Chapter 8

Information
Gathering and
Processing in
RETAIL
Retailing MANAGEMENT:
A STRATEGIC
APPROACH,
10th 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
 Level of customer superior 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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 Data-Base Management

 System gathers, integrates, applies, and stores

information in related subject areas
 Its a major element in an RIS
 Customer, vendor, product category data base
 Used for
– Frequent shopper programs
– Customer analysis
– Promotion evaluation
– Inventory planning
– Trading area analysis

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 Five Steps to Approaching Data-
Base Management
 Plan the particular data base and its components and
determine information needs
 Acquire the necessary information
 Retain the information in a usable and accessible
format
 Update the data base regularly to reflect changing
demographics, recent purchases, etc.
 Analyze the data base to determine strengths and
weaknesses
 E.g. By customer; purchase frequency, items bought,
average purchase

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 Figure 8-4: Retail Data-Base Management
in Action

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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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 Marketing Research
in Retailing

The collection and analysis of

information relating to specific
issues or problems facing a retailer

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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 collection techniques

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 Secondary Data Sources

Internal External
 Sales reports  Government
 Billing reports – Retail Trade
– Statistical Abstract
 Inventory of the
records – Public records
 Performance
reports

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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

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

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 Survey Methods

In-person
Over the telephone
By mail
Online

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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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