ASSIGNMENT DRIVE FALL 2014

PROGRAM MBADS (SEM 3/SEM 5) MBAFLEX/ MBA (SEM 3) PGDROMN (SEM 1)

SUBJECT CODE & NAME ML0013-Retail IT Management
BK ID B1764 CREDIT & MARKS 4 Credits, 60 marks

Q.No 1 Explain the role of IT in the Retail Industry.

Explanation of different roles 10
Answer:
Role of IT in the Retail Industry
One of the most significant advances in the technology used by retailers around the world is the
use of electronic information technology. Electronic scanning and bar-coding is the key to this
technology. The underlying reasons why information technology improves efficiency are:
Faster checkout throughput times and reduced queuing.
Prompt and improved information related to stocking. For instance, the improved information
on sales allows well-organized allocation of stores labour force.
Reliable and better information regarding new product development.
Trading along various channels of supply chain can be made automatic and even paper-less.
Better financial control (such as collecting cash from creditors) through improved sales
information.
1. Product Development
With the advent of information technology, the quantity and quality of consumer data collected
by retailers from consumers has improved drastically. This is helpful in understanding how
consumer preferences have changed over time.
2. Retail Demand Forecasting
Retailers are regularly enrolled in the task of estimating the quantity of goods to be purchased
by customers. For this purpose, retailers employ latest demand forecasting methods and tools.
An analytical, judicial and logical approach can be used to forecast consumer demands.
3. Inventory Management
Inventory includes raw materials, semi-finished goods, finished goods for sale, or goods in the
process of being manufactured. Inventory accounts approximately thirty percent of the
production cost. Therefore, retailers would like to take optimal benefit of the deployment of
inventory so that uncertainties, constraints, and complexities should be reduced to the
maximum extent possible along with their global supply chain and that too, on a continuous
basis. This offers retailers opportunities to improve their inventory forecasting ability and
correctly set inventory targets. Information technology based tools and software offer
established and market leading solutions for determining best possible

4. Store Management
In order to ensure a smooth flow of store activities, it is necessary that the management should
define the total tasks and the appropriate person for each task. It has been seen that professional
stores/chain stores normally prepare an operation manual or blueprint which becomes the base
for assigning duties and responsibility to various levels of staff.
5. Customer Service
Database management technology plays a vital role in highlighting the various obstacles that
hinder a retailers ability to close or bridge the gap between customers expectations and
perceived value. The two widespread sources of customer complaints in the retailing industry
are about pricing issues and non-availability of available store staff to help locate merchandise
or answer queries.
6. Voice Communication
For the purpose of communicating with their retail staff, many big retailers use walkie-talkies or
two-way radios. This is a simple and fast way to communicate between store employees. In
practice, two types of communication system are used one requires licensed frequencies, the
other requires an unlicensed spectrum. Both types are in practice and have their own set of
merits and demerits. On the one hand, the licensed radio results in extra costs for the retailer (in
order to pay for the frequency license), but it offers fast and uninterrupted communication. On
the other hand, an unlicensed walkie-talkie is cheaper and free to operate, but is subject to
interference from other businesses using the same technology. Both systems require continuous
monitoring by someone with an off-the-shelf scanner and are subject to interception. Further, it
is imperative for both the systems to have store personnel to carry around a radio.
7. Customer Relationship Management (CRM)
Building and sustaining relationships with the members of the distribution channel is vital for
the long term survival of any retail firm. Customer Relationship management is an effective way
to attract, maintain and enhance relationships within the retail industry. Due to increased
complexities in the retail industry, Indian retailers have understood the significance of IT
applications in their retail strategy. Even leading retailers have been improving customer
service and channel relationships by empowering personnel, through IT training.
8. Point of Sale (POS)
Point of sale systems collect consumer related data at the time and place of sale. With the use of
computers or specialized terminals, point of sale systems are combined with barcode readers,
magnetic strips, cash registers, and optical scanners for precisely and immediately capturing the
transaction. Point of sale system when connected online to a central computer, is used to know
up-todate inventory status, and credit checking. Point of sale systems also may be stand-alone
machines that store the daily transactions until they are transmitted to the main computer for
processing.
9. Payments

In the retail industry, it is not only the inventory and store operation function where
technological advances are being used but the payments also account for a big part of the IT
revolution. Most of the retailers cash counters are facilitated by technological advancements.
Customers can now pay their bill through creditor debit cards which ensure fast and safe
transactions.

2 E-Retailing is spreading across many industries in the world. Enumerate the

significance of e-retailing across various industries.
Explanation 10
Answer:
E-retailing is the buzzword in modern business. It is spreading across many industries in the
world. Given below is the state of various industries which ascribe to the increasing role and
significance of information technology in the retail sector.
(i) Travel and tourism sector
Online travel industry occupies the highest market share. i.e., 25 per cent among all
goods/services categories, as per a study conducted by Global Business Insights. The primary
reason for increased role of IT applications in travel and tourism industry is that the consumer
spending has increased drastically and the modern customer is no longer dependent on touts
and booking agents. Information about the availability of tickets in trains/buses/flights, prices
of various categories of tickets, date, timings, everything is available online. Consumers now
need not to go to booking offices and waste their time. Not only booking but in case of some
emergency, cancellation of tickets can also be done online. Only a nominal amount is deducted,
varying from company to company and booking policies. Today there are countless online travel
and tourism websites, thus the challenges for retailers are to provide quick, efficient, reliable
and less complicated services to e-buyers.
Customers are required to give certain information like date of journey, number of members and
the price range (if any). Based on the data entered into the system, within few seconds, customer
will get the status of his preference. Technology provides the opportunity for hassle-free and
direct interaction between the travel operator and the consumer. The design of the website, level
of the information, ease of navigation and trust play a crucial role for repeated purchase.
(ii) Online book stores and music shops
According to a study conducted by Global Business Insights (2005), books and music CDs
account for 15 per cent of the global consumer spending. In this product category, consumers
find a difference in the pricing strategies of various retailers as compared to brick and mortar
stores. To purchase books online, it is important for consumers to have complete information
about the edition of the book, number of pages, name of the publisher, cover page of the book
(paper or hard bound) and last but not the least, navigability of the site. The other factors in
consumers buying books online are the brand name, awareness about the retail site and the
trust.

(iii) Online apparel retailers

Apparel retailing accounts for the maximum footfall as compared to any other format of
retailing. Online apparel retailing is creating a challenge for store and catalogue retailers. Online
apparel stores provide more variety compared to the actual stores. Consumers who shop online
are those who prefer not to go outside to shop. The internet users who are well-versed with the
features of internet, who look for convenience and are risk takers shop online for apparel.
Frequent change/updating the fashion of apparels and discounted prices are other factors of
attraction. Online buyers are those who are fashion conscious and keep up with the latest trends.
To attract non-buyers, discounted prices can be an important instigator into online shopping.
Thus, it is a challenging task for apparel retailers also because of the risk of return after trial is
quite high and the process is lengthy.
(iv) Online gifts and flower stores
Gifts and flowers accounted for 7 per cent of consumers spending through online purchases last
year. Purchase of a particular type of gift of a particular brand depends on the recipients choice,
gender and age factor. Relationship also plays an important role in the brand chosen and pricing
of the gift. Gifts are brought from online stores because of convenience, variety and are also a
viable and cost effective option to send to persons living in far off places.
(v) Online Fast Moving Consumer Goods (FMCG) stores
FMCG goods occupy nearly 10 per cent of the online retail spending by global consumers. The
product range displayed online and at an offline store is similar. However, it has been observed
that in practice, the prices of the goods vary from store to store and online to offline form which
is the main reason for the popularity of few retailers who offer reasonable prices throughout
their catalog of goods. The note of precaution for various retailers is that online consumers
should not be segmented in the traditional way but based on their online buying preferences.

3 Explain Electronic Point of Sales (EPOS) and its advantages.

Meaning
Explanation of advantages 4+6=10
Answer:
Electronic Point of Sales
There are various IT products used at retail point of sales. These products are used for billing,
stock keeping, product marking and identification, service delivery and information sharing.
Electronic Point-of-Sales (EPOS) are computer based billing systems at the retail outlet. EPOS
systems are routinely used by retail businesses having large numbers of products and
voluminous sales, making the investment viable. One of the important objectives of automating
retail point of sales is to streamline billing operations and enhance the overall customer
experience. A basic EPOS, usually a standard personal computer with some extra accessories,

handles payments quickly, updates inventory and provides instant reports on sales and stocks
that allows greater control over retail business and helps increase customer satisfaction. EPOS is
a computer-based machine. It runs on Windows/Linux operating systems and retail application
software, commonly available in the market.
Advantages of EPOS:
Database creation: EPOS systems help create databases. Database management is the backbone of any business information system. Analysis on database helps management to take dayto-day and strategic decisions related to the organization. Day-to-day decisions include focus on
more profitable lines of business, improve demand forecasting, and minimize inventory.
Enhanced software modules: As the business grows, the software can be upgraded and
enhanced to include new features and functionalities whenever required. As the software is
independent of hardware, it offers flexibility in terms of adding new application software or
discarding the old one.
Connecting with ERP systems: EPOS terminals can be connected to back-office systems
such as ERP, supply chain, accounting packages, etc. This way the retailer can increase control
over his business and improve profitability. Some EPOS systems are capable of connecting with
popular accounting packages like Sage, Tally, and QuickBooks etc. With the coming of ecommerce retail, the POS data is updated on the websites on real-time basis. Electronic POS
systems are connected with such ecommerce portals and they update the date at regular
intervals. Such connectivity provides online customers with rapid, up-to-date stock information.
Connecting with suppliers: Wal-Mart, the international retail giant connects its point of
sales systems with suppliers. As soon as an item is sold, the system informs the supplier, who in
turn, replenishes the product. With the fast track system of procurement and just-in-time
concepts of inventory management, supplier themselves like to monitor sales of his customers.
If EPOS systems are linked to suppliers extranet, they provide suppliers with access to real-time
stock information, allowing them to manage their own purchase more efficiently.
Maintain customer relationship: EPOS systems facilitate maintaining CRM. In retail
business, retaining a customer is highly desirable. Retailers analyse customers data and are in
touch with them through emails, messages and greetings. The customer is also informed about
promotion schemes and discount sales on a regular basis. Customer relationship is an important
tool to keep the customer happy and satisfied. A satisfied customer is a loyal customer.
Build customer loyalty: Retailers vie for customer loyalty by introducing complex sales
promotion schemes, discounting structures, and coupons management. Automated systems at
retail outlets make it feasible to manage such schemes and discounts. This builds confidence in
the customer which, in turn, creates loyalty. Fast and accurate billing or checkout systems
increase efficiency.

4 Explain different point of sales software in detail.

Explanation of different software 10
Answer:
Point of sales software can be classified in the following three types: Legacy software, Best-ofbreed software, and ERP integrated software.
1. Legacy Retail Software
Any software solution that may have been developed or bought or traditionally used over a
period of time by an organization for its specific needs is called legacy software. It could be
developed in-house by employing programmers and system analysts or outsourced to a third
party developer. Legacy systems are usually found with older organizations that started
automation in early days of computerization. At that time either best-of-breed quality software
products were not available, or the concept of integrated solutions like ERP was at a primitive
stage. Due to high costs and uncertain results in legacy systems, today organizations tend to buy
best-of-breed software available in the market.
2. Best-of-Breed Retail Software
A feature rich readymade software available off-the-shelf is called best of breed. This software
runs independently at the retail outlet and has all the basic functions of sales, purchase,
inventory, and sales reporting. In the process of buying a retail best-of-breed software system
one must understand the main features that retail software offers. Proficient and effectual
logistics functions are the most important aspects of a retail store. Best of breed retail software
can comprise operations related to both, demand-based production and non demand based
production. It can cater to different types of merchandise like:
Food & beverage (including bonded)
Home entertainment (games, DVDs etc.)
Hi tech
Fashion goods
Household goods
Healthcare
3. ERP integrated retail software
Software can be ERP integrated or BI integrated. Best-of-breed retail software is called point-of
sale software because it manages the operations at the front office or check-out point. Best-ofBreed is anoff-the-shelf software that specializes in a sector or a function. There can be non-POS
best-of-breed software too.
Large retail chain organizations or departmental stores implement enterprise solutions for the
back-office operations management and best-of breed software for point-of-sales. If the retail
chain organization evaluates best of- breed software, it evaluates a product which can be
integrated to the back office system. There is ERP-integrated retail software available from
various vendors/manufacturers. ERP-integrated retail software may be available as a module of
the ERP system. Alternatively, the best-of-breed may also provide integration with some of the

best known ERPs of the world. For example, SAP comes along with IS Retail as an integrated
module. Best of breed software like Polaris Retail Excel is also integrated with SAP, whereas, IS
Retail is marketed and supported by SAP. Similarly, Microsoft-Dynamic promotes Singapore
based LS Retail as an integrated retail solution. ERP-integrated Point Of Sales software are
meant for retail chains and definitely supposed to be superior to any other category of retail POS
software.
In an ERP environment, the integrated retail management module works on the concept of
retail chain business model and distributed technology architecture. The major function in ERP
integrated retail software is its communication with the back-office ERP. Retail software sends
and receives relevant data from ERP systems. The data is further processed by ERP for analysis.

5 Explain Database Management Systems and its components.

o
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Meaning of DBMS
Explanation of components 4+6=10

Answer:
Concept of Database Management Systems:
The storage of data on paper, in electronic text files, or spreadsheet is difficult to manage. Such
data is inflexible, difficult to process, and involves high costs of maintenance. The various
disadvantages of traditional file system paved the way for systems that were more flexible,
secured, and could function independently. The concept of database management systems
overcomes these problems. The DBMS which maintain the data in a logically structured form
make it easy to retrieve data from the data repository. Even a non-programmer can use a data
repository and retrieve data by using certain tools in-built in the repository.
Therefore, the system that offers tools to create, store, process, modify, update, and retrieve data
from the repository is called Database Management System (DBMS). DBMS stores data and
helps manage the same through updation, retrieval, deletion, etc., by providing special tools to
do so.
Components of Database Management Systems:
(i) Data table: Records of the same subjects are placed in a file called Data Table. Multiple
tables are placed under the database. In the above example Product is the name of the table
that contains product price details.
(ii) Queries: How to retrieve data from a database? Queries are created to find and retrieve
data that meet conditions specified by the user. Through queries you can fetch records from
multiple tables. Through queries you can update or delete multiple records at the same time.
You can carry out predefined tasks or custom calculations on the data. In other words, queries
maintain programme instructions to retrieve data in the desired quantity and quality.

(iii) Forms: Forms facilitate data entry and report viewing. They are the bridge that connects
the user (data entry or viewer of reports) and the invisible database at the back-end. In DBMS
you can create forms to enter, view, or modify data. The forms can fetch data from one or more
tables and display it on the computer screen in a format as specified by the user. They provide
caption, space and dialogues for data entry or retrieval.
iv) Reports: Reports are the end result of any management information system. The retail
manager would like to see the sales trends in the last one month. This is done through reports.
Reports are created to retrieve the desired data from data tables using queries for specific needs.
The data is populated either on screen or in a print format. So, report is an effective way to
present data in a printed format. It is a formal, presentable, usually printed document that lists
data in a formatted manner.

6 Write short notes on:

a) Networking Devices
b) Open systems Interconnection(OSI)
a) meaning and types
b) Meaning and Explanation 5+5=10
Answer:
a) Networking Devices
As we discussed earlier, connecting many computers over a network requires hardware,
software, and communication cables. The hardware devices are hubs, switches, repeaters, and
bridges which are used to connect and enhance the signals and connect such networks. They
work as bridges between various computers. Similarly, connecting two networks is called
internetworking, and the devices needed to connect them are routers and gateways. We will
briefly cover the essential equipment used in networking.
(i) Hubs and switches
Hubs are the oldest devices used to connect computers on a network. With advancement in
technology, switches have replaced hubs. Their main aim is to provide a junction for data
transmission from one direction into another direction.
(ii) Repeaters
Repeaters regenerate a weakening signal on the network path. Signals on a network can travel a
fixed distance and then they slow down. A repeater is installed at the designated link which
receives the signal before it becomes too weak or corrupt. The repeater regenerates the original
bit pattern and puts the strengthened signal back on track.

(iii) Bridges
Bridges are used to connect two networks using the same protocol. They can divide a large
network into smaller manageable segments. Bridges can also separate the traffic of each LAN.
Thus, they play the role of filtering traffic and managing congestion on the network.
(iv) Routers
A router is a hardware device or software that acts like a station on the network. They are more
intelligent devices than repeaters and bridges. The software in them determines several paths
between the addresses and also determines the best path for current data transmission.
(v) Gateways
Gateways are the entrance points for another network in the network path. Over the Internet,
the gateway node works as a link between networks using different protocols. Gateways can
accept a packet formatted for one protocol and convert it into a packet formatted for another
protocol.
b) Open Systems Interconnection
Open Systems Interconnection (OSI) is an ISO standard that covers the complete network
communication aspect. An open system is a model that allows any two different systems to
communicate regardless of their architecture. Products from different vendors work on different
standards. The OSI model opens communication between different systems without requiring
changes in the logic of their hardware and software. The OSI model is not a protocol; it is a
model for understanding and designing a network architecture that is flexible, robust, and
interoperable. The OSI model works on the following seven layers.
1. Physical
2. Data link
3. Network
4. Transport
5. Session
6. Presentation
7. Application