Technology and Retailing and Firms: Challenges Ahead

Technology Shifts In Retailing

The history of retailing also dates back with a history of the role of technology in society. A bird’s eye view at the evolution of retailing reveals that technology has played a role as the primary enabler of change. As technology grows sophisticated, the consumer’s expectations also swell exponentially. In fact the convergence of a few key technologies is enabling that change. Smart cards payment technology has driven new revolution in retailing as this technology has not only helped in increase the quick buying decisions of consumers but also attracted large mass of potential customers into retail gamut. Smart cards have offered a wide variety of applications that could revolutionize payment transactions, reduce costs, and spur online purchasing. Despite the benefits these electronic purses offer, a number of issues inhibit their widespread use, especially in open systems. A tested technology, smart cards can store various types of encrypted information as well as cash balances and digital signatures. A secret key can be used to secure e-commerce transactions as well as protect the card contents. These keys are vulnerable to attack, however, and the stored-value feature is attractive to international money launderers. Despite some risk factors the smart cards are globally accepted by the retailers (Kearns and Loy, 2003).

There has been a significant change in retail trading over the years. Modernization, systematization, and consolidation are the catch phrases and keys to understanding retail. The present age is that of rocket science retailing which is an act of blending the traditional forecasting systems with the prowess of information technology. It fuses data and instinct with computer models to create a high-tech forecasting system supported by a flexible supply chain. The need is to evaluate not what the retailer sold but what it could not sell and what it could have sold had the inventory been available. Merchandise decisions have become more complex and the penalties for errors even steeper. To reduce the fallouts and to increase the customer satisfaction, merchandise planning has become all the more important. A new set of software tools and sophisticated techniques have emerged, which promise to revolutionize the entire merchandising chain, from buying to stocking to pricing. The latest techniques used for efficient inventory management include vendor managed inventory, forecasting techniques, inventory classification, computer assisted ordering, distribution centers and direct store delivery (Kumar and Banga, 2007).

The technology impact on the various functions in retailing has been increasing. As the number of channels for a retailer increases, managing the dynamics of customer behaviour in the rapidly emerging multi-channel environment becomes complex. Building and retaining a long-term association with customers require that relationship management applications should be able to accommodate the various channels. Multi-channel customers are the most valuable customers and hence multi-channel integration would improve customer loyalty and retention (Ganesh, 2004). Besides self service retail stores and grocery stores, the technology has enormously supported the buying process of consumers for capital goods like automobiles. The purchase of a car is a highly involved process when compared with other retail experiences. Despite the range of purchase channels available and the increased level of accessible information, the majority of customers still choose to buy a car through a traditional dealer network. However, since the end of twentieth century the computer assisted buying process was well received by customers (Reed and Sekar, 2004).