I have several essays from my college years sitting around gathering dust. Instead of trashing them, I am editing them and putting them online. The following is one such essay. I wrote this one for a Human-Computer Interaction class around the year 2000.
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Ever since people began using computers for private use, they have been thinking of ways to profit from them. Computerization has forever changed the retail sales industry. These are the commercial businesses that are closest to the customer. They distribute finished products off the shelves and into the customers’ homes. In this essay, we examine the retail sales environment over three stages of computerization: direct replacement of current activity, enhancement of activities, and ability to perform new functionality.
Before the process of computerization began in retail sales, the store manager was in charge of almost all aspects of running the store. It included deciding which items to keep in stock, how much to charge for each item, and managing the employees. For a manager, running a successful store meant hard work and smart thinking. A good manager stayed organized and always had what the customers wanted.
An excellent case study for computerization in retail sales is Wal-Mart. Wal-Mart is a good case study because it is a company that was founded before computers had any impact on sales. The first Wal-Mart store opened in 1962. The company is now the world’s largest retailer thanks in part to computerization. Throughout this essay, we examine how computerization affected the retail sales environment. We look at how it has helped Wal-Mart rise to become the world’s number one retailer.
First Stage
The first businesses began using computers in the 1960s. The first credit cards came into common use during this era. Credit cards reduced the need for carrying large amounts of cash to stores. Some larger businesses even purchased computers to manage customer data and speed up accounting. It was the beginning of the first stage of computer insertion into retail sales.
During this era, there were changes in productivity. Companies used computers to keep up with expenses. Consumers no longer had to wait as long to check out because of new robust cash registers and calculators. Stores did not need as many people to support their customers anymore so that they could cut some jobs.
In the case of Wal-Mart, this was the time when the first stores were opening. Other discount retail stores like Kmart and Target were expanding and searching for ways to operate more efficiently. Retailers began using computers in a limited way for accounting and other minor tasks.
Second Stage
Another phase of computer insertion into the retail sales industry reached its height in the mid-1980s and early 1990s. Computers had become popular and were in everyday use by even small retail stores. During this phase, stores automated many tasks. Almost every store had inventory control computing systems. They kept track of what goods the store had, as well as what items that were out of stock. Barcodes also came into wide use in the 1980s, making retail store checkouts much faster. It was around this time that anti-theft systems became popular in stores. Many retail stores used computer software to take care of accounting and employee payrolls.
Together, these technologies made stores much more efficient. Stores could order and stock goods faster. Employees could check out more customers in less time. And managers had an easier time doing their accounting. All this meant that stores needed fewer employees to operate. It also meant that it was simpler to run larger stores that sold more goods and catered to more customers.
Huge shopping malls and superstores like Wal-Mart could never have existed without the level of computerization that developed by the early 1990s. The primary factor that determined the success of the leading discount retailers was computerization. Wal-Mart won its war with Kmart in the end because it was the fastest to embrace computerization.
By 1993, Wal-Mart was using one of the most sophisticated privately owned computer systems in the world for its inventory tracking. Its computer systems and satellite links automated the entire process for restocking. The system at Wal-Mart stores determined when a product was out of stock and sent orders to the closest suppliers via satellite. This efficiency in inventory control was the main reason that Wal-Mart was able to beat its competitors.
Third Stage
Today we are at the point where new functionality is enhancing the way retailers sell goods to us. For the most part, it was the dot-com boom that paved the way for this new level of computerization. The World Wide Web is emerging as a new method of retail marketing. Local businesses can sell products to anyone with access to the Internet. The Web also provides a place where businesses can advertise their products and provide information all over the world.
With the Internet becoming a vast worldwide marketplace, many businesses are opening new employment positions for technical workers. It takes fewer sales clerks to keep a store operational today. But technicians, programmers, and web developers are now required to maintain the systems. If a system or website goes down, it could prove costly for many companies.
Wal-Mart recognized the growing importance of the Internet by launching its website in 1996. By 2000, Wal-Mart released its online shopping sites to compete with major online retailers like Amazon.com.
Another aspect of retail sales which computerization has affected is data collection. Tracking systems have become popular in retail stores. Many stores have systems which track every item in the store, who purchased the item, and who sold the item.
Inventory tracking systems allow stores to determine precisely how much of each product to send to a store for restocking. They help keep the stores stocked with things that customers want. Customer tracking systems databases of all the store’s customers, their buying habits, and what kinds of products interest them. There are even employee monitoring systems which keep a record of employee actions to gauge productivity.
All these tracking systems are part of a push to personalize the shopping experience in an impersonal and computerized world. Businesses use the computerized tracking and personalization to simulate caring and understanding of the customers that was much more present before the introduction of computers. Only time will tell how much information consumers will allow companies to gather from them before they feel suspicious of the company’s motives.
Conclusions
None of us live entirely independent of others. We all depend on retail sales to live. The computerization of the industry largely affects our everyday lives. Computerization in the retail sales industry takes away the tedious and time-consuming jobs. It allows retail stores to serve more customers in less time. Consumers also benefit from computerization. They have more access to product information and alternatives, so they can make more informed choices about the products they buy. Regardless of whether its impact is good or bad, computerization in retail sales helps our society work in more efficient and cost-effective ways.
References
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Ferguson, Kevin. (1997). Hartco Named Top Reseller. Retrieved October 21, 2001, from http://www.hartco.com/news/release.asp?index=18.
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Lewis, David. (2000). Timeline: An Historical Perspective on the New Consumers. Retrieved October 21, 2001, from http://www.newconsumer.com/Time%20Line.htm.
Seideman, Tony. History of Bar Codes. Retrieved October 21, 2001, from http://www.lascofittings.com/BarCode-EDI/bc-history.htm.
Wal-Mart. (2001). Wal-Mart Stores. Retrieved October 21, 2001, from http://www.walmartstores.com/wmstore/wmstores/Mainnews.jsp.
Walmasda. About Wal-Mart. Retrieved October 21, 2001, from http://www.kamcity.com/walmasda/About.htm.bout.htm.
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