BBA AIRLINES AND AIRPORT MANAGEMENT - II YEAR/4th SEMESTER

RETAIL MANAGEMENT

Unit – 1
Retailing: Meaning, Nature, Classification – Importance – Factors Influencing Retailing –
Functions of Retailing – Retail as a career – Trends in Retailing - U.S. retailers and foreign
markets – Foreign retailers and U.S. markets - Electronic Data Interchange, Database
Management, Data warehousing
Meaning Nature and Classification :

The word 'Retail' is derived from a French word with the prefix re and the verb tailer meaning
"to cut again". Evidently, retail trade is one that cuts off smaller portions from large lumps of
goods. It is a process through which goods are transported to final consumers. In other words,
retailing consists of the activities involved in selling directly to the ultimate consumer for
personal, non-business use. It embraces the direct-to-customer sales activities of the producer,
whether through his own stores by house-to-house canvassing or by mail-order business.

Manufacturers engage in retailing when they make direct-to-consumer sales of their products
through their own stores (as Bata and Carona shoe companies, D.C.M. Stores, Mafatlals and
Bombay Dyeing) by door-to-door canvass, or mail order or even on telephone. Even a
wholesaler engages in retailing when sells directly to an ultimate consumer, although his main
business may still be wholesaling. A retailer is a merchant or occasionally an agent or a business
enterprise, whose main business is selling directly to ultimate consumers for non-business use.
He performs many marketing activities such as buying, selling, grading, risk-trading, and
developing information about cusotmer's wants.

A retailer may sell infrequently to industrial users, but these are wholesale transactions, not retail
sales. If over one half of the amount of volume of business comes from sales to ultimate
consumers, i.e. sales at retail, he is classified as a retailer. Retailing occurs in all marketing
channels for consumer products.
Retail is defined as “Any business that directs its marketing efforts towards satisfying the
final consumer based upon, the organisation of selling goods and services as a means of
distribution.” It is essentially the marketing concept of a customer-centred, company-wide
approach to developing and implementing a strategy. It provides the guidelines, which must be
followed by all retailers irrespective of their size, channel design, and medium of selling.

The retail concept covers four broad areas and is an essential part of the retailing strategy:

(I) Customer Orientation – The retailer makes a careful study of the needs of the customer
and attempts to satisfy those needs.

(ii) Goal Orientation – The retailer has clear cut goals and devises strategies to achieve
those goals.

(iii) Value Driven Approach – The retailer offers good value to the consumer with
merchandise having the price and quality appropriate for the target market.

(iv) Coordinated Effort – Every activity of the firm is aligned to the goal and is designed to
maximize its efficiency and deliver value to the consumer.

Major Types of Retail Stores:

Instore-Retaling :

1. Department Stores
2. Super Markets
3. Discount Houses
4. Chain Stores or
5. Multiple Shops

Non-Store Retailing:

1. Direct Selling

2. Telemarketing
3. Online Retailing

4. Automatic vending

5. Direct Marketing.

Franchising:

Importance of Retailing:

The retailer is an intermediary in the marketing channel because he is both marketer and
customer, who sells to the last man to consume. He is a specialist who maintains contact with the
consumer and the producer; and is an important connecting link in a complex mechanism of
marketing. Though producers may sell directly to consumers, such method of distributing goods
to ultimate users is inconvenient, expensive and time consuming as compared to the job
performed by a specialist in the line. Therefore, frequently the manufacturers depend on the
retailers to sell their products to the ultimate consumers. The retailer, who is able to provide
appropriate amenities without an excessive advance in prices of goods is rewarded by larger or
more loyal patronage.

Factors Influencing Retail:

Factor # 1. Customers:

Customers are the most important element for the retailers. To be successful retailer must
know its customers. Why customers shop, how they select a shop and how they select
among that stores merchandise.

These can be:

Convenience- of hours, of location, of shopping ease-

(i) Assortment of merchandise- whether a wide variety or limited

(ii) Quality and fashion level of goods

(iii) Price- Generally important at the lower end

(iv) Services- such as credit, delivery, courteous sales staff, assistance in selection, after
sales services, return-goods privileges.

(v) Excitement- Such as promotional efforts.

If retailer really understands their customers, they can position themselves and plan their
merchandise and services accordingly. To a large extent the various combinations of
merchandise and services are controllable by the retailer.

Stores can stay open in the evenings and on Sundays; retailer can decide to stock low-priced
or expensive goods, to offer many services or bare minimum; to have frequent sales, style,
shows and other excitement-creating events or none.

Factor # 2. Competition:

A retailer’s competition does not only come from those competitors who are using the same
retail format but also from new competitors who are coming up from new formats.

The competition between retailers using the same type of retail format is known as intra-
type competition. Examples of this type of competition are- A department store competing
with other department stores; a discount store competing with other discount stores; a
supermarket competing with other supermarkets; etc.

Competition between retailers that have similar merchandise but are using different formats
is known as inter-type competition. For example- competition between department and
discount stores.

To provide one stop shopping and to attract a broader group of consumers, retailers offer a
broader variety of merchandise, some of it typically not associated with the store type. This
is called scrambled merchandising. For example- grocery shops keeping clothes, sports
goods in a drug store, etc.

Increased inter-type competition and scrambled merchandising has made it harder to

identify and monitor competition for retailers. In a way all retailers are competing against
each other for the money spent by the consumer on goods and services. However, the
intensity of competition is greatest among retailers when customer view them having the
similar retail mix.

The competition to the retailers may come from same retailer located within the vicinity of
the target market or a similar kind of business in that locality. For example- a retailer
located in a suburb selling video and music cassettes would have competition with the cable
TV and the movie theatre located in that suburban area.

The retailer may also face tough competition from the scrambled stores, which in addition to
their merchandising products also provide videocassettes on rent. Therefore the retailer has
to identify, assess the strengths and weaknesses of his /her competitor while designing the
strategy for marketing its products.

Factor # 3. Environmental Trends:

This is the third core element of retailing. The environmental factors surrounding the
customers and the competition is a major factor confronting retailers.

These environmental factors are:

a. Changing customer’s needs,

b. Changes in demographic composition of customers,

c. Changes in technology,

d. Changes in business environment,

e. Legal framework.

i. Economic Factors:

The rate of growth in India has gradually picked up in last two decades. In the eighties it
breached the so called ‘Hindu rate of growth’ and reached 5 percent levels. Throughout the
nineties the growth has remained above this level even crossing 7 percent levels. This has
resulted in increased buying power and disposable income in the hands of Indian consumers.

Apart from growth, India’s large middle class has led to introduction of organized retail
formats. You can see many types of retail formats in India now, for example, department
stores, specialty stores, manufacturer-owned retail chains etc.

As Indian economy gets integrated in the world economy, global trends start affecting
Indian economy such as global recession. This gets reflected in consumers buying patterns.
Last year (2001) saw drop in sales of leading retailers in India due to the economic
slowdown.

ii. Demographic Factors:

There has been significant growth in number of towns and significant increase in population
of urban India due to migration from rural areas. Rising prosperity and population has
driven the population of many cities over 10 lakhs. This has created interest in large
retailers. Many retailers have opened their stores in number of cities now. Prominent among
them are Shoppers Stop, Food World, Westside, Ebony Piramyd, Pantaloon, Lifestyle,
Globus etc.
iii. Social Factors:

Nuclear small family is becoming a norm in India with increasing number of women
working outside the four walls of home. Thus, there is increase in disposable income of
families, however there is paucity of time as in many families both (husband and wife)
work.

iv. Psychological Factors:

Consumerism is on increase in India. Media and cable TV proliferation has given exposure
to Indian consumers to new ideas, new life style and new desires. This has fuelled consumer
demand. Even in last four years when the economy was not doing as well, consumer
durables sales was growing at about 20%.

Similarly, there is increased emphasis on health, personal hygiene, etc. Therefore, many
retailers carry low sodium salt, cholesterol free oil, diet coke etc.

v. Brand Profusion:

Compared to early eighties, India has seen brand explosion in almost all goods. Earlier there
was only one brand of salt, namely, Tata Salt, now there are number of brands available.
Many goods were sold in loose earlier, now there exists number of established brands,
Numerous brands in consumer durables, automobiles, household items, garments etc, have
appeared in the Indian retail horizon.

vi. Psychographic Change:

There has been a perceptible change in the mental attitude of the people at large. People
specially in cities have become health conscious. Hygiene is a prerequisite for any
investment related to consumption and food items. Due to change in earning, the concept of
marketing has also changed.

vii. Demographic Change:

The people at large live in big apartments and isolated suburban areas. There is a growth of
clusters of population in identified geographical locations. A particular geographic location
is populated by people with distinct characteristics of demand and consumption. This
indicate that the requirement of different clusters may be different depending upon the type
of families living together.

viii. Political Change:

Since last two decades, India is facing severe political instability. This is causing frequent
policy changes and creation of pressure groups.
ix. Technological Changes:

Last decade saw tremendous change in technology specially information technology.

Information Technology has provided ways to network and increase market share with
profitability. There is a possibility of mutual growth and business with collaborations.

Functions of Retail Management:

Retail management refers to successfully running and managing the internal functions of a retail
store. It comes from extensive planning and having an understanding of the target demographic.
Retail management teaches about inventory management and supply management, where it conveys
various techniques to optimize the entire retailing operations. It is important to understand the needs
of any staff employed as these individuals will be at the forefront of the business and represent your
brand on a daily basis. If done successfully managing a retail store is a combined process of gaining
the most suitable funding, communication, marketing, branding, and ensuring you have the most
suitable employees to reflect your vision.

Retail management helps in saving time and ensures customer availability to locate effective
management. They must keep a record of the entire buying and selling of products such as tracking
cash flow and daily sales reports. It helps in maintaining the product’s image and ensures the
availability of goods. The functions of a retailer in retail management are –

 Acting as agent
Retail management always acts as an agent between consumers and sellers by anticipating the
requirements of the buyer at reasonable prices. They make sure to convince consumers to buy
products as per their desire.

 Marketing functions
Retail management itself is a marketing function that performs advertising, sales promotion, and
public relations for the purpose of selling products. It helps in increasing awareness about the goods
of reputed companies.

 Connecting link
Retail management helps in establishing a connecting link between buyers and sellers. It can be done
by ultimate customer satisfaction through sales promotions.

 Providing information to wholesalers and customers

Retailers act as a middleman between manufacturers/wholesalers and customers. It is easy to provide
information directly to the final consumer. It increases demand among consumers through direct
contact.

 The function of breaking bulk

Retail management is done on large units that are converted into smaller units. It can be such as
bottles, packets, and individual canes for customer requirement purposes. It creates place utility in
breaking bulk to the good point of the consumption process.

 Stocking of goods
Stocking of goods in retail management is done by buying various goods units from wholesalers and
manufacturers. It provides a wide variety of choices when it comes to preference for customer
satisfaction.

Retail as career :

‘Retail’, India’s largest industry, accounts for over 10 per cent of the country’s GDP and eight
per cent of the employment. It has emerged as one of the most dynamic and fast paced industries
with several players entering the market. The Indian retail market is expected to grow from
around $ 300 billion to $ 400 billion at the rate of seven to eight per cent per year by 2010.
Driven by changing lifestyles, strong income growth, western influence and favorable change in
demographic patterns, Indian retail is expanding at a rapid pace. Organised retailing will
significantly meet India’s struggle for providing jobs to its growing youth. Retail companies are
on a hiring spree and there are multiple options for those who want to be employed in the retail
sector. Rapid growth of organised retail in metros, smaller cities and towns has made the need
for talented people increased in various areas such as merchandise planning, logistics,
management of supply chain, information and stores. Retailing in the organised sector is likely to
be the next biggest employment vehicle after BPO. Modern retail expects to create up to two
million direct jobs in the next two years. Any development in retail leads to creating job
opportunities.

Retail market essentially comprises:

 Shopping centres: There is an increase in the number of shopping centers both in tier-I
and tier-II cities. The country can expect to have 600 new shopping malls by 2010.
 Food retail: Food forms a major chunk of the shopping basket of any Indian customer.
Some of the major players in this segment are RPG Spencer’s Daily, Bangalore-based
Nilgiris, Reliance Fresh, Tata Innovative Foods and Food Bazaar.
 Kids’ retail: Kids’ retail is growing and expanding. This segment encompasses apparels,
toys, games, entertainment theme parks and many more. More and more international
brands, especially in apparels, is investing in India.
 Books & Music retail: New outlets of companies like Crossword, Landmark, Odyssey
and Oxford are springing up everywhere. Apparel chains are tying up with bookshops,
music stores and cafeteria so as to attract the not-so-apparel shopping enthusiasts.
 Mobile market: The retail market for mobile phones - handset, accessories and airtime -
is growing at the rate of 15-20 per cent. Companies like Spice, Essar and Airtel are
employing innovative plans to attract customers.
 Luxury goods market: There is a rise in demand for products of brands like Versace,
Dolce & Gabbana, Swarovski and Escada.
 Agriculture & Floriculture: Food retailers are tying up with thousands of farmers for their
supply of fruits, vegetables and flowers.
 Electronics goods market – There is a huge increase in demand for electronic goods
ranging from iPods, games, plasmas, palm tops, audio video products, home appliances
and other electronic gadgets across all the sections of customers.

Common job profiles in retail market

1. Sales: Every retail unit depends on its sales force for its business. A job in sales is an entry
point into retail for a fresher. Stamina, good communication skill, confidence and a positive
attitude are extremely important qualities. Having good product knowledge and ability to
convince and win customers are a must. Any individual with such skills would qualify.

2. Store Manager: With the number of new stores springing up, there is a rise in the demand for
store managers. A store manager supervises the day-to-day operations of a store, manages the
staff and he or she is responsible for maximising sales and improving overall profits. Achieving
performance objectives will require high competence in one of the main areas of retail activity:
store operations, human resources, finance, buying, customer care, marketing, logistics,
information technology, and administration. Graduates with three to four years’ experience in
managing units fit in well.

3. Buyer: A buyer identifies and buys goods for the store, keeping in mind customers’ needs and
profit of the business. A buyer should be able to anticipate correctly customers’ buying patterns
and plan inventory accordingly. Good planning skills, an analytical mind and familiarity with the
merchandise are required qualities.

4. Retail merchandiser: Merchandisers are responsible for ensuring that products appear in the
right store at the right time, in the right quantities and within a specific budget set by the
merchandiser himself. This involves working closely with the buying teams to accurately
forecast trends, plan stock levels and monitor performance. Good analytical and number skills
coupled with good inter-personal skills are important. A post-graduate with experience in retail
makes a preferred qualification.

5. Visual merchandiser: A visual merchandiser creates window and interior displays in shops
and department stores. Main objective of this role is to maximise sales in every season by
creating the face of the store to attract maximum customers. A course in designing and a creative
mind are the requisites for visual merchandising jobs.

6. Product development: Many retailers do require product developers who can create
merchandise. A product developer should be able to visualise and create merchandise, work
closely with designers and develop an end product from a concept or a sketch. The role requires
a creative mind, a knack for developing marketing plans, ability to plan assortments, an eye for
quality and an understanding of the finances involved. Besides these, there are other attractive
job options in areas like ware-house management, HR, finance, customer service, operations
management, logistics and other support functions. Salaries for freshers could vary anywhere
between Rs 7,000 to 20,000 per month. For candidates with the experience of one to four years,
the salary range is between three to four lakh while for those with 10 - 15 years’ experience, the
range could be Rs. 8-10 lakh per annum.

TRENDS IN RETAILING:

The top seven trends in retailing in India are as follows: 1. Shift from Unorganized to Organized
Retailing 2. Store Design 3. Competition 4. New Form of Retailing 5. Technology 6. Consumer
Buying Behaviour 7. Entertainment.

1. Shift from Unorganized to Organized Retailing:

Retailing in India is thoroughly unorganized. There is no supply chain management perspective.
The key factors that drive the growth of organized retailing in India are higher disposable
incomes, rising urbanization, growing consumerism, nuclear family structure, growing number
of educated and employed women population.

2. Store Design:
Irrespective of the format, the biggest challenge for organized retailing is to create an
environment that pulls in people and makes them spend more time in shopping and also
increases the amount of impulse shopping.

3. Competition:
Competition is increasing between different types of retailers. Discount stores, departmental
stores, supermarkets, etc. all compete for the same customers. The small independent retailers
survive by providing personal services to the customers.

4. New Form of Retailing:

Modem malls made their entry into India in the late 1990s, with the establishment of Crossroads
in Mumbai and Ansal Plaza in Delhi. India’s first true shopping mall, ‘Crossroads’—complete
with food courts, recreation facilities and large car parking space—was inaugurated as late as
1999 in Mumbai. Malls have given a new dimension to shopping experience.

5. Technology:
Technology today has become a competitive tool. It is the technology that helps the organized
retailer to score over the unorganized players, giving both cost and service advantages.
Technology has also made possible the growth of non-store retailing.

6. Consumer Buying Behaviour:

In India, there are no uniform trends with respect to consumer buying behaviour. There are
visible differences in the shopping pattern of consumers across income segments. Organized
retailing has definitely made headway in the upper class.

However, even in this segment, items such as milk, fruits, vegetables and a significant portion of
‘through-the-month’ purchases seem to be done at traditional outlets. Organized retail outlets
seem to be associated with branded items/special purchases. Organized retailing does not seem to
have made an impact on the lower class, except for ‘curiosity’ shopping.

7. Entertainment:
Modem retail formats provide a place for people to assemble, and a means of entertainment, by
providing facilities such as food courts, mini theatre, children’s play spaces and coffee shops.
These facilities help the customers enjoy shopping

U.S. retailers and foreign markets – Foreign retailers and U.S. markets

The United States is a major player in the global retail industry, with a large domestic market and
a significant presence in foreign markets. Foreign retailers also have a strong presence in the
U.S. market, and there is increasing competition between U.S. and foreign retailers in both
domestic and international markets.

U.S. retailers in foreign markets

U.S. retailers have been expanding their operations into foreign markets for decades, and today
they have a presence in almost every country in the world. Some of the largest U.S. retailers with
a global presence include Walmart, Target, Costco, and Macy's. These retailers have been
successful in foreign markets by adapting their business models to local conditions and by
offering a wide variety of products and services.

Foreign retailers in the U.S. market

Foreign retailers have also been expanding their operations into the U.S. market, and today they
account for a significant share of retail sales in the United States. Some of the largest foreign
retailers with a presence in the U.S. include IKEA, H&M, Zara, and Uniqlo. These retailers have
been successful in the U.S. market by offering unique products and services that appeal to
American consumers.

Competition between U.S. and foreign retailers

There is increasing competition between U.S. and foreign retailers in both domestic and
international markets. This competition is driven by a number of factors, including the
globalization of the retail industry, the rise of e-commerce, and the changing preferences of
consumers.

The future of U.S. and foreign retailers

The future of U.S. and foreign retailers is uncertain, but there are a number of trends that are
likely to shape the industry in the years to come. These trends include the continued growth of e-
commerce, the increasing importance of sustainability, and the changing demographics of
consumers.
Certainly! The interaction between U.S. retailers and foreign markets, as well as foreign retailers in
U.S. markets, is a dynamic aspect of global commerce. Here's an overview:

U.S. Retailers in Foreign Markets:

1. Expansion Strategies: Many U.S. retailers, such as Walmart, Starbucks, and

McDonald's, have expanded internationally. Their strategies often involve adapting to
local tastes, cultures, and regulations.
2. Challenges: U.S. retailers face challenges like understanding local consumer behavior,
dealing with currency fluctuations, and navigating foreign regulations.
 3. Success Stories: Companies like Apple have seen significant success in foreign markets,
with international sales accounting for a large portion of their revenue.

Foreign Retailers in U.S. Markets:

1. Entrance: Foreign retailers often enter the U.S. market through various means, such as
opening flagship stores, partnering with local businesses, or acquiring existing U.S.
companies.
2. Competition: The presence of foreign retailers can intensify competition in the U.S.
market, leading to innovations, competitive pricing, and enhanced consumer choices.
3. Examples: Retailers like IKEA (Sweden), Uniqlo (Japan), and Aldi (Germany) have
made notable expansions into the U.S., bringing unique products and retail experiences.

Key Considerations:

1. Cultural Adaptation: Both U.S. retailers abroad and foreign retailers in the U.S. need to
adapt to cultural differences, including consumer preferences, shopping habits, and local
traditions.
2. Regulatory Compliance: Retailers must navigate various regulations related to trade,
consumer protection, taxation, and more, which can vary significantly between countries.
3. E-commerce Impact: The growth of e-commerce has further globalized retail, with U.S.
and foreign retailers alike exploring online sales, cross-border shipping, and digital
marketing strategies.

In summary, the interaction between U.S. retailers and foreign markets, as well as foreign
retailers in U.S. markets, is a multifaceted phenomenon shaped by market dynamics, cultural
considerations, regulatory environments, and technological advancements.

ELECTRONIC DATA INTERCHANGE:

EDI, which stands for electronic data interchange, is the intercompany communication of
business documents in a standard format. The simple definition of EDI is a standard electronic
format that replaces paper-based documents such as purchase orders or invoices. By automating
paper-based transactions, organizations can save time and eliminate costly errors caused by
manual processing.

In EDI transactions, information moves directly from a computer application in one organization
to a computer application in another. EDI standards define the location and order of information
in a document format. With this automated capability, data can be shared rapidly instead of over
the hours, days or weeks required when using paper documents or other methods.

Today, industries use EDI integration to share a range of document types — from purchase
orders to invoices to requests for quotations to loan applications and more. In most instances,
these organizations are trading partners that exchange goods and services frequently as part of
their supply chains and business-to-business (B2B) networks.

A growing number of companies are discovering the many advantages of Electronic Data
Interchange (EDI) and its ability to automate the exchange of data between systems and
applications. Benefits include increased reliability of business processes, lower costs and
fewer errors. But it is companies in the transport & logistics sector as well as retail, in
particular, that could be reaping the rewards of integrating EDI within their business
processes.

Using EDI does away with the need for human intervention in business processes, as all
information is exchanged via IT systems. This makes exchanging information with partner
companies along the supply chain easy, secure, fast and above all error-free– all thanks to EDI.

RETAIL SECTOR:

Retail and e-commerce companies, in particular, can benefit greatly from EDI. In the world of e-
commerce, it is vitally important that orders be processed quickly and without errors. What’s
more, in order to keep storage costs low, an (online) retailer will never stock more products than
necessary, instead opting to base its stock level on market demand. When the inventory of a
given product drops below a certain level, EDI can be used to automatically place new orders
with a manufacturer or wholesaler, making for an automated, fast and error-free ordering
process. A powerful EDI solution saves (online) retailers unnecessary storage costs, which
means they’re able to set more attractive prices for their products. This increases the
competitiveness of the respective retailer and improves its chances of surviving in a crowded
retail market.

EDI also allows online retailers to process orders faster. Oftentimes, online retailers will work
together with numerous distribution partners. Thanks to EDI, these partners can now
automatically be sent shipping messages, for example. Packing slips are also created
automatically, meaning customer delivery details don’t have to be painstakingly retyped by hand,
either. The results speak for themselves. Orders reach end consumers faster, improving the
reputations of online retailers, which are often based on how fast and reliable the online order
process is. This, in turn, increases the likelihood of repeat purchases.

After placing an order, the customer is automatically emailed an invoice with an estimated
delivery date. Another email links the customers to the distribution partners’ track-and-trace
feature, allowing the customers to monitor the delivery day and window for their parcels

TRANSPORT & LOGISTICS

The transport & logistics sector has always been a very information-heavy industry, which relies
on large volumes of data to correctly carry out all manner of processes related to transporting
goods. If transport information is not readily available, then this can put a strain on operations
and result in late deliveries to companies and consumers.
To make their products, manufacturers rely on raw materials, which arrive by ship, truck or train,
before being stored on the manufacturer’s premises. Once the manufacturing process is
complete, the products are handed over to wholesalers before eventually reaching the consumer –
the products’ last stop in their journey along an extensive distribution channel.

 INTEGRATIONS WITH ERP, WMS, ETC.

 FAST & FAULTLESS COMMUNICATION

  AUTOMATIC ORDERS

 DOCUMENT GENERATION

 TRACK AND TRACE

 ON PREMISE AND CLOUD-BASED

Gone are the days of having to rely on paper forms such as order confirmations and packing slips
– all thanks to EDI. Instead, the various systems of the partner companies along the supply chain
are able to exchange the necessary data automatically. Warehouse Management Systems (WMS)
and Transport Management Systems (TMS) of the various supply chain partners can share
information with each other easily, meaning each company is able to carefully adjust its stock
levels to demand from the supply chain. This allows for cost savings, gained from more efficient
storage, which can then be passed on to the (end) consumer, who, in turn, also enjoys a more
competitive retail price.

DATA MANAGEMENT IN RETAIL INDUSTRY:

Data is the foundation for developing and delivering better retail experiences. Data is found in
every facet of a retail organization and can be used to extract insights across the value chain into
operational performance and customer behavior, as well as leveraged to power improved service
experiences. From online browsing to social engagement to in-store purchasing, data abounds.
However, capturing data is only a portion of data management. Stitching together disparate data
for analysis requires proper handling of data across an organization—thus improving a retailer’s
ability to make impactful decisions about running their business.

For example, with the growth of mobile shopping, customers have come to expect that retailers
have a reasonable amount of data about their shopping habits to be used to improve the
experience. A use case example is a personalized product and promotion offering sent directly to
a customer’s mobile device when shopping in a specific location within a physical retail store.
Leveraging data on what, where, how, how many and how often, plus additional inputs such as
store product availability, creates opportunities to send real-time promotion messages to a
customer’s device when the customer is shopping in proximity of a targeted product.
Effective data usage can activate the customer to buy by helping the retailer delivering a more
relevant experience; for example, retailers might send the customer a notification with a discount
code for the retailer’s eCommerce website. Further, this data will drive actionable insights from
which company leaders may steer their actions with data-backed decisions.

Database management and data warehousing are critical components of retail management,
enabling businesses to collect, store, analyze, and utilize vast amounts of data to drive informed
decision-making and optimize operations.

Database Management

A database is a structured collection of data organized in a way that allows easy access,
management, and retrieval. In retail, databases are used to store information such as product
details, customer data, sales transactions, and inventory levels. Effective database management
ensures the accuracy, integrity, and security of this data, making it readily available for various
business functions.

Data Warehousing

Data warehousing involves extracting, transforming, and loading data from various sources into
a central repository, known as a data warehouse. This process enables the consolidation and
analysis of data from multiple systems, providing a comprehensive view of the business. Data
warehouses empower retailers to conduct in-depth analysis, identify trends, and make data-
driven decisions to improve customer experience, optimize inventory management, enhance
supply chain efficiency, and drive business growth.

Benefits of Database Management and Data Warehousing in Retail Management

1. Improved Customer Experience: By leveraging customer data, retailers can personalize

marketing campaigns, provide tailored recommendations, and enhance overall customer
engagement.
2. Optimized Inventory Management: Real-time inventory tracking and analysis enable
retailers to maintain optimal stock levels, reduce overstocking, and prevent stockouts.
3. Enhanced Supply Chain Efficiency: Data-driven insights help retailers optimize their
supply chains, reduce lead times, and improve collaboration with suppliers.
4. Increased Sales and Revenue: Data analysis empowers retailers to identify high-
performing products, target specific customer segments, and develop effective pricing
strategies.
5. Better Decision-Making: Access to accurate and timely data enables retailers to make
informed decisions based on facts and insights rather than gut feelings.