lly post -liberalizat ion, increase in product var iety, and
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
175
increase in economies o f scale, with the aid o f modern supply and
dist r ibut ions so lut ion.
Indian retailing today is at an int erest ing crossroads. The retail sales are at
the highest po int in history and new techno logies are improving retail
product ivity. Though there are many opportunit ies to start a new retail
business, retailers are facing numero us challenges.
With t ime the Indian markets are becoming inundated with numerous
dispersed firms, companies that demands to lead with an extra mile to gain a
compet it ive edge over their compet itors for whom Informat ion Techno logy
has become a cr it ical medium.
Retail companies are facing a number of challenges due to increasing
complexit y o f supply chains caused mainly by o ff -shor ing o f manufactur ing.
Increased lead t imes, demand var iabilit y and supply disrupt ions are forcing
companies to pile inventories t hus leading to opportunity lo sses and higher
cash conversion cycles. Demand forecast ing has assumed cr it ical significance
in managing supply chains efficient ly. Having an agile supply chain network
that seamlessly connects demand, supply and product remain s the top prior it y
for retailer and consumer companies.
Dig ital Market ing in Retailing investment may comprise o f implement ing
ERP packages, forecast ing tools, and others. The leading manufacturer -
retailer Madura Garments in one o f the interact ions, aft er the implementat ion
of the SAP ERP package, company could easily measure the success o f t he
implementat ion by certain related indicators.
2. Objectives and Research Methodology
Objectives of the study are as given below:
1. To analyse the retail market in Ind ia.
2. To find out the major techno logical tools emerging in Retail Out lets.
Research Methodology
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
176
Research methods can be classified in different ways, the most commo n
dist inct ion is between the quant itat ive and the qualitat ive approaches (Myers,
20071). Quant itat ive approaches were or iginally used while studying natura l
sciences like: laboratory exper iment s, survey methods and numerica l
methods. A qualitat ive study is used when the researcher wants to get a
deeper understanding on a specific topic or situat io n. Myers (2007)2 stated
that the qualitat ive approach was developed in social sciences in order to
support the researcher in studies including cultural and social phenomena.
Sources included in the qualitat ive approach are interviews, quest ionnaires,
observat ions, documents and the researcher’s impression and react ions. The
chosen approach is qualitat ive.
This study typically takes the form study o f secondary data ava ilable on
Indian Retail system. To understand and conc lude the major techno logica l
tools contr ibut ing towards the growth of Indian retail industry, we have not
only gone through a number o f reports and papers but also visit ed and survey
select organised retail out lets in Delhi / NCR. This has the advantages o f
providing very r ich informat ion and avo iding the influence o f others on the
opinion o f any one individual.
3. Emerging Technological Tools in Retail
Retailing growth has demanded IT deployment to broaden its arena and
overcome challenges namely Business Opt imizat ion, increasing SCM
efficiency, innovat ing shopping exper ience and other manual limitat ions.
Indian retailing today is at an int erest ing crossroads. The retail sales are at
the highest po int in history and new techno logies are improving retail
product ivity. Some o f the major techno logical tools are given as below:
3.1 Business Intelligence tools
These comprises tools namely Data warehousing, data mining, Online
Analyt ical Processing (OLAP) facilitat ing a wea lth o f informat ion in terms o f
sales and behavioural analys is to retailers. Business Intelligence too ls are
1 Myers, M. D. (2007), ―Qualitative Research in Information Systems‖, MIS Quarterly, vol. 21 No. 2,
pp.241-242. 2 Ibid
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
177
ident ified to be very versat ile that analyze sales data from the POS,
determines t rend o f sales for the categories and sub -categor ies o f merchandise
so ld from disperse stores that enable the retailers to understand the frequ ency
of sale, geographica l spread o f sa les, types o f so ld merchandise and thus
provide 'what if' analys is specially for projected sales and pr ice changes .
This would lead to increase in sales.
3.2 RFID
Current ly RFID is profit ably being used in retail fir ms o f developed countr ies
pr imar ily in two sect ions namely in supply chain, warehouses and Retail
front . It ensures individual art icles tagged by RFID enable quick billing and
to ensure automated stock keeping.
3.3 B2B Software
B2B so ftware is well suit ed for mult i-channel retail business conso lidat ing
sales via Internet , mail catalog, phone/fax and po int -of-sale (POS) terminals
installed in physical shops. The concept with mult i-channel business is not
new. However, t he latest techno logical vehicles like Web/Internet , created a
new possibilit ies for retailers indeed.
3.4 Business Optimization Software
Product pr icing so ftware: Significant prospects o f pro fitabilit y can be
achieved with the advent of sophist icated pr ice opt imizat ion / revenue
management techniques o ffer. Current ly two US-based so ftware product
vendors Demand Tech and Khimetr ics have come up with products to
opt imize the pr ices o f individual products. India will int roduce such products
in t he coming years as retailers have started understand ing the features o f the
products and their deployment in pr icing decis ion -making.
3.5 Merchandise Optimization Software
Merchandise planning is one o f the biggest challenges that any mult i store
retailer faces. Get t ing the r ight mix of product , which is store specific across
your organizat ion, is a combinat ion o f customer ins ight , allocat ion, and
assortment techniques.
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
178
3.6 Mobile computing
Mobile comput ing has facilitated employees in t racking the inventory and
provided customers an innovat ive shopping e xper ience through integrat ion o f
PDAs in individual shopping carts that would provide informat ion on the
products. This use has opt imized inefficiencies in inventory and supply chain
sect ions and lead to cost minimizat ion. A similar WAP (Wireless Applicat i on
Protocol)-enabled mobile phones are catching at tent ion.
3.7 Customer Relationship Management
Customer relat ionship management (CRM) is about ident ifying a company’s
best customers and maximiz ing the value from them by sat isfying and
retaining them. As a business philosophy CRM is seen to be firmly rooted in
the concept of relat ionship market ing, which is aimed at improving long -run
profitabilit y by shift ing from transact ion based market ing to customer
retent ion through effect ive management of customer re lat ionships.
3.8 Data Mining3
Today retailer is facing dynamic and compet it ive environment , with increase
in globalizat ion and compet it iveness retailers are seeking bet ter market
campaign . Retailer are co llect ing large amount o f customer daily t ransact ion
details. This data co llected requires proper mechanisms to convert it into
knowledge, using this knowledge retailer can make bet ter business decis ion.
Retail industry is looking st rategy where in they can target right customers
who may be pro fitable to them.
3.9 Digital Promotions
Several examples of innovat ive approaches and modern techno logy
applicat ions have been ment ioned in the preceding sect ions, such as
employing data analyt ics to extract fresh customer ins ights; the use o f social
media p lat forms to accost customers and spread the word about companies’
init iat ives and products; the relevance of mobile dig ital devices in providing
prompt in-store shopping opt ions and reaching customers with market ing
3 Bharati M Ramagiri and Dr B L Desai (2013), ―Role Of Data Mining In Retail Sector‖,
International Journal on Computer Science and Engineering, Vol.5 No.1, pp. 47-50.
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
179
communicat ion on-the-go; t he innovat ive ut ilizat ion o f RFID tags, int er ior
digit al walls and mult i-touch screens, self -service kiosks and mobile po ints o f
sale to enhance the store exper ience in connect ion to the on - line wor ld and to
let customers, if they wish it , serve themselves.
3.10 Location-based Applications and Mobile Promotions
Customers make purchase decis ions out of stores, e.g. by reviewing the
retailer ’s websit e and checking this week’s o ffers, by read ing user and expert
reviews on- line or by consult ing their fr iends about recent purchases they
have made either on- line or in a br icks-and-mortar store. Customers also
decide what to buy when they are already in the store. Irrespect ive o f where a
final purchase decis ion is made, retailers are constant ly looking for creat ive
ways to influence customers’ decision-making process along the ent ire
shopping cycle, i.e. from the po int o f raising awareness to the po int o f
receiving payment .
3.11 Mobile Point of Sale
Sophist icated applicat ions for smart phones and other mobile devices for m
one area of opportunit ies for retailers to inst itute, nurture, and sustain long -
term relat ionships with their customers. Mobile po int o f sale (POS), however,
opens also other opportunit ies for creat ing customer va lue (Aruba, 2012).
Mobile POS is, in simple terms, a mobile checkout , an extension to
t radit ional fixed POS that has been around for decades and that customers are
more than familiar with (NCR, 2011; Rudolph et al. , 2012).
3.12 Mobile Payments and Digital Wallets
There could be no discussion about the success, ad opt ion, and increasing use
of mobile dig ital devices, especia lly smart phones, by consumers for m-
commerce other related payment purposes (O'reill et al. ,2012). Mobile
payments have become a favour ite means of paying for all kinds of services,
such as t ravel t icket ing ( from bus to flight t ickets), product purchase and, but
not limit ed to , fina lizing payments in phys ical stores using smart phone
―wallet‖ or other payment applicat ions (Lukies, 2011).
3.13 Personal Shopping Assistants
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
180
As discussed in the examp le o f mobile point -of-sale, providing high qualit y
personalized customer service on the shop floor is a challenge if the store
assistants spend more t ime manning the cash reg ister rather than wit h
customers. Personal shopping ass istants could alleviate the issue o f receiving
qualit y service ins ide the store at the moment when the customer requires it .
Personal shopping assistants are touch screens with built - in wireless
connect ivity to ensure mobilit y and they remind o f tablets both in shape and
funct ionalit y.
4. Conclusion
Informat ion techno logy is the backbone of modern retailing. The t radit ional
retailing was easier to manage because of it s size, scope and uncompet it ive
nature; and usually the shops were managed by the owner -manager. But the
modern retail formats, which are superstores and large chains owned by large
organizat ions, are difficult to manage without an effic ient and reliable IT
system in place.
With the r ise o f mobile, social and cloud techno logies, customer expectat ions
cont inue to increase. More than ever, customers demand a more seamless
exper ience. For many businesses, customer exper ience is the new
bat t lefield—a compet it ive advantage that at t racts and keeps customers. This
paper has invest igated into var ious technologies and their ut i lit ies.
5. References
1. "Bankruptcy code biggest economic reform after GST: Finance
Minist ry". Accessed 2016-05-11.
2. "Economic and financ ial indicators" 3 July 2008.
3. Alan Bryman, Emma Bell (2008), ―Business Research Methods‖,
Chapter 11, p. 281, Oxford Universit y Press, New Delhi.
4. Anurag Sharma, Vishal Bishno i, ―Economic Feasibilit y o f
implement ing eCRM System: A study o f select Retail Out lets in NCR‖,
Lambert Academic Publicat ion, ISBN:9783659444500, pp 57 -76.
5. Aprameya Rao and Kishor Kadam, ―25 years o f liberalizat ion: A
glimpse o f India’s growth in 14 charts‖,
ht tp://www.firstpost .com/business , accessed on Jul 17, 2016.
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
181
6. Arjun Mit tal (2013), ―E-commerce: It ’s Impact on consumer Behavior‖,
Global Journal o f Management and Business Studies, Vol.3 No.2, pp.
131-138.
7. Bahree, Megha (25 November 2011). "India Unlocks Door for Global
Retailers". The Wall Street Journal.
8. Chaffey, Dave ―E - business and E- commerce Management , Pearson
Educat ion, 2007
9. Donald R Cooper, Pamela S Schindler (2008), Business Research
Methods, 9t h
ed. , Tata McGraw Hill, New Delhi, pp. 97.
10. Donald R Cooper, Pamela S Schindler (2008), Business Resea rch
Methods, 9t h
ed. , Tata McGraw Hill, New Delhi. pp.413.
11. Fill C, Market ing Communicat ions, Contexts, Strategies and
Applicat ions, Prent ice Hall, 2002
12. Visha l Bishno i (2009), ―Effect of Organised Retail on Un -Organised
retail with Reference to Indian Sce nar io‖, 4t h
nat ional conference on
―Innovat ion and Adaptabilit y : Twin Engins o f sustained Growth‖ at –
28-29t h
March 2009. published in Conference Proceedings Book by
Excel Publicat ion, New delhi, ISBN# 978 -81-7446-833-8, pp. 318-324.
13. Wayland, Robert E., Paul M. Co le. Customer Connect ions Harward
Business Review Press, 1997
14. Zeithaml V. and Jo Bitner, M., Service Market ing, Integrat ing
Customer Focus across the films, New Delhi, Tata McGraw Hills, 2003
International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017), © Research India Publications http://www.ripublication.com
182