Industry Questions Revised

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Industry Questions Revised

  1. 1. A BRIEF LOOK AT THE RETAIL INDUSTRY AND IT’S USE OF TECHNOLOGY
  2. 2. Technologies driving retail <ul><li>All retail companies rely on transactional systems, accounting systems, inventory tracking mechanisms, and a massive network infrastructure to transfer data </li></ul><ul><ul><li>Transactional systems must relay data from the point of sale system to the central computer and send data to manufacturers. This can be done through many method to include EDI (electronic data interchange) </li></ul></ul><ul><ul><li>Just in time production (an inventory tracking mechanism) keeps companies from being stuck with unnecessary inventory by ordering parts and supplies on an as need basis </li></ul></ul><ul><ul><ul><ul><ul><li>(Post , pg.200 – 223) </li></ul></ul></ul></ul></ul><ul><li>Some of the more recent technologies being implemented are RFID, SANs, and Online Systems (e-commerce sites). </li></ul>
  3. 3. RFID <ul><li>Radio Frequency Identification </li></ul><ul><li>A small chip that contains an antenna and several transistors and can be scanned from distances to track inventory. (Post, pg 202) </li></ul><ul><li>RFID is better than the traditional barcodes for two major reasons: </li></ul><ul><ul><ul><li>Bar codes can not hold as much data as RFID chips </li></ul></ul></ul><ul><ul><ul><li>Bar codes are often difficult to read </li></ul></ul></ul><ul><li>(Post, pg 202) </li></ul><ul><li>One popular use for RFID chips is the microchip dogs are implanted with for tracking </li></ul><ul><li>Walmart lead the move for RFID implementation </li></ul><ul><li>(RFID Journal, 2008) </li></ul>
  4. 4. RFID (cont.) <ul><li>RFID has not yet been adopted by a large number of retailers due to the high cost. </li></ul><ul><li>Walmart started the move in 2003, while Target trailed close behind by issuing a mandate in 2005 for all suppliers to use RFID tags along with Albertson’s according to the RFID Journal. </li></ul><ul><li>To this day, RFID implementations have slowed and Alberston’s has discontinued it’s mandate altogether. </li></ul><ul><li>http://www.forbes.com/logistics/2007/05/02/amr-rfid-assess-biz-logistics-cx_lc_0502amr.html </li></ul>
  5. 5. SAN <ul><li>Storage Area Network </li></ul><ul><li>SAN’s allow retailers to store large amounts of data by operating multiple servers at the same time. </li></ul><ul><li>SAN’s are capable of allocating storage space where it is needed and reallocating space that is not being used. By doing this, companies are able to store more data in one location. </li></ul><ul><li>Because the SAN is operating multiple servers, if one server fails, the other can take over the load and no data is lost. </li></ul><ul><li>With the SAN large data warehouses can be easily stored and backed-up </li></ul><ul><li>Although SAN’s are more commonly used in the IT industry, they are being readily adopted by many retail companies </li></ul><ul><li>(Wikipedia, 2008) </li></ul>
  6. 6. SAN (cont.) <ul><li>Starbucks adopted the SAN technology early on to manage it’s 200 TB of data. </li></ul><ul><li>It also adopted this technology to “implement a more robust disaster recovery plan, create a more scalable architecture, and provide a platform that could accommodate future growth and new projects”. </li></ul><ul><li>http://www.cisco.com/en/US/prod/collateral/ps4159/ps6409/ps4358/prod_case_study0900aecd80545668.html </li></ul>
  7. 7. Web Technology <ul><li>Almost all retailers have an e-commerce site where consumers can visit to purchase items when they are unable to reach a store. </li></ul><ul><li>These sites can often be used to check a stores inventory saving consumers the trip to the store when an item is unavailable. </li></ul><ul><li>A few examples of e-commerce sites: </li></ul><ul><ul><li>www.walmart.com </li></ul></ul><ul><ul><li>www.target.com </li></ul></ul><ul><ul><li>www.starbucks.com </li></ul></ul><ul><ul><li>www.toysrus.com </li></ul></ul>
  8. 8. Competition in the Retail Industry <ul><li>Because of the economy the level of competition is decreasing. </li></ul><ul><li>Most people are looking for discounted products instead of splurging on discretionary and more expensive items. </li></ul><ul><li>Therefore the competition has been reduced to about 6 stores, including Walmart, Target, and Costco to name a few, that continue to offer lower priced items. </li></ul><ul><li>Walmart attributes it’s success to &quot;… improving general store standards, improving the front-end store experience, merchandising, marketing, inventory control and labor scheduling,..&quot;. </li></ul><ul><li>These things could not be accomplished by Walmart, or any other retailer without the introduction of technologies to manage the business. </li></ul><ul><li>http://www.forbes.com/markets/2008/04/10/wal-mart-update-markets-equity-cx_cg_0410markets29.html </li></ul>
  9. 9. Problems with the implementation of new technologies <ul><li>One of the problems with RFID was cost. The cost of RFID tags when they first began implementation was around 50 cents per tag according to the RFID Journal. </li></ul><ul><ul><li>This was one of the reasons Albertson’s decided to terminate it’s RFID implementation. They were not receiving a return-on –investment. </li></ul></ul><ul><li>Many retailers suggest that RFID may be better implemented on supply chains that deliver to distribution centers as opposed to direct store delivery. </li></ul><ul><ul><li>They believe they technology will not be ready for this level of deployment for another few years. </li></ul></ul><ul><li>Another major issue with RFID implementation is privacy. There is great concern that RFID chips can be tracked from too great a distance and this fault could potentially be exploited. </li></ul><ul><li>http://www.rfidjournal.com/article/articleview/4021/ </li></ul>
  10. 10. Problems with the implementation of new technologies (cont.) <ul><ul><li>One problem cited by Land’s End, was that online retail still needs to “provide good customer service”, and thus a website may not necessarily save money. </li></ul></ul><ul><ul><li>To solve this problem, they have implemented personal shoppers that can be contacted to ask questions about apparel, previous orders and other questions the customer may have in only a few minutes. </li></ul></ul><ul><ul><li>(Post, pg. 230) </li></ul></ul><ul><ul><li>http://www.landsend.com/ </li></ul></ul>
  11. 11. Sources <ul><li>Cecere, L.(2007, March 02). Three Years Of Retail RFID Pilots. Forbes. Retrieved April 14, 2008 from http://www.forbes.com/logistics/2007/05/02/amr-rfid-assess-biz-logistics-cx_lc_0502amr.html </li></ul><ul><li>Gutierrez, C. (2008, April 10).Walmart embarrasses most competition. Forbes. Retrieved April 15, 2008 from http://www.forbes.com/markets/2008/04/10/wal-mart-update-markets-equity-cx_cg_0410markets29.html </li></ul><ul><li>Post, G., Anderson, D.(2006). Management information systems: Solving business problems with information technology. New York:McGraw-Hill Irwin. </li></ul><ul><li>Retail Star Manages Rapid Data Growth to Keep Pace with Business Success . Retrieved April 10, 2008 from http://www.cisco.com/en/US/prod/collateral/ps4159/ps6409/ps4358/prod_case_study0900 aecd80545668.html </li></ul><ul><li>Storage Area Network. (2008, April 4). In Wikipedia, the free encyclopedia .Retrieved April 12, 2008, from http://en.wikipedia.org/wiki/Storage_Area_Network_%28SAN%29 </li></ul><ul><li>Swedberg, C.(2008, April 14).Suppliers find no incentive to adopt RFID for direct store delivery. RFID Journal. Retrieved April 16, 2008 from http ://www.rfidjournal.com/article/articleview/4021/ </li></ul>

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