oHow has technology changed the role of retail managers? oHow has the technology improved retail management, not just how technology has improved? Provide specific examples. oWhat, if any, are the downsides to the technology that may present challenges to the retail manager? Effectiveness of Technology Consumers have many choices when deciding where to purchase their goods. While retailer managers are deciding how to win the consumer’s business and increase revenue, they are also constantly trying to figure out ways to reduce costs.
Technology helps retail managers improve areas of inventory and supply chain management as well as customer satisfaction and loss prevention (Green, 2002). This paper explains how technology improves the effectiveness of retail management and has changed the role of managers. Before databases and data warehouses, business intelligence for some retail managers meant making decisions based on intuition, status quo, or mimicking the competition.
Today, however, technology, like data warehouses, provides the tools for managers to make decisions based on relevant, organized data, which reduces the chances of making poor decisions (Berman & Evans, 2007). Information, when gathered, stored, and analyzed on a continuous basis reduces risk in management decision making. As an example, after implementing a real-time analysis tool, management at Staples now identifies consumer trends and makes better merchandising decisions (Berman & Evans, 2007).
Without point-of-sale (POS) systems, retail managers depended on manual calculator-type entries for tallying receipts, taxes, and inventory levels. Today, POS systems automate receipts and track important information about inventory transactions. Valuable performance indicators, such as voids, price overrides, and multiple credit transactions can be retrieved from the POS and aid managers in their loss prevention efforts. Traditionally, many retailers incurred losses during the warehousing process (Davis, 2006).
Inventory management technology tracks key information about product while in the possession of the retailer, allowing managers to easily track inventory turns, movement of items, and stock to sales ratio. Because managers are more informed, they can respond faster to changes in demand, lowering costs related to inventory levels. In addition to improving retail management, technology has helped retail businesses through better marketing strategies and consumer experiences.
According to Berman& Evans (2007), Staples uses multi-variable testing (MVT) to test and measure multiple changes in operations, services, and procedures simultaneously that pinpoints which creative styles and promotions provide the best returns. Intense marking research means each consumer receives a more personalized shopping experience both in stores and online. Additionally electronic data interchange (EDI) provides a platform for information to flow regularly between retailers and suppliers, improving communication and planning between managers and vendors, allowing each to react faster to demand (Berman & Evans, 2007).
Retailers receive timely and accurate information from suppliers such as new product announcements, training materials, and price changes. Technology provides many benefits to the retail industry and its managers; it also has drawbacks. Implementing new technologies presents learning curves for managers, staff, and team members and introduces new areas of risk (Davis, 2007). Some team members can be resistant to changes causing retailers to lose time and money while drawing out the implementation of the technology. Managers may not grasp the reporting and access capabilities new systems bring.
Loss reports, for example, may not be analyzed during the learning curve and users may be granted access privileges they shouldn’t have. Each opens up the retail business to theft and fraud they may not have previously experienced. Whereas managers are ultimately responsible for increasing margins, reducing costs, and improving the customer experience, technology can certainly aid them in their decision making. Successful retailers like Staples use technology such as MVT and data warehousing to build their business and increase business intelligence.
Today, retail managers continue to make risky decisions, but the successful manager backs those decisions with accurate, real-time data provided by technology. ? References: Berman, B. , & Evans, J. R. (2007). Retail management: A strategic approach (10th ed. ). Upper Saddle River. NJ: Prentice Hall. Davis, J. (2006). RETAIL Risk and High Technology. Risk Management (00355593), 53(6), 16-19. Retrieved from International Security & Counter Terrorism Reference Center database. Green, J. , (2002). Technology advances in retail. Retrieved July 17, 2010 from www. arubanetworks. com