Therefore, the Electronic Data Capturing system is considered to be the best electronic business system to store, capture and to generate reports on customer’s transactions.
Electronic Data Capturing system is a way to raise service standards; the system also includes e-marketing promotional messages. These can be used to contact existing customers with special offers and personalised greetings and occasional souvenirs being sent out helping the retailers to retain loyal customers and to get repeat business from them. Electronic Data Capturing system tracks daily customer feedback to increase revenue by solving any problem or short come overnight. It simplifies the way of data mining which enables to define the questions and tailor the survey to meet business objectives and decision making by managers, the issues are quickly and clearly identified through feedback provided by EDC’s and actions are taken immediately improving revenue. (Sanders, R.2008)
TESCO, a largest supermarket in Europe, offers a loyalty culbcard which stores the customer personal data and their shopping habits. ASDA, a second largest supermarket in Britain uses RedEye Software solution to capture its customers personal details. ASDA is known for low priced items.
Tesco with its clubcard has earned the global admiration demonstrating how the customer data from the clubcard has contributed to effective business process. The information collected by clubcard is now virtually embedded in all process that Tesco carries, discounts, pricing, promotions, store locations and many more.(marketingweek,2008)
ASDA uses the RedEye’s web analytics technology to capture its customer’s personal details. RedEye provides the best quality data so that the managers can take appropriate decisions regarding their marketing, promotions, pricing. The data it collects is a combination of information submitted by the visitors or the first party data collected by the cookie. (redeye)
3.0 EVALUATION OF ELECTRONIC DATA COLLECTION IN EFFECTIVE BUSINESS MANAGEMENT:
Electronic data capturing system, effectively assist the business operations and managerial decision making by combining data collected, sophisticated analytical models and marketing tools, using software’s like DSS(Decision Support Systems),TPS(Transaction Processing System),MIS (Management Information Systems), CRM (Customer Relationship Management) (Laudon & Laudon, 2006. O’Brien,2006)
The following diagram shows how EDS facilitates in processing specific roles, decision making and responsibilities at different levels of management in retail-
Figure 1: Showing application of EDS on different managerial decision making
The customer data which is collected through electronic data capturing machines contributes effectively for the purposes of business management by the retailer on Strategic level, Tactical and Operational.
Strategic -Electronic data capturing system can contribute in several strategic decisions for effective business management as shown in Figure 1,such as opening a new branch after considering and analysing customers preferences and demand. It becomes convenient to understand the spending power of the customers and accordingly the market could be segmented firmly to attract the existing customers and potential customers from different segments in order to enhance the revenue and reach the targeted goals of the retail business.
Moreover, on a strategic level of processing guests data through electronic Data Capturing system the retailers work on accumulated feedback from existing customers and their likes and dislikes to make sure that the suggestion and recommendation of the customers are taken care of ,if needed introduction of new services and facilities are done.(Alter,S. 2002 )
Tactical- An effective business management depends on the tactical decisions taken by an organisation, these decisions could be arrived at only after accumulating detailed knowledge of data as stored in databases generated by transaction processing systems.(O’Brien,2006) The entire customer experience can be evaluated and benchmarked, enabling improvements to be quickly made if necessary. Negative responses can be tagged and the front of house manager immediately alerted to take action. (Keany R.2004)
The decision making here on tactical level includes (shown in Figure: 1) careful assessment of every data available, factors like business forecasting, budgeting, pricing tariffs and customer retention planning done here but every decision making on this level involves critical evaluation of customers transaction records and on the strategies of the marketing department of the retailer to bring business from the existing and potential customers (Sanders R. 2008).
Operational- The customer data contributes to allocate operational or short termed day to day decisions which are inevitable for a successful business management. The reporting operational data can include daily reports per location, weekly server reports and a monthly summary report. The daily activities includes stocking products, staff availability, pricing. Moreover, by taking the help of attractive advertisements and other marketing tools, the products could be sold out to the customers who visit the stores. (Alter, S. 2002)
As per the Business week ‘Best performers 2007’ survey, the winning criteria for any business is better understanding of their customers (dailyrecoking, 2007).
Tesco uses the marketing data specialist Dunnhumby, which analyses the sales data and develops complex marketing strategies and promotional offers. Thus, in recent years, the information of actual buying behaviour of the customer has enabled the Tesco’s management to take most of the key decisions.
Tesco knew that loyalty clubcard not only allows the customers to collect the loyalty points by using it whenever the shopped at Tesco, also allows Tesco to collect customers personal data and their shopping habits.
As many of other retailers launched their own loyalty programmes, Tesco soon realised that just collecting the data does not make any sense. All the success of attracting the customers and retaining them lies in the fact that how they act upon the customer data.
Thus, Tesco is attaining its mission “Creating value for customers, to earn their lifetime loyalty”. (Tesco plc)
On the other hand, ASDA used Every Day Low Price (EDLP) strategy. And it believed that low prices will attract the most customers. Now it has realised, low price cannot attract customers and it has to become more customer focused.
The RedEye technology store level analysis includes information on the availability of deliveries, sales reports and identifies the under-performing stores. The data collected by redeye is also used to analyze the effectiveness of launching new stores, customer data and the transactional data which helps the management to take effective marketing decisions. (redeye)
Garry Lee, Head of Client Services, RedEye says, ASDA using RedEye technology, will be able to drive automated e-mail and banner campaigns, delivering target messages to the customers based on their shopping habits.(redeye)
4.0 Drawbacks
There are a few drawbacks experienced while using and storing data of the customers by retailers-
1.Data Theft:
The customer account consists of personal details and their spending power, thus utilised for repeating business with the help of marketing tools. If such details are misused or comes in the hands of the competitor, the customers could be approached accordingly at competitive rates. So the retailers must keep the data collected safe and secure otherwise they would lose their customers to its rivals.( Alter, S. 2002).
2.Skilled Personnel’s:
The employees must be properly trained of accessing the internet, electronic data capturing system, and other CRM, TPS tools in order to implement business strategies for effective management which is expensive. The EDC comes with a package which includes the data processing, installation, training, software upgrades and maintenance, therefore it is expensive to afford for all retailers.(Sanders,R. 2008)
3. High Dependence:
The data could not be accessed if the server goes down or internet connection is disrupted. The retailers must have back up facilities, in order to protect the information and avoid delays. (O’Brien, 2006)
5.0 RETAILING AND THE INTERNET: ETHICAL ISSUES
5.1 RETAILING ON THE INTERNET
For retailers, the Internet presents new, widely debated and perhaps even over-hyped opportunities (Rowley, 1996; Doherty et al., 1999). For some, it threatens fundamental changes in retailing's role (Alsop, 1999); for others, implications extend far beyond the Web itself (Gurley, 1999).Several examples of major retailers publicising their ‘‘good works’’ and ‘‘good intentions’’ through Web sites were identified in 1997 (Whysall, 1997).
Clearly, though, many retailers see internet as a medium for the promotion of a socially responsible image, they should be aware of internet attacks and criticisms. Nonetheless, the reach, scope, and user profile of the Internet, together with the anonymity of retail cyberspace, create ethical challenges and attract activities that are likely to continue to promote calls to restrict and regulate its content and activity.
Several issues of an ethical nature continue to cast a shadow across the development of e-business, issues which may take on an enhanced significance if, as has been suggested (Donthu and Garcia, 1999), Internet shoppers are less risk averse than non-Internet shoppers. Among these, mention can be made of:
- Customer concerns about the security of Internet transactions. (Fram and Grady, 1997).
- Conversely, retailers need to protect themselves in areas of data integrity, confidentiality, and authenticity of data (Forcht and Wex, 1996).
- Concerns for the apparent lack of a legal framework for e-business (Richards, 1997), especially in an international perspective.
- The use of Internet cookies, whereby visitors to Tesco/ASDA site have electronic data placed on their computers which record the user's e-mail address, which parts of a site were visited, and so forth. While companies may argue that this assists them to understand their customers better, and is thus a step towards better service, for others it represents a threat to individual privacy (McCune, 1999).
- Worries that the ease by which a user may ‘‘subscribe’’ to an offer on the Internet may make it easier for personal details to be collected, and potentially exploited in unwelcome and intrusive ways (Warner, 1999).
- The need for clear distinctions on Web pages between ‘‘editorial’’ content and advertising content (Berry, 1997).
- Concerns that some segments of consumers may be disadvantaged by relatively lower levels of Net access: example rural areas of the USA may suffer from a lack of affordable access to high-speed, or broadband, networks (Lerner, 2000).
- Worries that apparently unbiased Net searches may in fact be dominated by paid advertisers (Wolffe, 1999).
- Matters of intellectual copyright, including the use of ‘‘pirated’’ names of well-known brands and companies like tesco,asda,amazon.com, misspellings of leading brands, and registration of names in foreign domains (Abel, 1998).
- The view that speeds of change in fields like e-business is such that moral reflection is unlikely, and thus standards of corporate morality may be allowed to slip. (Useem, 2000).
- The existence of fraudulent ‘‘Internet offered scams aimed at consumers’’ (Bowe, 2000).
However, it is probably on aspects of privacy that most concern has been focused.
5.2 IMPACT ON THE INDIVIDUAL
Technology is changing the way that individual conduct business. There are benefits, such as shopping at home via internet, but there are also aspects of eBusiness that have less desirable consequences.
This section will discuss two of these issues:
- Reduction of individual privacy
- Decrease of trust in business environment
5.2.1 Privacy
Privacy is an important ethical issue defined as the claim of individuals or group to determine for themselves when, how and what extend information about them is communicated to other. Richard Mason (1986) argued that two forces threaten the individual’s privacy:
- Enhanced capabilities of information technology
- Disseminate information
ASDA’s RedEye and Tesco’s loyalty card gather the information; however ebusiness mainly demands gathering and sharing of these information to increases their business profit. The organizations gather information in different ways:
- Information given by individual
- Information gathered without knowledge of customer
- Information unlawfully gathered about the individuals
Information given by individual
During online shopping, customer provides data such as email address, contact details etc all these data makes the greater expansion of e business possible. Thus the customer data is captured online with the knowledge of customer.
Information gathered without knowledge of customer
Cookies are used to store information regarding user that cannot otherwise be remembered, due to the stateless nature of the internet. For example user name and password of the customer who registered online might be stored in cookies.
5.2.2 TRUST
Trust can be defined as the factor that moderates the use of verifiable attributes to form beliefs about the unverifiable attributes (Donna, 2002). When it comes to online shopping, since communication is through the electronic mail via internet, to fulfil the agreement, a level of transactional trust is required.
5.3 IMPACTS ON ORGANIZATIONS
The e-business revolution is dramatically changing the competitive landscape in which corporation operates, particularly in the area of competition (Fortcht, 1996). Three aspects of the e-business trend impact on retailer’s competitive environment:
- Increased competitors access to current markets
- Increased consumer access to competitor’s product
- Enough resources to compete effectively
Internet ignores the barriers to entry such as geographic, national, and political and cost these results in customer access to a greater number of organization’s competitors. Main competitors of Tesco and ASDA are Sainsbury’s, Lidl, Morrisons, so online business increases competition purely price basis for standard products. The opportunity to compete in e–business exists for those companies that have the necessary resources in this terms, Tesco and ASDA regularly make a note on stock levels and updates the stock for good competition.
5.4 IMPACT ON SOCIETY
The greatest impact of the technology will be true globalization of not only business, but of culture. Technology allows for the almost costless reproduction and distribution of intellectual property that moulds a culture.
6.0 OTHER CHALLENGES
According to O’Brien, there are other challenges which could be faced by the management these are-
Unauthorised Use of Computer at work-The unauthorised use of computer systems and network by the employees of a hotel may kill time and important information can be misused, thus Network monitoring software, called “sniffers”, are frequently used to monitor network and detection of improper use .
Computer Viruses and Worms- Important data and information could be lost if computers and software are affected by Viruses. They often destroy the contents of computer memory, hard disks, and other storage devices. Copy routines in the virus or worm spread the virus and destroy the data and software of many computer users. This could erase out the systematic records of guests data. Thus, the computers used in hotels for storing business information must be protected from such unpredictable virus attack by installing Fire wall and other relevant software which controls the movements of data for a secure and reliable data storage.
7.0 CONCLUSION
In the age of globalisation it is inevitable to adopt electronic business for making a sustainable position in the Global market. The Electronic Data Capture (EDC) System used by Tesco and ASDA helps to extend its business and keep a systematic track of its former customers which not only brings business in future but also attract potential customers. The management maintains such data and adopts various marketing tools to impress the customers by offering various attractive discounts with an urge of have repeat business. Thus, it is clear that EDC plays an important role in retail business, but at the same time, the management has to confront several ethical challenges and if such challenges are ignored the progress of business could be constrained
Many businesses and organizations may simply act on the profit intention, with little consideration of the long-term ethical consequences of their actions. The advance technology made easy for online transactions but hides the impacts of new technology which reflects on the absence of knowledge of social and ethical issues on both customer and business. Hence forth organizations must avoid the vast attraction to rush into a seemingly profitable further without first considering the ethical issues that may be created by e-business technology.
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bibilography
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