Retailing 4.0 and Technology-Driven Innovation: A Literature Review

Retailing 4.0 and Technology-Driven Innovation: A Literature Review

Fabio Musso (Carlo Bo University of Urbino, Italy) and Roxana Adam (National Institute of Statistics, Romania)
DOI: 10.4018/978-1-7998-1412-2.ch015
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The chapter analyzes the contribution of technology for boosting innovation within the retail industry. The study focuses on the main areas of innovation for retailers, both in the relationships with suppliers and the final demand. With reference to vertical relationships (for supplying activities), the key innovation areas are those of technology-based interaction tools, joint management of supplying activities, and E-sourcing. In the relations with consumers, technology is stimulating innovation on checkout technologies, dynamic in-store pricing, electronic and mobile payments, augmented reality, artificial intelligence-supported devices, and self-service technologies.
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Technological Innovation In Retailing

Innovation in retailing has been divided into technology-based innovation and market-based innovation (Castaldo, 2001; Cardinali, 2005; Musso, 2010; 2012a), with the latter linked to demand-driven factors, which are related to variations in the characteristics and behaviors of customers that companies seek to comply with (Kaufman-Scarborough & Forsythe, 2009), and competitive factors, as a result of differentiation strategies of retailers for responding to changes in the final demand.

Within retailing companies, innovation has been classified into four fundamental categories (Dupuis, 2000; Whysall, 2000):

  • 1.

    Innovation in the store concept, mainly referred to front office structures, organization and activities;

  • 2.

    Innovation in channel relationships (back office), which mainly concern logistics and information flows;

  • 3.

    Organizational innovation, aiming at improving the management of the corporate network and the overall supply chain;

  • 4.

    Structural innovations, which concern the way in which the previous categories can be recombined according to an innovative trading concept.

Key Terms in this Chapter

Radio-Frequency Identification (RFID): The use of an object (typically referred to as an RFID tag) applied to a product, or a package, for the purpose of identification and tracking using radio waves.

Multimedia Kiosk: A computer terminal featuring specialized hardware and software that provides access to information and applications for communication, commerce, entertainment, or education. Multimedia kiosks are typically placed in high foot traffic settings such as shops, hotel lobbies or airports. Integration of technology allows kiosks to perform a wide range of functions, evolving into self-service kiosks. Customised components such as coin hoppers, bill acceptors, card readers and printers enable kiosks to meet the owner's specialised needs.

Vending Machine: An automated machine that provides items such as snacks, beverages, cigarettes and other products goods to consumers after money, a credit card, or a specially designed card is inserted into the machine.

Cross-Docking: The practice of unloading materials from an incoming semi-trailer truck or rail car, and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between.

Augmented Reality (AR): Media format that integrates virtual information into a user's perception of the realworld. AR involves devices (smartphones, tablets, headsets, eyeglasses) which impose a virtual overlay over the physical world.

Electronic Shelf Label (ESL) System: Used by retailers for displaying product pricing on shelves. The product pricing are automatically updated whenever a price is changed from a central control server. Typically, electronic display modules are attached to the front edge of retail shelving.

Internet of Things (IoT): A system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Vendor Management Inventory (VMI): An operating model in which the supplier takes responsibility for the inventory of its customer. In a VMI-partnership the supplier makes the main inventory replenishment decisions for the customer: monitors the buyer’s inventory levels and makes supply decisions regarding order quantities, shipping and timing.

Near-Field Communication (NFC): A set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within 4 cm (1?1/2 in) of each other. NFC devices are used in contactless payment systems, similar to those used in credit cards and electronic ticket smart cards and allow mobile payment to replace or supplement these systems.

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