Year: 2020

Any sale happening to the end customer which is not happening through a traditional retail channel or through a physical retail space is known as Non-store retailing. Amazon is a perfect example of Non-store retailing. Amazon does not have its own retail space from where it sells the goods to customers. It directly sells from its website and does not sell via a retail space. Hence, it is known as a Non-Store Retailer.

There are different types of Non-store retailers in the market. Some of the non-store retailers are very popular even today whereas others have died down. Let us make it clear that non-store retailing does not mean an average line of business. In fact, Non-store retailing is rising in importance due to the fact that cost of establishment is very low and all expenses are variable and not fixed. We will discuss the benefits of Non-store retailing in some time.

Types of Non-Store Retailing

• Direct Sales

One of the oldest forms of non-store retailing is the Direct sales type. The best way to describe this would be Door to Door salesmen who do cold calls to homes and offices to sell their products. They might also do other activities like Standees, promotions, and others to directly sell to the end customer.

This type of non-store retailing involves manual involvement and might involve usage of good selling techniques and personal selling skills. A door to door selling is used for selling technical equipment like Air Conditioners, Vacuum cleaners, Water purifiers and others. Even religious books are nowadays sold door to door. The advantage of this technique is that it is a quick closure type of sale. You will close the sale in 1 or maximum two visits.

The direct sale is a type of non-store retailing which is falling in usage. There are only somewhere it is still applicable. FMCG and Consumer durables are using it to some extent but it is almost absent in other industries. One of the reason is the noise in the market due to continuous advertisement because of which customers are irritated. The second is the growing sense of insecurity and the need for privacy due to which many salesmen are not allowed to enter into societies.

Amway, Tupperware and several other multi-level marketing firms actually use direct selling to good effect. They have chains of distributors and end sellers who sell to the end customers. Because the end seller generally knows the end buyer very well, the sale is high and these companies are case studies in the world of direct selling or non-store retailing.

• Direct Marketing

Unlike Direct selling, Direct marketing is on the rise especially since the adoption of the internet. It was initially used in the form of direct mail services where letters and coupons were sent to the end customer. Later on, once internet started, Email marketing was very successfully used where companies spent a huge amount of designing and sending emails to a large number of customers.

After emails, it went to websites and we could see Amazon, eBay, Alibaba and other websites grow and sell products by the truckloads. None of these sellers had a single store. All of it was online. Finally today, we can see that even small businessmen have their online store and a website and they sell their products not only through a physical presence but regularly take part in non-store retailing via social media or via their own websites.

Direct marketing is a segment which is supposed to grow even more over the years. Whatsapp has penetrated the market to a great extent and there are many “Whatsapp stores” opening up where you can get fashion apparels at a good discount. Already Amazon has surpassed Walmart in terms of its valuation and we see more and more online stores rising up. In fact, traditional retail is now afraid of the powers of direct marketing via the internet.

• Automatic Vending

If websites can be used for a large variety of products, then what is the 24×7 salesman for the FMCG sector? Well, it is the Automatic vending machine. If you are right now in your office, you probably have a machine by Café Coffee day or Nescafe which is vending tea or coffee for you. It might be a normal cup of coffee for u, but it is a unit of sale for Nescafe or Café Coffee Day.

Automatic vending machines are being used very smartly in the FMCG segment. We recently wrote an article on the top coffee brands and if you look at that article, you will find brands like Nespresso which are pushing their coffee vending machines into the market because once these vending machines are placed, the sale of coffee to the end customer becomes easier and it is higher in margins because there is no middleman involved.

Similarly, Cold Drink, Newspaper, Beer, Chewing gums, chocolates and even pizza is nowadays sold through an automatic vending machine. These are just straightforward examples of non-store retailing where you don’t need a store of 200 square feet to sell a pizza or cold drinks. Automatic vending has now become a prominent business model in FMCG and is being innovatively adopted in other sectors as well.

Besides the above three type – there is also the use of buying services in the form of a non-store retailer. The best example of this is an existing rate contract between government agencies and a seller who can sell products of a company. Because of the rate contract, the government agencies have to buy only from that seller and only at the given price. The seller, in turn, has to deliver the machine to all locations of the government agency.

However, because buying services as a model of non-store retailing is used very less, and because of the vast penetration of internet in our laptops and smartphones, buying services are now considered almost a part of direct marketing. Because practically everything happens online now.

Benefits of Non-Store retailing

• The cost of establishment is less: The cost of starting a website is always lesser then starting an offline retail outlet.
• Costs are variable in nature: While traditional retail has many fixed costs like rent, salaries etc, the costs of non-store retailing are variable and keep changing.
• Scaling up Is easier: Since the usage of internet for non-store retailing, scaling up of a non-store retailing business is easier than store retailing.

E-tailing Limitations

• Hard to Build Customer Relations

The friendly smile of an employee greeting you as you walk into a retail store can go a long way in building customer relations, helping ensure repeat business. Helpful and knowledgeable interaction with store employees creates confidence with customers. E-tailing lacks the opportunity for face-to-face contact and must try other means to establish long-term relationships with customers.

• Can’t Feel Products

Just looking at a photograph and reading a description of a product may give enough information for a consumer to make a purchase online. Some products, however, need to be held, smelled, touched and listened to in person, making them poor candidates for e-tailing. Musicians, for example, will typically want to play an acoustic guitar before making a purchase, since every guitar has its own unique feel and sound. A person interested in buying speakers for his home stereo may want to listen to them, which can be demonstrated in a retail store but not through an online e-tailer. Deciding on the purchase of a new car is another instance where people are apt to want to smell, sit in and test drive the car.

• Finding Your E-tail Store

In the 1989 movie, “Field Of Dreams,” the theme was, “If you build it, they will come.” Unfortunately, just creating a website does not ensure potential customers will visit your store. A retail store in a shopping mall is almost guaranteed it will get a lot of interest generated by foot traffic. While there are strategic promotional steps an e-tailer can take to try to increase the odds of his site appearing in the results list from a Google search, driving Internet traffic to a site requires a lot of work, with no sure results.

• Additional Costs

E-tailing involves additional costs for purchased items compared to purchases made at brick and mortar stores. Items must be mailed or shipped, incurring not only the additional cost of postage but also for packing materials, which can be significant if items are large or fragile. When items have to be returned, even more postage may be required by the e-tailer for return shipping costs.

• Lack of Consumer Trust and Security

People may have more trust and confidence in dealing with a physical retail store than with an online e-tailer. They know that the store is there, and if they have a problem they know where to go. In contrast, a website might look very impressive, yet the business might simply be a person working part-time with a laptop computer on a kitchen table, who could close the business at any time or simply decide to ignore customers who have complaints. Some consumers might not only be leery of the solidness of an e-tailer but also be hesitant to share credit card and other personal information over the Internet to someone they can’t see.

Bar coding is an automatic identification technology that allows data to be collected rapidly and accurately from all aspects of a company’s operations, including manufacturing, inspection, transportation, and inventory elements. Because of these attributes, bar coding is used for a wide range of applications in almost every aspect of business. Indeed, it is the most commonly used tool for automated data entry worldwide, and is widely regarded as one of the most important business innovations of the twentieth century.

Bar codes provide a simple method of encoding text information that can be easily read by inexpensive electronic scanners. The code itself consists of a series of adjacent parallel bars of differing widths similarly spaced apart. This pattern of bars and spaces sometimes referred to as the Universal Product Code—represents alphabetic characters or numbers that are the unique identification for a certain product. First utilized in supermarkets and libraries, bar coding identification has grown over the years to have applications in many fields.

Today’s retail businesses use bar codes elements in complicated electronic point-of-sale (POS) systems. These systems enable businesses to capture information about inventory levels on a continuous basis. For example, a seller of health and beauty aids can scan the bar codes on merchandise as it leaves the store and transmit that data via an Electronic Data Interchange (EDI) system to its main suppliers. The supplier can then replenish the store’s inventory automatically. Internally, the retailer can study the point-of-sale data to determine more effective ways of marketing and merchandising its offerings. Manufacturers, meanwhile, utilize bar code technology in work process control, property management, job costing, maintenance, inventory control, and in tracking shipping and receiving activities. In the latter instance, for example, “scanners located at receiving and shipping areas can be used to record product movement,” remarked W. H. Weiss in Supervision. “In addition, captured information at the point of transaction permits invoices to be verified and bills of lading generated that are based on actual quantities shipped. Back orders can be immediately routed to the shipping dock.”

Users tabulate bar code information with reading devices called scanners. “Contact” scanners are handheld devices that must either touch or come into close proximity to the bar code symbol to read it; these scanners are used in situations where bar codes are difficult to get at or are attached to heavy or large items that cannot easily pass across stationary scanners. “Non-contact” readers, by contrast, are usually stationary scanners permanently installed (at checkout counters, etc.) Some handheld scanners may also use non-contact technology. Whatever the choice, a non-contact scanner does not have to come in contact with the bar code in order to register its contents. It uses reflected beams of light to read the bar code.

A small business planning to use bar codes should familiarize itself with the appropriate symbology to be used on its products. A website of the Measurement Equipment Corporation lists more than 230 national and international standards organizations able to assist the would-be user of bar codes depending on the kind of product to be coded. Examples are the Group of Terrestrial Freight Forwarders (GTF), the Chemical Industry Data Exchange (CIDX), and National Hardware Retail Organization (NHRO). Those looking for some general orientation may wish first to visit the Web site of the Uniform Code Council, (renamed GS1 U.S. on June 7, 2005 but still referred to by many as UCC) one of the leading umbrella organizations in bar coding. Part of the preparation is to ensure that the bar codes the business produces meet certain standards of print quality. “Print quality standards state the minimum levels of reflectance, contrast, and other critical measures of printed bar code symbol readability,” explained Weiss. “Information requirements covered by standards vary by industry. A serial number is important for some while a product weight is important for others.”

Today, bar coding technology stands as a ubiquitous part of nearly every industry of any size or economic significance. This state of affairs is unlikely to change any time soon, according to experts. Analysts do note that use of Optical Character Recognition (OCR) technology has grown in the field of document image processing in recent years. But bar coding technology remains superior to OCR in terms of expense, accuracy, and ease of operator use, and its users continue to find new and innovative uses for its still-developing technology.

History

In 1948 Bernard Silver, a graduate student at Drexel Institute of Technology in Philadelphia, Pennsylvania, US overheard the president of the local food chain, Food Fair, asking one of the deans to research a system to automatically read product information during checkout. Silver told his friend Norman Joseph Woodland about the request, and they started working on a variety of systems. Their first working system used ultraviolet ink, but the ink faded too easily and was expensive.

Convinced that the system was workable with further development, Woodland left Drexel, moved into his father’s apartment in Florida, and continued working on the system. His next inspiration came from Morse code, and he formed his first barcode from sand on the beach. “I just extended the dots and dashes downwards and made narrow lines and wide lines out of them.” To read them, he adapted technology from optical soundtracks in movies, using a 500-watt incandescent light bulb shining through the paper onto an RCA935 photomultiplier tube (from a movie projector) on the far side. He later decided that the system would work better if it were printed as a circle instead of a line, allowing it to be scanned in any direction.

On 20 October 1949, Woodland and Silver filed a patent application for “Classifying Apparatus and Method”, in which they described both the linear and bull’s eye printing patterns, as well as the mechanical and electronic systems needed to read the code. The patent was issued on 7 October 1952 as US Patent 2,612,994. In 1951, Woodland moved to IBM and continually tried to interest IBM in developing the system. The company eventually commissioned a report on the idea, which concluded that it was both feasible and interesting, but that processing the resulting information would require equipment that was some time off in the future.

Advantages

Error Prevention

Tracking errors make your inventory less accurate, which ultimately costs more money. Prior to barcodes, employees manually tracked individual items. Manual tracking leads to many human errors. Barcodes can track items with an error rate of about one error for every three million entries. At this rate, barcodes are nearly 10,000 times more accurate than manual entry.

Large Inventory Tracking

Without barcodes, companies that maintain inventories in the hundreds of thousands, or even millions, would have to scale back. They allow you to accurately track large stocks and also look up any single piece of merchandise in a matter of seconds.

Cost Savings

Barcodes save lots of money. Prior to their advent, employees tracked merchandise. It costs more money to employ added workers, and more money and time are spent tracking large quantities of goods. Eliminating excess employees makes companies more efficient and increases the bottom line.

Speed

The speed of a barcode tracking system is beneficial. For inventory purposes, the system’s speed allows tracking to be done quickly. At checkout lines, barcodes can be scanned to immediately identify the cost of goods, so clerks don’t have to type in prices. Customers don’t have to wait longer when someone is purchasing several items. Every time a barcode is scanned, the item is immediately logged within the appropriate inventory.

Electronic article surveillance is a technological method for preventing shoplifting from retail stores, pilferage of books from libraries or removal of properties from office buildings. Special tags are fixed to merchandise or books. These tags are removed or deactivated by the clerks when the item is properly bought or checked out. At the exits of the store, a detection system sounds an alarm or otherwise alerts the staff when it senses active tags. Some stores also have detection systems at the entrance to the restrooms that sound an alarm if someone tries to take unpaid merchandise with them into the restroom. For high-value goods that are to be manipulated by the patrons, wired alarm clips called spider wrap may be used instead of tags.

Surveillance tags that could be attached to items in stores were first invented by Arthur Minasy in 1966. Initially the concept of pilferage becoming a real concern to retailers started in 1964 when a requirement was raised by a retailer in Ohio after he faced pilferage in his store. Thereafter lots of research started happening and today it has reached a stage where visible deterrence have moved on to where a retailer does not even have to install pedestals in a store.

Types of Electronic Article Surveillance

There are several major types of electronic article surveillance systems:

• Electro-Magnetic, also known as magneto-harmonic or Barkhausen effect
• Acousto-magnetic, also known as magnetostrictive
• Radio Frequency (8.2 MHz)
• Microwave
• Video surveillance systems (to some extent)
• Concealed EAS Surveillance Systems

1. Electro-magnetic systems

These tags are made of a strip of amorphous metal (metglas) which has a very low magnetic saturation value. Except for permanent tags, this strip is also lined with a strip of ferromagnetic material with a moderate coercive field (magnetic “hardness”). Detection is achieved by sensing harmonics and sum or difference signals generated by the non-linear magnetic response of the material under a mixture of low-frequency (in the 10 Hz to 1000 Hz range) magnetic fields.

When the ferromagnetic material is magnetized, it biases the amorphous metal strip into saturation, where it no longer produces harmonics. Deactivation of these tags is therefore done with magnetization. Activation requires demagnetization.

The EM systems are suitable for libraries to protect books and media. In the retail segment, unlike AM and RF, EM can protect small or round items and products with foil packaging or metal objects, like cosmetics, baby milk cans, medicines, DIY tools, homeware etc. EM systems can also detect objects placed in foil bags or in metal briefcases.

A further application is the Intellectual property (IP) protection against theft: Security paper with embedded microwires, which is used to detect confidential documents if they are removed from a building.

2. Acousto-magnetic systems

These are similar to magnetic tags in that they are made of two strips: a strip of magnetostrictive, ferromagnetic amorphous metal and a strip of a magnetically semi-hard metallic strip, which is used as a biasing magnet (to increase signal strength) and to allow deactivation. These strips are not bound together but free to oscillate mechanically.

Amorphous metals are used in such systems due to their good magnetoelastic coupling, which implies that they can efficiently convert magnetic energy into mechanical vibrations.

The detectors for such tags emit periodic tonal bursts at about 58 kHz, the same as the resonance frequency of the amorphous strips. This causes the strip to vibrate longitudinally by magnetostriction, and it continues to oscillate after the burst is over. The vibration causes a change in magnetization in the amorphous strip, which induces an AC voltage in the receiver antenna. If this signal meets the required parameters (correct frequency, repetition, etc.), the alarm is activated.

When the semi-hard magnet is magnetized, the tag is activated. The magnetized strip makes the amorphous strip respond much more strongly to the detectors, because the DC magnetic field given off by the strip offsets the magnetic anisotropy within the amorphous metal. The tag can also be deactivated by demagnetizing the strip, making the response small enough so that it will not be detected by the detectors.

AM tags are three dimensional plastic tags, much thicker than electro-magnetic strips and are thus seldom used for books.

Called Emtag by B&G International, this type of tag is often attached to the inside of a plastic surround permanently attached to the power cords of hand tools and equipment.

3. Radio frequency systems

These tags are essentially an LC tank circuit (L for inductor, C for capacitator) that has a resonance peak anywhere from 1.75 MHz to 9.5 MHz. The standard frequency for retail use is 8.2 MHz. Sensing is achieved by sweeping around the resonant frequency and detecting the dip.

Deactivation for 8.2 MHz label tags is typically achieved using a deactivation pad. In the absence of such a device, labels can be rendered inactive by punching a hole, or by covering the circuit with a metallic label, a “detuner”. The deactivation pad functions by partially destroying the capacitor. Though this sounds violent, in reality, both the process and the result are unnoticeable to the naked eye. The deactivator causes a micro short circuit in the label. This is done by submitting the tag to a strong electromagnetic field at the resonant frequency, which induces voltages exceeding the capacitor’s breakdown voltage.

In terms of deactivation, Radio Frequency is the most efficient of the 3 technologies (RF, EM, AM – there are no microwave labels) given that the reliable “remote” deactivation distance can be up to 30 cm (11.8 in). It also benefits the user in terms of running costs, since the RF de-activator only activates to send a pulse when a circuit is present. Both EM and AM deactivation units are on all the time and consume considerably more electricity. The reliability of “remote” deactivation (i.e. non-contact or non-proximity deactivation) capability makes for a fast and efficient throughput at the checkout.

Efficiency is an important factor when choosing an overall EAS solution given that time lost attempting to deactivate labels can be an important drag of cashier productivity as well as customer satisfaction if unwanted alarms are caused by tags that have not been effectively deactivated at the point of sale.

Deactivation of RF labels is also dependent on the size of the label and the power of the deactivation pad (the larger the label, the greater the field it generates for deactivation to take place. For this reason very small labels can cause issues for consistent deactivation). It is common to find RF deactivation built into barcode flat and vertical scanners at the POS in food retail especially in Europe and Asia where RF EAS technology has been the standard for nearly a decade. In apparel retail deactivation usually takes the form of flat pads of approx. 30×30 cm.

4. Microwave systems

These permanent tags are made of a non-linear element (a diode) coupled to one microwave and one electrostatic antenna. At the exit, one antenna emits a low-frequency (about 100 kHz) field, and another one emits a microwave field. The tag acts as a mixer re-emitting a combination of signals from both fields. This modulated signal triggers the alarm. These tags are permanent and somewhat costly. They are mostly used in clothing stores and have practically been withdrawn from use.

5. Video Surveillance

Video surveillance involves the act of observing a scene or scenes and looking for specific behaviors that are improper or that may indicate the emergence or existence of improper behavior.

Common uses of video surveillance include observing the public at the entry to sports events, public transportation (train platforms, airports, etc.), and around the perimeter of secure facilities, especially those that are directly bounded by community spaces.

The video surveillance process includes the identification of areas of concern and the identification of specific cameras or groups of cameras that may be able to view those areas. If it is possible to identify schedules when security trends have occurred or may be likely to occur, that is also helpful to the process. Then, by viewing the selected images at appropriate times, it is possible to determine if improper activity is occurring.

6. Concealed EAS Systems

These new types of systems have caught on lately as there are no visible pedestals or hindrance in the store facade. These systems are installed below the floor and dropped from the ceiling, and can then protect merchandise of retailers from being stolen as the entire range of door is covered. Various studies and researches have been done into making this technology powerful and effective. There are site conditions and other parameters which enable them to be successfully installed but often it has now been noted that malls insist on concealed system as a mandate to increase the shopping experience- for example a part of Dubai Mall in United Arab Emirates do not allow any visible systems. Concealed Systems will be the way to go for the future.

Electronic Shelf Labels (ESL) are digital display systems used to replace traditional paper price tags on store shelves. These labels are typically connected to a central system and can be updated electronically.

Components and Features of ESL:

• Digital Display Tags:

ESLs are digital tags that display product information, pricing, promotions, and other relevant details.

• Communication Infrastructure:

ESLs are connected to a central communication infrastructure, often through a wireless network, allowing for centralized control and updates.

• Centralized Management System:

Retailers use a centralized management system to update and control the information displayed on ESLs across the entire store.

• Dynamic Pricing:

ESLs enable retailers to implement dynamic pricing strategies. Prices can be updated in real-time based on factors such as demand, time of day, or promotions.

• Inventory Management Integration:

ESLs can be integrated with inventory management systems, ensuring that pricing is consistent with stock levels and promotions.

Benefits of Electronic Shelf Labels

In recent years, one of the most interesting changes to hit the industry has been Electronic Shelf Labels (ESLs). These “electronic” versions of price tags use e-ink to display a price and are connected to a computer database. This makes changing in-store prices as easy as typing a new price into the software and clicking “send”.

These price tags have numerous benefits for retailers. But ultimately, the greatest advantages are the ability to engage in real-time dynamic pricing in-store and build an omnichannel experience to enhance customer loyalty.

Interested in learning more about the benefits of these price tags? Here are 5 reasons brick-and-mortar retailers should consider the investment.

• Accurate pricing across channels

The internet has completely transformed how people shop, and it’s not uncommon for consumers to price check an item while they’re standing in a store. Shoppers lose trust in a company if the in-store prices don’t align with the online display, and unfortunately this is often the reality they encounter.

ESLs, however, completely change that interaction. With one standardized pricing system, your customers won’t be disappointed by price differences anymore. Instead, your company can immediately reflect any online price change in-store.

ESLs also allow you to align your promotion prices, audit trails for your headquarter to check changes, and fix any pricing errors. Each of these keeps your prices accurate across the board and ensures your customers see your optimal price.

2. Shelf edge influence

The shelf edge is one of the most important sales influencers. Most purchases are made at this point so you want to make sure your pricing information is accurate.

With paper labels, changing pricing information is prone to human error. It’s also a slow process, and by the time you finish re-labeling, prices might have changed again online.

With ESLs though, these changes are easy, so you can capture more sales at the shelf edge. You can react competitively to price changes, enable instant promotions, track what promotions work, and protect margins on time-sensitive stock. You can even create offers based on where a specific customer is standing in the store with just a few clicks.

• Enhance your omnichannel experience

It’s no secret that omnichannel is the future of retail. According to Planet Retail, 56% of consumers feel that technology improves their shopping experiences.

How do ESLs help you build a successful omnichannel experience? ESLs enable you to interact with your customers in ways that were previously impossible:

• Display stock levels so customers know whether the supply is limited
• Display online prices of competition so consumers can trust you when you say you have the best price
• Enable simple ordering with QR codes
• Display reviews of products, so shoppers can understand what others like or dislike about a product.

• It’s not as expensive as you think

Here’s the thing: ESLs do require an initial investment. And if you’re unsure about whether you will use them, it’s understandable why you might be skeptical of moving forward with the technology.

But with the shelf edge being the last and most powerful point of influence on a sale, the ability to control what a consumer sees at the push of a button is priceless. And the process of installing and configuring the labels isn’t as hard as you think:

• Minimal construction and installation: Electronic shelf labels are easy to install and can be set up with a simple screwdriver. They’re also easy to configure using the provided software
• High security with low maintenance: ESLs operate on an unused WiFi network for maximum security from interference at low maintenance for retailers
• Easy to use: Most ESL softwares are easy to use and learn. Just drag and drop the information you’d like to display and you’re done!

After installation, your employees no longer need to monitor the price tags each day. The centralized system makes it easy for one person to control all pricing changes on the shop floor.

• Payback is quick

According to DisplayData, the payback for ESLs is high. The company reports in-store sales typically increase by 6%, with a typical margin increase of 2%-3%.

The payoff is also fast. One of DisplayData’s customers, a major European retailer with over 800 stores, secured a payback on their investment in just 16 months and predicts over 170% ROI in the next two years. If you zoom out to 5 years, the retailer expects their ROI to increase by 400%.

Creating an innovative omnichannel experience is all about connecting stores and online. And the shelf edge is no exception. Retailers should carefully consider this key moment in the omnichannel buyer’s journey and recognize that electronic shelf labeling is one of the easiest ways to connect the two domains.

Types of ESLs:

• Segment Displays:

Basic displays showing pricing information.

• Dot Matrix Displays:

More advanced displays that can show text, graphics, and additional information.

• E-Ink Displays:

Use electronic ink technology, providing high visibility and low power consumption.

A Customer Database Management System (CDMS) in retailing is a comprehensive software solution that enables retailers to collect, organize, analyze, and utilize customer data for various purposes. It plays a crucial role in building and maintaining customer relationships, personalizing marketing efforts, and enhancing overall customer experience.

A well-implemented Customer Database Management System empowers retailers to create a customer-centric approach, driving customer loyalty, improving operational efficiency, and contributing to overall business success. It serves as a valuable tool for adapting to changing customer preferences and market dynamics.

Components of Customer Database Management System:

Data Collection:

• Customer Profiles:

Create and maintain detailed customer profiles that include demographic information, purchase history, preferences, and contact details.

• Transaction Data:

Capture and store transactional data, including purchase history, order details, and returns.

Data Integration:

• Integration with POS Systems:

Integrate with Point-of-Sale (POS) systems to capture real-time transactional data.

• Integration with E-commerce Platforms:

Connect with online platforms to consolidate data from both in-store and online transactions.

• External Data Sources:

Integrate external data sources, such as social media or third-party demographics, to enrich customer profiles.

Data Storage:

• Secure Database:

Store customer data in a secure and compliant database to ensure the privacy and protection of customer information.

• Scalability:

Design the database to handle the scalability needs of a growing customer base.

Customer Segmentation:

• Segmentation Criteria:

Use segmentation criteria (e.g., demographics, purchasing behavior) to categorize customers into different segments.

• Dynamic Segmentation:

Implement dynamic segmentation that can adapt based on changing customer behaviors.

Personalization:

• Personalized Recommendations:

Utilize customer data to provide personalized product recommendations and offers.

• Personalized Communication:

Customize marketing communication based on customer preferences and behaviors.

Analytics and Reporting:

• Customer Analytics:

Analyze customer data to derive insights into purchasing patterns, trends, and customer lifetime value.

• Reporting Tools:

Provide reporting tools for generating customized reports on customer behavior and campaign performance.

Customer Interaction History:

• Communication History:

Maintain a history of customer interactions, including emails, calls, and in-store interactions.

• Feedback and Reviews:

Capture and store customer feedback and reviews to understand sentiments and improve service.

Marketing Automation Integration:

• Email Campaigns:

Integrate with marketing automation tools to execute targeted email campaigns based on customer segments.

• Promotion Management:

Automate the management of promotions and discounts tailored to specific customer groups.

Customer Loyalty Programs:

• Program Management:

Administer customer loyalty programs by tracking points, rewards, and tier progress.

• Incentives:

Use customer data to design incentives that encourage loyalty and repeat business.

Data Security and Compliance:

• Data Encryption:

Implement encryption protocols to secure sensitive customer information.

• Compliance:

Adhere to data protection regulations and privacy laws to ensure legal compliance.

Functions of Customer Database Management System:

• Customer Acquisition:

Attract new customers through targeted marketing campaigns based on customer profiles and preferences.

• Customer Retention:

Implement strategies to retain existing customers, such as loyalty programs and personalized communication.

• Campaign Management:

Plan, execute, and monitor marketing campaigns by leveraging customer data for segmentation and targeting.

• Customer Service Enhancement:

Provide customer service representatives with access to comprehensive customer profiles to enhance the quality of service.

• Cross-Selling and Upselling:

Identify opportunities for cross-selling and upselling by analyzing customer purchase history and preferences.

• Feedback Management:

Gather and analyze customer feedback to improve products, services, and overall customer satisfaction.

• Customer Journey Mapping:

Understand and map the customer journey based on historical data to optimize touchpoints and interactions.

• Churn Prediction:

Utilize analytics to predict and prevent customer churn by identifying at-risk customers and implementing targeted retention strategies.

• Comprehensive Customer View:

Provide a 360-degree view of each customer by consolidating data from various touchpoints and interactions.

• Real-Time Updates:

Ensure that customer data is updated in real-time to reflect the latest interactions and transactions.

Features of Customer Database Management System:

• Keep Customer Data Current

One of the most critical aspects of managing customer data is ensuring all data remains current. By analyzing outdated data, you’ll be designing a marketing strategy around information that may no longer be relevant, thus inhibiting your marketing campaign. A database management system will make it easier to cleanse your data and keep it organized, so you can minimize the presence of outdated data and act on the most current trends.

• Keep Customer Data Relevant

With data analysis, it’s important to analyze trends within the aggregate data. Yet, none of these trends will remain relevant across your entire consumer base. You need to be able to segment the data into categories, so you can analyze the data of specific customer groups and create marketing campaigns that are more relevant to each unique customer. A database management platform contains a number of tools to improve data analysis, while enabling you to categorize data efficiently. You can group data based on certain marketing targets, like demographics and spending habits, so your ad pitches appeal to customers on a personal level.

• Gain a Deeper Understanding of Your Customers

For a marketing strategy to be effective, you need to be able to see your customer fully. Big data provides all of the information you need on each customer, so you can gain a complete view of individual customers, as well as increase your understanding of the customer base as a whole. By understanding who your target audience is, you can craft more compelling ad pitches, improve customer service, and provide better products and services to customers. Big data management can help you to stay on top of consumer trends, manage and organize big data, and improve data analysis, so you can access a clearer view of your customers.

• Improve Data Cleansing

If you want to have an accurate and up-to-date view of the customer, then routine data cleansing is imperative. Data cleansing allows you to omit any incomplete, incorrect, and outdated data, which can substantially improve data analysis. Database management software helps to manage large quantities of data and makes it easier to stay on top of data cleansing, so you can rid your system of the dirty data that is slowing your analysis down.

Managing your customer data is imperative in order to create highly effective and targeted ad campaigns. Yet, big data is vast and complicated, making it difficult to manage on its own. A database management system allows you to store and manage your data easily and cost-effectively, while accessing tools that improve analysis. This will lead to better customer insights, enabling you to optimize your marketing strategy to produce the greatest number of leads.

Legal aspects in retailing in India encompass a wide range of regulations and laws that govern various facets of the retail industry. Compliance with these legal provisions is crucial for retailers to operate lawfully, protect consumers, ensure fair competition, and maintain the integrity of business transactions.

Retailers in India operate within a complex legal framework that encompasses diverse areas, ranging from consumer protection and intellectual property rights to taxation and environmental compliance. Navigating these legal aspects requires a comprehensive understanding of the regulatory landscape and a commitment to ethical business practices. Adherence to legal norms not only ensures legal compliance but also contributes to the establishment of a trustworthy and responsible retail sector that protects consumers’ rights and fosters fair competition. Retailers must stay informed about evolving regulations and seek legal counsel to navigate the dynamic and challenging legal environment in the Indian retail sector.

Business Registration and Compliance:

• Business Structure:

Retailers must choose an appropriate business structure, such as a sole proprietorship, partnership, private limited company, or limited liability partnership, and register accordingly.

• Shops and Establishment Act:

Compliance with state-specific Shops and Establishment Acts is mandatory, detailing regulations related to working hours, holidays, and employment conditions.

Consumer Protection Laws:

• Consumer Protection Act (CPA), 2019:

This Act establishes the rights and responsibilities of consumers and sets up mechanisms for redressal of consumer grievances. Retailers must ensure fair practices, transparent pricing, and adherence to quality standards.

• Labelling and Packaging:

Compliance with regulations regarding accurate product labelling, including information on ingredients, expiry dates, and nutritional content, is essential.

Contractual Agreements:

• Supplier Contracts:

Retailers must establish clear contractual agreements with suppliers, covering terms of payment, quality standards, delivery schedules, and other relevant terms.

• Franchise Agreements:

For franchised retail models, adherence to the Franchise Agreement and compliance with the Franchise Disclosure Document (FDD) is crucial.

Intellectual Property Rights (IPR):

• Trademark Registration:

Retailers must protect their brand names, logos, and product names by registering trademarks. Infringement of trademarks can lead to legal actions.

• Copyright and Design Protection:

Ensure that product designs and creative content are legally protected through copyright and design registrations.

Employment Laws:

• Shops and Commercial Establishments Acts:

These acts prescribe rules regarding working hours, overtime, leave policies, and other employment-related matters.

• Minimum Wages Act:

Compliance with minimum wage requirements is mandatory to ensure fair compensation for employees.

Taxation:

• Goods and Services Tax (GST):

Retailers must adhere to GST regulations, including proper invoicing, filing returns, and compliance with tax rates applicable to various products.

• Income Tax:

Compliance with income tax regulations for the business and employees is essential.

Competition Law:

• Competition Act, 2002:

Retailers must ensure fair trade practices and avoid anti-competitive behavior. This includes preventing unfair business practices, abuse of dominant market positions, and anti-competitive agreements.

Real Estate Laws:

• Lease Agreements:

Compliance with lease agreements is crucial for retailers renting commercial spaces. Adherence to lease terms, rent payments, and maintenance obligations is essential.

• Municipal and Zoning Laws:

Retailers must comply with municipal and zoning regulations related to store locations, signage, and other aspects of physical establishments.

E-commerce Regulations:

• Consumer Protection (E-commerce) Rules, 2020:

E-commerce platforms must comply with rules related to product information, return policies, and grievance redressal mechanisms.

• Foreign Direct Investment (FDI) Regulations:

Retailers engaged in e-commerce must adhere to FDI regulations governing their business models.

Data Protection and Privacy:

• Personal Data Protection Bill (PDPB):

Once enacted, the PDPB will regulate the collection, processing, and storage of personal data by retailers. Compliance with data protection standards is essential.

Environment and Sustainability:

• Plastic Waste Management Rules:

Compliance with rules related to the use, collection, and disposal of plastic is crucial for retailers.

• Eco-friendly Practices:

Retailers must adopt eco-friendly practices and comply with environmental regulations to minimize their ecological impact.

Food Safety and Standards:

• Food Safety and Standards Authority of India (FSSAI):

Compliance with FSSAI regulations is essential for retailers selling food products. This includes obtaining FSSAI licenses and adhering to food safety standards.