Read the "Retailing" topic article (page 174 of the textbook), and research online any related and relevant material related to the topic. You can use the questions at the end of the article as a guide to develop your discussion.

Retailing

You can make many online purchases to benefit from greater convenience or lower prices, but you will likely set foot in a brick-and-mortar retail store at least occasionally, and you may have noticed some technology-induced changes. A few decades ago, large retail chains began introducing computerized point-of-sale inventory systems consisting of payment computers and an inventory control system. A simple barcode scan captures a sale, and the item is automatically deducted from the store's inventory, allowing real-time tracking of purchases so the retailer knows when to reorder the merchandise or replenish the shelves. In addition to a faster payment process, these systems help reduce shortages, increasing customer satisfaction. In many grocery stores, this system has taken a step further, allowing customers to perform the payment process themselves, saving time and labor costs. In Switzerland, grocery retailer Migros introduced a system that allows customers to scan items as they are placed in the shopping cart. At the payment counter, all the customers must do is use a credit card.

In the near future, many items may be equipped with radio frequency identification (RFID) tags (see Chapter 8), eliminating the need to scan each individual item, so that the total price of a cart full of merchandise can be calculated in a second, saving even more time and adding convenience for the customer. Imagine the time you will save when all you have to do is pass with your cart through an RFID reader and swipe or touch your credit card. Amazon Go stores have taken this concept even further, using technologies such as radar and computer vision to detect if a customer takes an item off the shelf, eliminating the need to use RFID tags. All a customer has to do is touch a credit card to enter the store; once they have finished shopping, the customer can leave the store and continue with life.

Payment systems are also changing rapidly, driven in part by the adoption of more secure multi-factor authorization payments (e.g., your card, phone, code, signature, fingerprint or face), "chip" technology, and contactless payment systems. NFC-based payments have been widely implemented with mobile phones and use a technology called near-field communication (NFC, similar to Bluetooth). The customer's mobile phone communicates with the retailer's payment terminal, and the payment amount is automatically charged to the stored payment method of your choice (e.g., bank account, debit card, credit card). All major smartphone manufacturers such as Apple, Google, LG, Motorola and Samsung actively support this new technology by integrating appropriate hardware into new phones and including mobile payment software.

In addition, many brick-and-mortar retailers have had to respond to the phenomenon of showrooming, in which, as discussed above, customers examine the products in person in a store and then go to order the same product online for less. Retailers invest billions to build and maintain their storefronts, and online retailers can often undermine the prices of physical stores; when a customer takes advantage of this, the brick-and-mortar retailer cannot recover the cost of the store. However, some retailers like Best Buy and Target are embracing this trend by encouraging consumers to browse their shelves and compare prices online. By providing benefits such as superior and personal customer service and instituting price matching policies, these retailers avoid losing customers due to price while profiting by selling additional products. Other exciting new technologies in the store include smart testers that use augmented reality technology to show how an item would look when used or suggest complementary items. Finally, retail stores are increasingly using Bluetooth-enabled sales beacons to provide customers with real-time promotional offers. As you can see, information systems have had a huge impact on retail, and many more changes have not yet reached the shelves.

1. How can technology help brick and mortar retailers compete against electronic retailers?

2. Privacy advocates criticise the use of RFID as it allows better tracking of shopping habits. How can brick and mortar retailers alleviate these concerns?

3. As you have read, some of the "human element" in retail is being replaced by technology. How can physical stores avoid becoming too "sterile" when they use information systems to compete against electronic retailers?