COMPUTERS AND RETAILING
During the last 20 years of the 20th century a quiet revolution took place in many retailing areas. From the customers viewpoint the old mechanical cash register was replaced by modern technology in the form of sophisticated electronic tills (EPOS) which are able to provide receipts itemising purchases, etc. However, the revolution was much more far reaching than this, the recent availability of comparatively cheap computer power and the development of specialised computer assisted retailing equipment has led to the introduction of sophisticated systems which can assist in many of the functions of a retailing organisation. Among areas which can be assisted by computers are:
1) Item Identification and Customer receipts.
2) Stock Control and Re-ordering.
3) Customer Account Maintenance.
4) Warehousing.
5) Credit Card Control.
Some retail organisations have large computer systems which contain all of these functions ( these are called 'Integrated Systems'). Others will implement only one of these functions on a computer (this is called a dedicated system).
1. Item Identification
The traditional price ticket on items is being replaced by a variety of new methods which can assist retailers by providing easy input of sales information.
Among the methods currently being employed are:-
A) Bar-coding
As part of this course you will have the opportunity of using bar- code reading equipment. Bar coding of products has become very common in the retail industry to the extent that international bar- coding standards now exist.
B) Marked-sensing
This technique is similar to the bar coding which you will have used on the course. Just as the bar code is 'read' via a 'wand' into the computer, in this case a magnetic strip is 'read', again by passing a 'wand' over it. The magnetic strip contains information (e.g. a stock item number) which the computer can identify and match with an appropriate price which may then be displayed on the till printed on the customer's receipt together with the item name. At the same time the computer can deduct the item from the current stock level, information which is vital to the stock control system which is also covered on this course.
C) Kimball Tags (Punched Tickets)
Some retail organisations have opted for punched-tickets as an alternative way to input the information to the computer. Here the information is not normally required for the production of the receipt, so no special till equipment is needed. The punched ticket work in the same way as the punched cards and paper tape which you will have seen demonstrated on this course. Small round holes are punched through the tickets. A combination of holes represents a letter or particular number which in turn represents a stock item. These tickets can be 'read' into a computer by a special reading device and the information on them can be used to adjust stock levels or provide sales analysis information. Using kimball tags the computer is able to produce a sales record either by size, style or department very easily. Distribution can then be altered to send the required stock to the which is selling most of a particular item.
D) Item Numbering Systems.
This is perhaps the easiest identification system to introduce. Each stock item price ticket has a code number on it. This code is unique for a particular line. At the check-out this code is entered into the till. The computer will then identify the line from its number and can enter the item name and price on the receipt and use the sales information for stock control etc.
2. Stock-Control and Re-ordering.
As part of this course you will see and use a stock-control system. The computer system is informed about all new stock coming into the organisation. Since the computer is informed of all sales via the till and/or one of the above methods it is an easy matter to deduct the number of items from the current stock level to give a new stock level. If the new stock level is less than a re-order level, which again is held by the computer, then the computer can automatically print out a re-order letter to the supplier. To be able to do this the computer holds the name and address of each supplier together with a number which tells the supplier how many of the item is to be supplied. When the supplier delivers the order, the number of items delivered is added to the amount in stock.
3. Customer Account Maintenance.
Instead of paying by cash many customers these days choose to have accounts, which may be credit accounts, for example, payable monthly. Each account customer is given a unique customer number - the computer knows the customer by this number. When the customer makes a purchase the amount of the purchase is entered into the computer via the till and/or one of the other methods discussed above. At the same time the customer account number is entered. The computer will add the amount of the transaction to the customer's outstanding balance. At the end of the month, or whenever is decided, the customer is sent his statement of account. When the customer pays, the amount of his payment is entered into the computer and is deducted from the customer's balance. If the customer still fails to pay by a certain date the computer will automatically generate a reminder. If the customer still fails to pay then the computer may generate a message for the accounts department, who can then take over the account. Some organisations have extended their system of customer accounts to give their customers 'credit cards'. These may be handled manually by the staff, however, it is also possible that the computer system might be able to 'read' the card and thereby handle the transaction automatically.
4. Warehousing
As mentioned previously, the computer can play a part in a stock control system. However, the computer can also be involved in the various operations which take place in a warehouse. It is obvious that, if a stock control system is being used, when items arrive in the warehouse their arrival must be made known to the computer in order to 'update' the figure which contains the current stock level. The computer can do much more than this however. For example, if the computer knows how many of a particular item is to be held on the shelves in the store and is informed when each item is sold, then it is a simple matter to program it to tell the warehouse staff when the shelf stock falls below a certain level. The shelves can then be refilled before they become empty. Many large organisations use this same principle where they have one large central warehouse serving many branches. Each store served by the warehouse will be connected to the warehouse computer by a telephone line. The computer in the store will send messages down this line to the computer in the warehouse telling the warehouse which items are required. At the warehouse a 'picking list' is produced for each store. The items on this list are collected from the shelves of the warehouse and form a lorry load to be delivered to the store. It is now possible to have completely automated computer controlled warehouses. Here the warehouse is constructed with special equipment which allows the computer to control trolleys which can automatically select items from shelves and deliver them to the loading bay, completely without human contact. These systems are very modern so only very few have been installed to date.
5. Credit Card or Chargecard Control
More and more organisations these days make use of chargecards. This often means that the credit limit must be checked and that there is a risk of fraud. To combat this many retail organisations are beginning to link their computer systems to the computer systems of the credit card companies. Tills are converted to incorporate special readers to read the magnetic strip on the back of the credit card. This strip tells the computer all the information that it needs to identify the customer. The computer can then automatically check the balance outstanding and authorise the transaction. the amount of the transaction will then be added to the customer's account. It is believed that this system will reduce the amount of fraud connected with credit cards - believed to be several million pounds every year.