Chapter 8

Information Gathering and Processing

in Retailing

RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
9th Edition

BERMAN EVANS
 Chapter Objectives
 To discuss how information flows in a
retail distribution channel
 To show why retailers should avoid
strategies based on inadequate
information
 To look at the retail information system,
its components, and recent advances
 To describe the marketing research
process

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 Figure 8.1 How Information Flows
in a Retail Distribution Channel

Information Information Information

and the and the and the
Supplier Retailer Consumer

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 Suppliers Need To Know
From the Retailer From the Customer
 Estimates of  Attitudes toward
category sales styles and models
 Inventory turnover  Extent of brand
rates loyalty
 Feedback on  Willingness to pay a
competitors premium for superior
 Level of customer quality
returns

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 Retailers Need To Know
From the Supplier From the Customer
 Advance notice of  Why people shop
new models and there
model changes  What they like and
 Training materials dislike
 Sales forecasts  Where else people
 Justifications for shop
price changes

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 Consumers Need To Know
From the Supplier From the Retailer
 Assembly and  Where specific
operating merchandise is
instructions stocked in the store
 Extent of warranty  Methods of payment
coverage acceptable
 Where to send a  Rain check and other
complaint policies

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 Retail Information System (RIS)

 Anticipates the information needs of

retail managers
 Collects, organizes, and stores relevant
data on a continuous basis
 Directs the flow of information to the
proper decision makers

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 Figure 8.2 A Retail Information
System

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 Figure 8.3 Retail Pro Management
Information Software

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 Database Management
 A major element in an RIS
 System gathers, integrates, applies, and
stores information in related subject areas
 Used for
– Frequent shopper programs
– Customer analysis
– Promotion evaluation
– Inventory planning
– Trading area analysis

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 Five Steps to Approaching
Database Management
 Plan the particular database and its
components and determine information needs
 Acquire the necessary information
 Retain the information in a usable and
accessible format
 Update the database regularly to reflect
changing demographics, recent purchases,
etc.
 Analyze the database to determine strengths
and weaknesses

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 Figure 8.4 Retail Database
Management in Action

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 Figure 8.5 Data Warehousing

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 Components of a Data
Warehouse
 Physical storage location for data – the
warehouse
 Software to copy original databases and
transfer them to warehouse
 Interactive software to allow processing of
inquiries
 A directory for the categories of information
kept in the warehouse

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 Data Mining and Micromarketing

 Data mining is the in-depth analysis of

information to gain specific insights about
customers, product categories, vendors, and
so forth
 Micromarketing is an application of data
mining, whereby retailers use differentiated
marketing and develop focused retail
strategy mixes for specific customer
segments

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 Figure 8.6 Applying UPC Technology
to Gain Better Information

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 Figure 8.7 The Marketing
Research Process

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 The collection and
analysis of
information relating to Marketing
specific issues or
problems facing a
Research
retailer in
Retailing

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 Secondary Data
Advantages Disadvantages
 Inexpensive  May not suit current
 Fast study
 Several sources  May be incomplete
and perspectives  May be dated
 Generally credible  May not be accurate
 Provides or credible
background  May suffer from poor
information data collection
techniques

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 Secondary Data Sources
Internal External
 Sales reports  Databases
 Billing reports – ABI/Inform, Business
Periodicals Index,
 Inventory records etc.
 Performance reports  Government
– U.S. Census of Retail
Trade
– Statistical Abstract of
the U.S.
– Public records

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 Figure 8.8 Internal Secondary
Data

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 Primary Data
Advantages Disadvantages
 Collected for  May be more
specific purpose expensive
 Current  Tends to be more
 Relevant time consuming
 Known and  Information may not
controlled source be acquirable
 Limited perspectives

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 Primary Decisions
• In-house or outsource?
• Sampling method?
– Probability
– Nonprobability
• Data collection method?
– Survey
– Observation
– Experiment
– Simulation

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 Survey Methods
 In-person  Disguised
 Over the telephone  Non-disguised
 By mail
 Online

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 Figure 8.9 A Semantic Differential
for Two Furniture Stores

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 Mystery Shoppers
 Retailers hire people to pose as
customers and observe operations
from sales presentations to how
well displays are maintained to
service calls

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 Figure 8.10 Visionary Shopper

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 Figure 8.10b Visionary Shopper

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