Information system homework

Running head: IS IN RETAIL MARKET 1

Application of IS in Retail Market

Leonardo Armijo

Schiller International University

10/09/2022

IS IN RETAIL MARKET 2

Abstract

Technology continues to disrupt almost every sector globally, and the retail industry has

not been secure either. Today, information systems are the first thing retailers think of when

looking for techniques they can use to boost the marketing opportunities of their products. As a

result, different information system tools play a central role in transforming customers' shopping

experience, which retailers are improving to meet the needs and demands of the growing customer

base. This paper aims to discuss the usage of information systems in the retail sector in the United

States and how it helps the industry.

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Application of IS in Retail Market

The modern business environment is characterized by a rapidly changing world, customer

demands and preferences. The only businesses that will remain competitive and continue to excel

in such a dynamic environment are those that will try to match their customers' expectations and

needs by embracing innovation. Recently, business success has been linked to the superiority of

the information system that the business employs and the capacity to use these types of information

efficiently. The paper aims to discuss the usage of information systems in the retail sector in the

United States.

Uses of Information Systems in Retailing

The economic landscape of modern retailers continues to attract a lot of challenges pushing

the retailers to invest in research to find the most suitable strategies to remain relevant and

reputable. As refining business models continues to identify the functional multi-channel mix of

brick and mortar, online and the different hybrids, more attention is arising to make these efforts

more efficient and bring consumers closer.

The information system technologies used in retail include image barcodes such as Q.R.

codes, RFID and UPC to identify inventory. An example of a retailer using RFID is Lululemon as

a way of helping their supplies to improve accuracy with more than 80% in monitoring their

inventory more efficiently (Grewal and Roggeveen,2020). Target has also been on the frontline in

implementing RFID in all its stores in 2016, an investment that consumed over a billion RFID tags.

Another information system that is getting used widely in retail is the point of sale technology,

among the first systems to be automated in the retail sector. This system helps retailers to receive

payments from consumers and keep track of sales. Accounting information systems are widely

used in retail to collect, store and process accounting and financial data that decision-makers rely

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on. An example of such an accounting tool is financial statements which the management uses

internally or externally by investors to make investment decisions. Supply chain management is

essential for large retailers in the U.S. to keep track of their revenue flow. This lets suppliers know

when to refill the store shelves and online warehouses. Data mining technology empowers

American retailers to collect diverse information from various locations and sources. This helps

retailers to manage their business operations better. The last tool is the customer relationship

management tool which is essential for American retailers to provide insights that they can use to

understand diverse customers.

How Information Systems Help American Retailers.

Information systems play various roles in helping retailers effectively and efficiently

manage their operations. The first way it helps the retailers is by automating procedures which

enables them to use the technology to cut costs, improve accuracy, allow fast decision-making,

reduce processing time, and speed up the customer service process. A good example is an

electronic point of sale that uses scanning technology to guarantee that retailers will enjoy accurate

prices, eliminate the need to replace its price label with products, and enable employees to check

out faster (Ishfaq et al., 2021). This helps cut down costs considerably. Information system allows

retailers to collect information about their customers and process it for analysis. Retailers can also

promote and create product extensions depending on the purchasing patterns of the different types

of shoppers. With an information system, the organization can collect demographic information of

the customers acquired through the loyalty card database. This provides retailers with information

about specific offers that were made by particular types of customers. As a result, it is easy for the

retailer to dispatch mail-order catalogs to the additional cardholders to raise awareness that the

product they ordered is in stock.

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Information systems help American retailers by providing them with a platform they can

rely on to acquire feedback regarding their marketing decisions. The feedback is gathered through

the point of sale system, which is essential in informing the organization on the impact of its

promotion, new products, prices, and packaging changes. This information empowers the retailers

to evaluate the effect of merchandising stores or layouts in different categories, including

competitor brands, sales, and gross profit realized by the store. The point-of-sales system enables

retailers to evaluate the effectiveness of their promotion efforts, develop plans for their promotion

activities, predict the impact of their newly implemented policies and calculate customer price

responsiveness for their primary and seasonal products. Consequently, an information system

assists retailers in communication with their key stakeholders, including the suppliers, where they

communicate about store replenishment which will be done automatically after the computer

system receives daily POS statistics from each store, and the next day can be approximated. As a

result, lead time is reduced, which is involved in sending and receiving the merchandise.

Information systems provide retailers with tools they can rely on to plan their operations by

providing them with access to computer software packages. This technology enables Americans to

regulate their business, select the best locations to invest in, develop a plan, and budget, and make

a projection of their activities (Schütte, 2017). Information systems provide retailers with

statistical packages for sales projection and data mining tools for extensive data analysis. Also,

information systems provide retailers with geographical information systems that they can use to

gather information about their loyal customers' locations. Lastly, information systems provide

retailers with socio-demographic data, business transaction data, and intelligent analytical tools for

projecting sales from different stores. Information systems also add value to retail transactions as

high levels of accuracy, speed, and convenience make them preferable to customers.

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Importance of Information Systems in the Modern Retail Sector in the U.S.

The importance of information systems in the retail sector is rising drastically, and many retailers

are seeing the need to incorporate it into their operations to maintain a competitive edge over their

competitors. Today, no retailer can be able to envision business operations without an information

system (Mishra et al., 2021). Therefore, it is true that information has gained a lot of importance in

the modern retail environment from a different perspective. The first includes that retailers have

been able to identify new products that they can integrate into their operations to diversify their

operations. With information systems, retailers can analyze independent procedures, such as how

new products will be created, produced, and marketed. Other critical information systems in retail

include information storage, simplifying the decision-making processes by using the actions

recommended by the methods, and identifying scenarios, including sales, costs, and profits, to

identify the most profitable alternatives. Information systems are also crucial in analyzing

consumer behavior change and enable the organization to adjust accordingly.

Future of Information Systems in Retailing

The expectation includes that information technology in the retail sector will continue to

advance and provide more sophisticated software applications that will make it easy for retailers to

communicate with customers on what feels like physical interaction. Personalization is expected to

continue, becoming the chief differentiator for retail brands (Weber and Schütte, 2019). As Omni

channels and connected technologies continue to exist as the bridge between physical and online

shopping, retailers will have the opportunity to personalize their products more than before,

enabling them to stand out and thus attract customers. Research indicates that over 59% of

consumers prefer to purchase products from a retailer that has personalized their brand offers.

Retailers across the United States have been relying on personalized customer care, which they

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provide through loyalty programs and mailing lists. However, information systems will continue to

advance and empower technologies such as artificial intelligence, omnichannel, and computer

vision enabling retailers to acquire a granular perspective of what their consumers want and

prepare the type of products to offer, when, and when to offer accordingly.

Today, customers can receive recommendations and personalized promotions based on their

purchasing. However, the goal for the future is to go an extra step and empower the information

system to enable American retailers that they can be able to offer personalized discounts to

consumers using screens or in-store to initiate deals that are more likely to trigger the customer to

place an offer. This will play an integral role in enabling American retailers to stand out from

competitors depending on standardized procedures to perform consumer outreach and effectively

influence customers to make purchase decisions (Kumar et al., 2018). The pandemic has been a

mind opener that the retail sector needs to advance technology that will allow a contactless buyer

shopping experience. Investing in this effort in the future will ensure that customers can enjoy their

shopping experience and satisfy their need to have a unique customer base.

Another area in which information systems in the retailing sector are expected to advance

is the prediction of demand and accessibility. The pandemic exceedingly introduced challenges for

retailers. This comprised managing the rapidly changing market or products and guaranteeing

product availability was proving difficult in the presence of demand fluctuation. The capacity to

handle the demand for the product is critical in assuring long-term consumer perception. Future

advancement in information systems in this field will ensure that tools such as A.I. will be

empowered to recognize purchase trends and perform an informed analysis making it possible to

predict changes in consumer demand. Currently, the capability to use A.I. to track customers'

purchase behavior and make predictions accordingly has been limited to large-scale retailers. as a

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result, most small retailers in the United States have been locked out. However, future

advancement in this field will ensure that it will become more affordable with the help of computer

vision software. This evolution will ensure that retailers of all sizes can have an equal opportunity

to maximize the potential of their consumers exiting their store pleased and satisfied with the

general shopping experience.

Reference

Grewal, D., & Roggeveen, A. L. (2020). Understanding retail experiences and customer journey

management. Journal of Retailing, 96(1), 3-8.

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Ishfaq, R., Davis‐Sramek, B., & Gibson, B. (2022). Digital supply chains in omnichannel retail: A

conceptual framework. Journal of Business Logistics, 43(2), 169-188.

Kumar, S., Mookerjee, V., & Shubham, A. (2018). Research in operations management and

information systems interface. Production and Operations Management, 27(11), 1893-

1905.

Mishra, R., Singh, R. K., & Koles, B. (2021). Consumer decision‐making in Omnichannel

retailing: Literature review and future research agenda. International Journal of Consumer

Studies, 45(2), 147-174.

Schütte, R. (2017, June). Information systems for retail companies. In International conference on

advanced information systems engineering (pp. 13-25). Springer, Cham.

Weber, F. D., & Schütte, R. (2019). State-of-the-art and adoption of artificial intelligence in

retailing. Digital Policy, Regulation and Governance.