Role of IT in Retail Sector: A Case Study of Tesco

This report discusses the role of IT in the retail sector, with a focus on Tesco. It explores the use of technology in reducing inventory costs, improving customer satisfaction, and analyzing customer data. It also examines the ethical and social issues related to IT in the retail industry. The report further discusses different networking technologies used by retail businesses and the importance of social media in the retail sector.

Assessment

EXECUTIVE SUMMARY
Retail sector is an important sector in the economy of a country which help in providing a
link between manufacturers and customers so that consumer goods and services can be made
available to them which can help in satisfying their demands. The retail sector is facing huge
competition in the market which can be mitigated by the use of IT in the company processes so
that high customer satisfaction can be achieved. This report can help in understanding the role of
IT in retail sector, different technological networks which can be used by companies along with
the ethical and social issues of using IT.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
1.0 INTRODUCTION.....................................................................................................................4
2.0 LITERATURE REVIEW..........................................................................................................4
2.1 Role of IT in the success of retail business...........................................................................4
2.2 Ethical and social issues related to IT...................................................................................5
2.3 Different types of networking technologies used by retail business.....................................5
2.4 Importance of social media in retail business.......................................................................6
2.5 Different stages of system development life cycle...............................................................7
3.0 ANALYSIS OF TESCO............................................................................................................8
3.1 Role of IT in success of Tesco..............................................................................................8
3.2 Ethical and social issues arising as a result of Tesco's use of IT..........................................9
3.3 Types of networking technology used by Tesco...................................................................9
3.4 Importance of social media in Tesco..................................................................................10
3.5 Discussion of findings.........................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

1.0 INTRODUCTION
Retail sector deals in selling consumer goods and services to customers through multiple
channels of distribution so that high profits can be earned. The goods that are sold are not meant
to be further resold by the customers and are usually consumed by them. With the increase in
globalisation the role of IT in retail sector has increased as it helps in collecting and analysing
the customer data with enhancing differentiation, global data synchronization, increasing the
market knowledge etc. which helps the retail business in achieving a competitive advantage in
market. This report is based on the role played by IT in the retail sector with a special focus on
Tesco plc which is a British multinational groceries and general merchandise retailer and has its
headquarters in London, UK. Tesco is the third largest retailer having its outlets in many
countries acros the globe. In this report the issues related to use of IT, different types of
networking technologies which can be used, importance of social media etc. will also be
discussed.
2.0 LITERATURE REVIEW
2.1 Role of IT in the success of retail business
According to Arthur Zaczkiewicz, (2018) the success of retail industry can be hinged by
the strategic use of technology and data. As per the author use of right type of technology along
with making better informed decisions can help the retail businesses to survive the increasing
competition in the market (Retail business hinges with use of technology .2018). The use of
technology in retail business is important as it helps in the following ways: Reduce inventory costs: Technology can be used to monitor and control the stock of
company so that the number of items that are sold and unsold can be monitored. Also the
fast moving goods can be tracked so that a sufficient amount of inventory is maintained
in the stock. Technology can also help in eliminating the goods which have expired or
become outdated so that customers can be provided with high quality items. Improve customer satisfaction: Technology can be used to provide online shopping
platform to customers so that their convenience of shopping can be improved which can
help in highly satisfying the customers. Automate inventory control: Use of technology can help in eliminating over buying or
under buying of required items and stocking them in retail stores. This can help in

maintaining an appropriate amount of stock in the store which can be made available to
customers.
 Customer data can be stored and analysed: Technology can be used to store customer
data and analyse it along with synchronising the global customer data which can help in
tracking the customer buying pattern. This is essential so that strong customer relations
can be maintained which can help in increasing the company sales and improving its
brand image.
2.2 Ethical and social issues related to IT
As per the author Luppicini, R. (2010), technology has raised many concerns related to
ethical and social issues like protection of personal information from being misused, tracking of
the customer data and their usual habits, likes and dislikes through internet, influencing
customers in a negative manner etc. All these issues can also occur when technology is used in
retail sector which can affect the customer buying behaviour and cause losses to retail industry
(Ethical and social issues in IT .2010). Ethical issues arise when decisions made by a business
does not favour the customers or cause harm to them which also affect the business image in the
market. Technology can be misused by a business in various ways like stealing the data of other
companies, negatively impacting the decisions of customers by influencing them to purchase
goods and services which do not produce the claimed value etc. Apart from the ethical issues
there are also some social issues related to use of IT in retail sector like customers find it more
convenient to shop online which affects the retail market and has lead to the shut down of many
retail brands. Also IT has reduced the number of jobs as the human resources are being replaced
by the new techniques which are being used at retail stores. Also the competition has increased
which means that the retail stores are forced to offer their products at lower prices so as to
increase their sales and survive in the market.
2.3 Different types of networking technologies used by retail business
According to Margret Rouse, (2020) networking technologies can help in connecting
many computer systems together so that information can be shared between and better
communication can be established (Networking .2020). Networking comprises of design,
construction and use of network along with maintenance and operation of network infrastructure,
software and policies so that the businesses can utilise it to achieve their goals and objectives.
Some of the network technologies which can be used by retail businesses are:

 Cradlepoint: This technology can be used by retail businesses to develop cloud based
wired and wireless WAN solutions for any network related problems for companies. This
network help in connecting all the computer systems of the retail business so that the
information can be shared on cloud computing. It also help in providing greater network
reliability as it offers greater router hardware.
 Big Switch networks: This technology can help in providing solutions for network
monitoring and network switches which can help in receiving, processing and sharing of
data between other devices.
Apart from using the technologies which can help in connecting and sharing of data so
that retail stores of a company which are located in different countries can make use of the
information so that strong customer relations can be maintained. Also various kinds of
technologies can be used by retailers so that they can become digitised which will help them in
increasing their sales are : Digital marketing: It is the use of internet so that the company can market its products
and services like social media advertising, mobile apps etc. so that customers can be
influenced to buy the company products and services. Artificial intelligence (AI): Retail businesses can use artificial intelligence so that the
customers can get a better shopping experience and they can be kept updated with the
store offers and discounts.
 Cloud services: With the use of cloud computing retailers can cut their costs of software
development and can also process their data at a faster rate. It can be use to check
inventory, details related to shipping and orders etc. hence making the process easy and
accurate.
2.4 Importance of social media in retail business
According to Venkatesan, (2012), social media is being increasingly used by people
nowadays spending most of their time on it. This is an effective media which can be used by
retail businesses so as to influence customers and affect their buying behaviour (Influence of
social media in retail industry .2012). Various sites such as Face Book, Twitter, Instagram etc.
can be used by companies to advertise extensively their products and services on these sites.
Following are the importance of social media in retail industry:

 Direct contact with customers: A direct contact can be established between customers so
that their complaints, queries, enquiries etc. can be quickly addressed. Promotional activities: Social media can be used for marketing and promoting the
company products and services easily so that more number of customers can be attracted
and company sales can be increased. Customer loyalty: Social media can help in establishing a strong brand image of the
company which can increase the customer loyalty and can help in increasing company
profits.
 Understanding market: The customers like and dislike pattern can help in understanding
the needs and wants of customers which can help it in formulating strategies so that
customer attention can be gained.
2.5 Different stages of system development life cycle
According to Motea Alwan, (2015), system development life cycle determine the stages
in development of hardware system or software system or a combination of both so as to meet
the customer expectation (System development life cycle .2015). following are the stages which
are involved in SDLC: Planning: In this the extent of a problem is identified so that required sources can be
determined which can help in dealing with the problem efficiently like resources, cost,
time etc. This stage helps in determining the problems and finding ways in which they
can be solved. Systems analysis and requirements: At this stage the end user's requirements are
identified along with running a feasibility testy so that it's economic, technological and
social feasibility can be determined. Systems design: At this stage a design of system is defined, the components, security
level, different interfaces etc. are designed so that the developed system is able to fulfil
the requirements of customers in an efficient manner. Development: At this stage the actual code is written for software system and in case of
hardware the configuration and fine-tuning is started so as to meet the requirements and
functions.

 Integration & testing: At this stage different components and subsystems are brought
together so that a well integrated system is established. After this testing of the system is
done so that customer satisfaction can be achieved. Implementation: The system so developed is fully implemented so that desired results
can be obtained.
 Operations & maintenance: Maintenance of system is done so that performance can be
boosted, new capabilities can be added and new requirements can be met.
3.0 ANALYSIS OF TESCO
3.1 Role of IT in success of Tesco
As Tesco is the biggest supermarket retailers, for that they use information technology
tools and technique for management purpose. Some of these are as follows as: Provide information: Information is related to the both employee and the company as
well. Where Tesco get information about their employee work that how much efficiently
they perform their task, the confirmation of working hour of an employee. Tesco also get
all its financial reports for decision making. Also helpful to analyse customer feedback
which help in price distribution (Balaji and Roy, 2017). Implementation of strategy: Tesco made their strategy after knowing the feedback of
customer's, need and demand of product which is provided by the IT. Strategy always
changes according to the need and requirement and that information is provided by IT.
Thus it is used to implement the strategy. Customer relationship management: To manage the relationship between the company
and customer is important for Tesco. It is required to solve the customer's issues and
focused on their need and wants which builds the healthy relationship. To manage the
relationship of two IT provides a platform where company and employee can directly
contact to each other.
 Communication: Communication is the most important factor between the employee and
the customer as well. It builds the spirit between the employee if they easily contact to
each other and that shows the effective result in Tesco. Thus Tesco believes that
communication is needed because it clears the differences. And one gets the direct
feedback which is helpful in terms of performance.

3.2 Ethical and social issues arising as a result of Tesco's use of IT
Ethical issues arises as a result of Tesco's use of IT are as follows as: Privacy: People share their personal information as name, address, number, email id, etc.
And it is need to be safe and secure and doesn't to any other party. Digitalisation: Through this all the information will be easily circulated and it cause an
ethical and legal issues. By sharing, copying the contexting makes it even more ethical. Gathered data: As costumers were always change but there data's are safe, thus whether
the customer is with the company or not their data must be safe and secured (Castaldo
and et. al., 2016). Control: Tesco controls the factor which is related to their employee information like
which web sites they are searching, address their email but when it comes to customer
their data can't be checked unnecessary or only relevant data is circulated.
 Security: Hacking of websites, crimes these are the negative effects of IT. So for that the
individual data is being confidential and only used for company purpose rather then other
personal purpose of employee.
Social issues arising as a result Tesco's use of IT:
Employment will be decreased by maximum use of technology. As technology reduced
the man workforce. Some people doesn't use advanced technology by which they are not able to
learn or know the things, as they are traditional and doesn't believe in advanced technologies.
3.3 Types of networking technology used by Tesco
Tesco uses a variety of networking technology so that it can share data and information
between all its branches and save the vast customer data securely so that strong customer
relations can be maintained along with increased customer loyalty. Following are the ways in
which Tesco uses technology to achieve its objectives: RFID: Radio frequency identification uses electromagnetic fields to identify and track
tags attached to objects so that their stock counting can be done and their details can be
easily known by scanning the codes (Lai, Lui and Tsang, 2016). Connected devices: This can help the customers to connect various apps to Tesco's app
which can help in automating their shopping experience. This also help in tracking their
shopping patterns and exploring more potential customers so that customer base can be
increased.

 Maximising mobile's potential: It means that Tesco is making its online apps more
customer friendly by making the way in which people shop more easy. This involves
expanding the variety of goods and services which are offered to customers along with
making the shopping experience more attractive.
 Mobile payments: The mobile payments is being made easier for customers of Tesco so
that they can easily shop for the items online and can be more attracted towards
purchasing from the company.
3.4 Importance of social media in Tesco
Social media plays an important role in the success of Tesco as it can promote its
products on the social media easily and can reach to a large number of customers through each
social media site. The social media can be used by Tesco to make loyal customers by tracking
their patterns of searches on search engines so that they can be offered with the products which
are majorly liked by customers. This help in building strong relations with customers which can
help in increasing the sales of company (Lueg, Pedersen and Clemmensen, 2015). Social media
can also be used to reach to a large number of customers all across the globe which makes this
method less costly to promote the company's products. Also the offers of company can be easily
made available to customers so that they can shop online which enhances the customer
experience and also increases customer satisfaction.
3.5 Discussion of findings
From the above discussions it can be found that IT plays an important role in the
globalised and competitive market where all the businesses are trying to exist sustainably in the
market. The companies can use information technology in an efficient manner along with the use
of appropriate system so that they can become more modernised so as to reach to a large
customer base which can help in increasing its presence in the market. Also the use of social
media and other internet applications can help in increasing the convenience of customer to make
purchases and also gives competitive edge to the company.

CONCLUSION
From the above report it can be concluded that information technology needs to be
installed in the retail business it provides a lot of opportunities to the business to grow in the
market. Also it help in dealing with the competition in market and make loyal customer base so
that company sales can increase. Tesco is able to increase its global presence by the efficient use
of IT which has helped it to increase the customer satisfaction by providing them with the goods
and services they want and at prices which create value for them.

REFERENCES
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Lueg, R., Pedersen, M.M. and Clemmensen, S.N., 2015. The role of corporate sustainability in a
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