EBook-Importance of Technology in Retailing - Assignment Example

EBook-Importance of technology in Retailing Introduction Traditionally, scholars believed in the four pillars of retail business. The 4P’s include the product, promotion, place and price. However, during the early 1980’s, following the then revolution of managerial oversight, the fifth pillar of retail business (people) was introduced; managers, entrepreneurs and the market, as a whole acknowledged the importance of people in the working of retail business (Jha, 2009, pp. 103). The neglect of these three pillars of retail business has led to the failure of many businesses, and the process of checking these different pillars of retail business for functionality and effectiveness can be made easier by technology. In the modern society and in the field of retail business, technology has taken a very significant role in the success of retail ventures (Jha, 2009). These different facets of technology include information systems like inventory control systems, customer record systems and business intelligence tracking (Jha, 2009, pp. 153). Due to the foreseen importance of technology in the working of modern retail business, this paper will explore the impact of technology on global retailing and also explore its impact on retail marketing in the UK. Further, the paper will explore the STP of retail marketing in the UK and also study the field of e-commerce. The Impact of Technology in Global Retail Marketing Advances in technology have led to an overlap in the traditional and the digital channels of retail marketing, which is evident from the dominant role of competitive intelligence and constant monitoring (Motorola Solutions, 2014). The trends that demonstrate the impact of technology in the global retail marketing field include that there has been a huge growth in the collection of customer-centric data. This information is used to offer indicators about the changes in the buying behaviours of customers (Deloitte). In the light of these modern global trends, visionary retailers have employed the technologies that personalize the shopping experiences of their customers; the implementation of these technologies has afforded better information and interconnectedness to customers (Motorola Solutions, 2014). Global Marketing frameworks arising from Digital Transformations (Source: Deloitte) The power of predictive data analytics has continued to offer retailers more access to structured and unstructured data; this change has enabled retailers to develop better insights about consumption trends and the behaviours of shoppers (Siegel, 2013). Forward-looking retailers are using different channels to do their retail marketing. The omnichannel outlook offers retailers, the opportunity to guarantee their customers a consistent, seamless experience at the store, as well as, over the online platform, which is run over mobile devices. Further, the integration of data analytics and collection offers retailers more useful information about the market and their target customers (Siegel, 2013). The retail marketing plans of many retailers have been undergoing reviewed for service and sales maximization. Some of the critical areas include data analysis, dealing with mobile sales, inventory management, reviewing the competitiveness of prices, and these areas of retail marketing are being shaped to resemble those of the market players that have been successful over the technology-driven market (Deloitte). These major players that are viewed as the role models, for the development of technology-driven retail marketing include Google, Amazon, Apple, Face book and EBay; these dominant players have spread ripples across a majority of industries, using the influence of the technology platform (Hauss, 2012). The Impact of Technology in Retail Marketing in the UK According to Verdict & SAS (2013) the online marketing platform will overtake the traditional retailing one in the books sector for 2013; the online retail market was estimated to account for 52.9 percent of the total sales of the sector. The stronger market performers will include online marketers, grocers, and the players in the shopping centre business. These changes were expected to emerge from the competitiveness of the pricing structures offered by the different marketing platforms, as well as, the convenience they offer to the sellers and also the buyers (Verdict & SAS, 2013). Following the growth in the dominance of technology in marketing, technology-based marketing is replacing the traditional system. The retailers to benefit the most, from the increased adoption of technology-based marketing will include Amazon, among the other retailers of video and music products (KPMG, 2014). Changes driving the preference of technology-based platforms over traditional ones in retail marketing Source: (Deloitte) The shift was evident during the second half of 2012, where the older shoppers’ population was among the important groups targeted by the retailers relying on online marketing (Verdict & SAS, 2013). The forecasts were that the shoppers aged 55 and above became the fastest growing target market, which would increase by about 31.9 percent during the years between 2011 and 2016. For example, the boom of the tablet market played an important role in the growth of the m-commerce retail marketing anticipated during 2013; case example included the importance of retailer website optimization (Verdict & SAS, 2013). KPMG (2014) support the significant role of technology in shaping retail marketing, the communication systems used by retailers and the behaviour of shoppers. KPMG attributes the changing face of retail marketing to the tablet and Smartphone boom, as well as the influence of social networking, both of which are shaping the patterns of retail spending. However, KPMG emphasized that retailers need to pay attention to the groups using traditional platforms of buying and shopping, taking note of the fact that different groups may embrace technology-based channels slowly (Verdict & SAS, 2013). For example the common usage of self-scanning technology in UK retail marketing has not been highly welcomed by the older consumer groups. The varied preference with regards to the usage of technology-based platforms in marketing is likely to cause counter currents, despite the fact that it has played an important role in streamlining the marketing efforts of retailers in the UK (KPMG, 2014). The UK’s real estate market has been affected in a similar way by the increased adoption of technology, particularly the technology platforms that foster the uptake of e-commerce (HGI, 2013). The first impact of technology on the retail marketing industry of the UK is that it has changed the outlook of the industry, into one that cannot be explored without referring to the multi-channel outlook of retailing. The multi-channel outlook of retail marketers in the real estate industry has been evidence by the increased support offered to the role of the internet among consumers and retailers (Experian, 2011). Due to the dependence developed between the traditional and the technology-based systems of marketing, it is less clear which of the two extremes will gain the bigger share of the market. The evidence of dependence between the two channels of real estate marketing include that real estate customers expect to get seamless service delivery over the two marketing systems; the system is commonly referred as the Omni-channel outlook of the real estate market (HGI, 2013). The real-life cases of multi-channel shopping in the UK include the order online and collect from the store marketing system, which is commonly referred as click and collect (HGI, 2013). The second multi-channel marketing model is the “visit the physical store and make orders over the i-pad or a kiosk”. The third application of the multi-channel marketing model is that, where the customer will visit the store and do their shopping and enquiries using their mobile phones. Some of the customer behaviours that evidence the multi-channel marketing model include the visits made by customers to the physical stores, while at the same time visiting the websites of other sellers, where they compare prices (Experian, 2011). For that reason, the technology platform offers a better edge to the retail marketers offering differentiated products or distinctively better pricing. It has also become a common practice for customers to visit retail marketing outlets, where they will compare the prices of the products to shop using barcode scanners, which allow them to seek better prices (HGI, 2013). The drivers of technology-based retail marketing, which is called e-commerce as a general field include the consumers, whose choices of quality, prices and convenience are the key considerations made by retail marketers. The convenience offered by technology-based innovations like online shopping is a debatable area, which is supported by some and questioned by others (Aberdeen Group, 2012). The importance of the introduction of technology in retail marketing to the customer include that it saves them the struggle of carrying heavy goods, and also helps them save the time they would consume when visiting physical stores (Experian, 2011). However, some customers have expressed their frustrations at the time wasted at home, as they wait to collect their products; this has introduced another pre-qualification variable for the reliance of online marketers. The new prequalification allows them to build their reputation based on the convenience of their delivery system. This importance is evident from the increased uptake of the click and collect concept by retail marketers, because it offers them more convenience (HGI, 2013). Retail marketers are obligated to respond to the changing needs of customers, which alter the outlook of the multi-channel balance offered. The importance of these changes to the retail marketers include that retailers are able to access a wider market, in many cases a global following and instant customer care over the same platform (Aberdeen Group, 2012). The retail marketers that are successful in making their online ventures scalable have reported a positive impact on sales, following the adoption of technology in their retail marketing (HGI, 2013). The disadvantage that comes with the adoption of technology in retail marketing, particularly the internet include that the costs of distribution and packaging are reducing the profits realized. Due to these inconveniences, UK retail marketers are under the pressure of seeking highly effective e-distribution models (Experian, 2011). However, the increasing attention offered to ecommerce, as well as its revolution are channelling more focus to the fields of logistics and distribution. STP of Retail marketing in the UK The tremendous increase in the usage of the internet, among other technology-based platforms for retail marketing has altered the interaction of businesses and their customers profoundly (Dohehrty and Ellis-Chadwick, 2003). However, the customer-driven marketing of retail marketers in the UK has been a major influence on the rates at which retail marketers adopt e-commerce. The adoption of e-commerce is influenced by the socio-demographic attributes of their target customers, mainly the socio-economic, gender and age profiles. The study of Dohehrty and Ellis-Chadwick (2003) concluded that retail marketers are more likely to use the internet platform for the purposes of communicating with their customers, direct selling and marketing, if their target customers are young, male and of a professional class (Kotler and Armstrong, 2010). During the process of segmenting for retail marketers in the UK, the retailers or the organizations in general explore the market, so as to split the target market into different groups. For example, during a case where the marketing of the products in questions is mainly professional in nature and delivered over the internet, the retailers will group different consumer groups depending on their age, gender, and their career outlook (Hart, Doherty and Ellis-Chadwick, 2000). Some groups like the youths below the age of 18 are less likely to be a target segment, because they do not qualify as targets for professional products (Dohehrty and Ellis-Chadwick, 2003). On the other hand, the older population above 65 is less likely to be engaged in professional business; therefore this group will also be less likely to be the target segment (Louvieris and Driver, 2001). During the targeting stage, taking into account that the products being marketed are professional in nature, UK retail marketers are likely to choose the group which is most likely to consume the professional products. In the case explored earlier, the target will be the young, male professional group, which is more likely to receive the marketing information communicated over the internet, which is also more likely to form the target market for the products (Kotler and Armstrong, 2010). The study of UK organizations done by Dohehrty and Ellis-Chadwick (2003) offered the conclusions that retail marketers picks target segments, based on their marketing objectives and also the systems to be employed during the marketing process. In this case, the retail marketers offering IT or information-related products are more likely to target the young (Louvieris and Driver, 2001). During the process of positioning the products being offered to the target customer segment, the retail marketers in the UK are required to develop an extensive understanding of the expectations of the target groups; their beliefs and the variables that are most relevant to their purchasing behaviour. In the case of the retailers marketing professional products, the relevant expectations and the beliefs of the target group include their preferences and enthusiasm in the role of the internet in the market (Hart, Doherty and Ellis-Chadwick, 2000). The second variable is the nature of their work, where the connectivity offered by the internet is a common belief, indicating that it is the channel that will reach them most effectively (Kotler and Armstrong, 2010). Other variables that feature in the purchasing decision-making of this group include fashion, fun, image and style; marketing must check these different areas, so as to be successful in targeting the given segment (Louvieris and Driver, 2001). E-commerce in the UK and the Role of Technology in Retailing The rapid development of e-commerce in the UK, which was fueled by the uptake of the online platform by British shoppers, has led to the digitization of the economy (Kuchler, 2012). The e-commerce sector contributed a considerable portion to the national GDP, when compared to the case of 20 similar national economies. The growth of the digital economy reached the highs of 10.9 percent every year, which exceeds the average of the 20 countries covered by the comparative study, which stood at 8.1 percent. The best competitor for the e-commerce sector of the UK was that of South Korea and China; the two e-commerce sectors contributed 7.3and 5.5 percent of the GDP respectively. The comparative study concluded that, in the case that the internet was a traditional sector, it would be larger than the education, the construction and the utilities sectors, which are major contributors to the GDP (Kuchler, 2012). During 2010, the internet sector pumped £ 121 billion into the national economy, which marked a contribution of 8.3 percent to the GDP; the sector is expected to increase its contribution to the national economy, to the level of contributing double the 2010 amount by 2016. A review of the retail profile of the UK market showed that about 14 percent of all shopping was made over the online platform (Burn-Callander, 2014). The considerable portion taken by the online platform demonstrates the importance of technology in the growth of the UK economy, which demonstrated the significant role played by e-commerce in the realization of the future prospects of economic development (Kuchler, 2012). The contribution of e-commerce to market activity was higher in the UK, than that of global economies like US and Germany, as well as South Korea, which is the most connected nation in the world. The major areas of market significance, which were reported by customers in the UK included communication, using platforms like email; online investing, search engine utilization and online banking (Burn-Callander, 2014). A report released by Google UK showed that the growth of the UK’s internet sector was highly promising, and that its growth has not been hampered by financial uncertainty witnessed in the past years. The rapid growth of the UK’s e-commerce and internet economy is among the major drivers of the growth of the national economy, which is evident from the thousands of new employment opportunities and the businesses that are developed in the sector over time (Burn-Callander, 2014). The importance of technology, particularly the internet has not been insignificant among the players in the SME industry. The SMEs that used the internet to enhance customer communication and service, sales, and marketing reported growth rates of 16 percent; those that did not utilize technology reported only 4 percent (Kuchler, 2012). Conclusion The four pillars of retail business were complemented by a fifth one during the 1980s, and in the recent years, technology has taken its place as the sixth pillar. The impact of technology on global retail marketing is dominant from the change of marketing strategies, to adopt a customer-driven approach. In the UK, technology has been a major force in shaping the retail marketing industry, and this is evident from the increasing preference of online platforms at the expense of traditional platforms in the book market. STP in retail marketing in the UK has been considerably influenced by the adoption of a customer-driven approach, which is evident from the targeting of the youthful that are highly reachable over technology platforms. E-commerce in the UK is among the major contributors of the national economy, contributing about 8.3 percent of the GDP and the growth of businesses of all sizes. Reference List Aberdeen Group., 2012. Transformation Trend in UK retail and Financial Services: Box technologies Senses an Opportunity. [e-book] Box Technologies. Available at: http://www.boxtechnologies.com/wp-content/uploads/2012/11/Industry-Analysis- FINAL.pdf [Accessed 24 Feb 2014] Burn-Callander, R., 2014. UK e-commerce boasts £720m trade surplus. The Telegraph. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10582782/UK- e-commerce-boasts-720m-trade-surplus.html [Accessed 24 Feb 2014]. 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