Information Technology Impact on Retail Business: An Analysis

This report delves into the significant impact of information technology (IT) on the retail business, using Tesco as a case study. It begins by classifying computers used in retail, including mainframe, microcomputers, and digital computers, providing examples like the IBM Es000 series, desktops, and laptops. The report then explores IT's advantages, such as automation of processes, data collection for customer insights, feedback on marketing decisions, and enhanced communication. It also addresses the challenges of IT implementation, including the costs and the need for skilled staff. Furthermore, it discusses the ethical and social issues associated with IT, like data privacy, and analyzes the growth and impact of the internet on business opportunities. The report concludes that IT plays a crucial role in modern retail, driving efficiency, customer engagement, and business growth, while also posing ethical and operational challenges that businesses must address.

Introduction to Information Technology

Abstract
The report is about the impact of the information technology in the retail business. To
analyse this classification of computer is done and what makes them more suitable for using
in the business. It is concluded that the mainframe computers, microcomputers and the digital
computers are best suited for the business due to their processing and functioning. Particular
examples of each computer are the IBM Es000 series, desktop and laptops. The impact on the
business by the information technology is wide and it is involved in many steps. The
information technology is used in the automation process, for collecting the customer data for
changing according to the needs and communication. The business is also affected by the
ethical and social issue as the personal privacy is a big problem when working with the
internet. The growth of the company is also impacted by these issues. The growth and the
development of the internet have impacted the business significantly. The internet has
brought many opportunities for the advancement in the ways of doing the business. The
businesses are able to provide the customers with a wide variety of options from worldwide
that was not possible without the internet.

Table of contents
INTODUCTION........................................................................................................................4
LITERATURE REVIEW...........................................................................................................4
ANALYSIS AND DISCUSSION..............................................................................................4
Classification of computers........................................................................................................4
Impact of IT in retail business with advantages and challenges................................................6
Ethical and social issues.............................................................................................................8
Identify and discuss the growth and impact of Internet on businesses......................................9
CONCLUSION........................................................................................................................10
REFRENCES...........................................................................................................................10

INTODUCTION
The report is about the impact of the information technology on the retail business.
The chosen retail business organisation is Tesco. It is a British multinational retailer
organisation. It is headquartered in Welwyn Garden City, England, UK. The company sells
the groceries and merchandise. The classification of the computers is done that are used in the
business and providing examples of each type of computer. The impact of the information
technology in the retail business is discussed considering the advantages and challenges of
the IT in business. The ethical and the social issues are discussed with their impact on the
business. The impact of the internet on the business is discussed.
LITERATURE REVIEW
According to Zhang, 2021,the categories of computers for the business purpose are
the super computers and the mainframe computers. The super computers are very powerful
and expensive, these are meant for the large scale functioning. The mainframe computers that
are in used from the 1950s can store large amount of data into them. The computer is capable
of processing the bulk transactions or the multi-site stores. The computer can handle
hundreds of user at the same time.
Kalogiannidis and Mavratzas, 2020, states that the today’s retail businesses are
expected to have speed, efficiency and agility. For achieving this, the retailer needs to invest
in the information technology for controlling the system, central database and for the
atomization of the statistical forecasting system.
As stated by Nash, 2019, for the evaluation of the success of the business, ethical
issues are the important aspect. The ethical issues have a positive impact on the long term
growth of the retail business.
Bale says that the impact of the internet on the business has shown positive results.
The use of internet has enabled the business, small scale business owners companies and
entrepreneurs to identify new opportunities and growth in the different locations.

ANALYSIS AND DISCUSSION
Classification of computers
The computers used in the retailing companies are classified on the basis of the size,
purpose and type. All the computers present are different from each other. These days there
are many classes of computers present. The computer varies in the functionality, data
processing and the output results. The size, characteristics, techniques and data handling of
the computers are also different.
On the basis of size capacity and size the computers are divided into mainframe,
micro and supercomputers. On the basis of purpose the computers are divided into special
and general purpose computers (Marchet and et.al, 2018). On the basis of type and hardware
design and type the computers are classified as analog, hybrid and digital computers.
The computers that are used in the business are:
Mainframe computer
These computers are able to handle the workload and can deal with hundred and
above uses at a time. They are capable of doing this as they are high performance, multi-
programming and multi-user computers. The computers have enormous storage capacity
along with the data processing of high speed. The computer is able to handle hundreds of
input and output devices at a time. Mainframe computers are have the capability to
simultaneously solving complex calculations as well as continuously working for long hours
that makes the computers highly efficient to use. The computer is able to operate the data at
very high speed and performance due to the presence of the many microprocessors that
enables the computer with that ability.
In almost every metric the mainframe computer is at the head of the conventional
modern personal computers. The continuity of the operation in the mainframe computers is
ensured by the replacement of the “hot”. The total power is exceeded by 85% by utilization
of the standard amount of the processor. The mainframe computers can be considered more
powerful than the supercomputers because of the handling ability of supporting many
processes simultaneously (Kaisler, 2020). The super computers can run a single program

faster than the mainframe. Development in mainframe computers over the years has
increased the reliability. Hardware and software bugs can be fixed by these computers.
The mainframe computers are used by the companies, departmental and commercial
organisations. The computers are able to work for twenty-four hours and hundreds of
employees can simultaneously work on this. The computers are used for completing the task
like keeping the details of the advertisement, notices, paying employees, payments, research
centres, maintaining the details of users on the purchases, ticket booking and keeping the tax
details.
Example of these computers is IBM Es000 series.
Micro computer
The most common micro computers are the ones that are being used at the homes.
The people can personally use the computers at low cost and reasonable price after the
invention of the microprocessors in 1970 which is called the Digital Personal Computer. The
micro computers are designed as minimal storage capacity and size. The personal digital
computer has many parts like software, networks, operating systems, input and output
devices, and servers.
The computers can be used in any work area and even for personal use at home.
Everyday task and needs of the individuals are processed and kept in the microcomputers as
it is the primary purpose of the computer. The computer only allows single person to work at
a time but the operating system of the computer is multitasking. The user experience can be
improved by connecting the computer to the internet and having the benefits.
The demand for microcomputers have increased due to the development of small
equipment, multimedia, optimised consumption of energy and LAN. The computer went
through a tremendous development in the related parts due to the increased demand and need.
The microcomputers use in the fields like office, business, education, publishing,
entertainment, home and data collection. For small businesses the computers keeps the details
and prepares letter of correspondence (El-Behiry, Ahmed and Mahmoud, 2019). For large
businesses it creates bills, word processing, accounting and operation of filling systems.
The example of the microcomputer includes PC, laptop, Tablet, smartphones, server,
palmtop, PDA and workstation. The major manufacturers are IBM, Apple, HP and HCL.

Digital computer
The letters, special symbols and numerical values are represented in the digital
computer. For processing the data in the computer it calculates the number. They are fast
speed and use the electric signs to run. Binary numerical system of 0 or 1 is used for the
calculation. The computer is capable of performing the operations like subtraction, addition,
addition, occurrence, multiplication, division and all the logical mathematical operations.
Digital computers are the most common form due to the fact that they use the discrete
signals for the operation purpose instead of the continuous electric signals that makes them
versatile, powerful and speed efficient (Mano, 2017).
Examples are desktop and laptops.
Different computers are used by Tesco for different purposes in different areas.
Impact of IT in retail business with advantages and challenges
The spent on the information technology has increased significantly due the increased
globalization of the retailing business through the point of supply and the point of scale. The
management of complex retail operations are handled by the information technology (IT)
making it and important part of the retailing business. The key of obtaining the advantage in
the retail sector is by getting the market knowledge along with having control on the data and
information.
The advantages of IT in the retail business are:
Automating processes
The retailers are getting many advantages by the automating process. At Tesco the
automating process helps in increasing the accuracy, helps in making quick decisions, speeds
the customer service and reduce the cost and the processing time. The company uses the
EPOS (electronic point of sales) for scanning systems. This helps in ensuring accurate prices
and allows the checkout workers to work faster. The need to fix price labels to the goods is
eliminated by this. This helps the company in reducing the cost at considerable rate.
Collecting data about the customers

Purchase details of the customers are collected and analysed by Tesco. This helps the
company to decide the products promotion and extension on the basis of the purchasing
patterns of different customers. The loyalty card data base gives the demographic information
about the customers. The loyalty card entries are related to the data of transactions furnished
by EPOS. The customer base profile is made by using this data. This helps in facilitating
special offer to specific customers ((Ramanathan and et.al, 2017).). The online sites of Tesco
use the previous information of transaction to customise the site for the customer by
providing them options of the items that are related to the previous shopping.
Feedback on marketing decision
The effect of the prices, promotions, changes in packaging and the new products are
known by the analysis of EPOS. In Tesco, the retailers are able to assess the impact of the
layout or the merchandising changes of the store in terms of competitor brands, category
sales, sales and the gross profit of the sales. The analysis of EPOS helps the company with:
Evaluation of promotion, calculation of customer’s response on the price of seasonal and core
products and planning the measure for promotion.
Communication
Tesco uses the electronic commerce for effective communication. It is used to send
the documents related to the stock, purchase and sales information to the third party over the
communication networks. This method helps the company to save the cost and work fast. The
EPOS data at the store computers are transmitted to the head office of Tesco on daily basis
for the, this helps the manger to assess the performance of every product group and store.
Lead time is reduced by the effective communication. The time taken in sending the order
and receiving the merchandise is called the lead time.
Adding value to the retail transaction
IT assisted transactions are preferred more by the customers in comparison to the
traditional retailing. This is because IT transaction provides the customers with accuracy,
speed and convenience.
Challenges of IT in the retailing business:

 IT in the retailing business is used for the pay roll, finance and management accounts.
Retailing is much dispersed business and the company have to invest an enormous
amount for the installation of the IT equipment.
 Tesco sells a wide range of products and requires a complex system to handle the
large number of product lines.
 The computer knowledge of the staff is limited hence the computer specialists are
needed to be employed for dealing with the process of automation (Warnaby and Shi,
2019). Tesco is a large retail business and hence is able to afford technically qualified
people.
 The routine investment of the automation process involves very high cost.
 The failure of IT projects and the risk of such failure in the retailing business cost
very much.
 Tesco invest and concentrate on the operational improvement more than the
transformational improvements because the payoff from the IT is nor recognised
fully. So the company is investing a small part on the IT budgets.
 The performance advantage in the retail business is not produced only by IT.
 Longer time is required to take the full advantage of the IT. Heavy investment and
taking lessons from the experience make the IT based stocks to replenish the systems.
Ethical and social issues
There are several ethical and social issues which occur in IT. These issues led to
disruption in IT and also create a negative impact on organisation image. Therefore, it is
necessary to find out those issues so that accordingly action and strategy is developed (Belk,
2020). Thus, making use of technology is not an easy task as there are several ethical and
social issues occurred. One of the main ethical and social issues while making use of IT is
personal privacy. For accessing services, people and employees have to facilitate their own,
hardware, software and operating tools. Big retailers have to distribute networks on a large
scale. This transfer of data in big amount can lead to the hidden chances of disclosing
information and violating the privacy of any individuals. There are huge chances of loss of
personal as well as professional data and it may create several other problems. It has been
argued by (Samuel, and Buchanan, 2020) that according to them piracy is one of the main
ethical and social issue that is associated with technology. It is an activity in which creation
of illegal copy of software is being made. There are several laws have been made for

copyright protection and legislation can also protect people from unauthorized duplication of
software. This piracy is increasing day by day, courts are also trying to deal with this problem
and they are trying to consider problems of protection of software. So, overall it can be said
that there are several problems are associated with technology.
Apart from that, there are some other issues have also being identified and in regards to
issues it is found that patent and copyright are main ethical issues that are associated to IT to
the great extent. Patent is mainly used for protecting unique ideas and secret aspects. As
compared to obtaining copyright, obtaining patent is quite difficult because it is important for
patent holder to provide detailed information or full details of program to proficient
programmer for building a programme. But there are some legislations and laws that have
been made related to copyright and patent and these laws work as a power tool in protecting
computer software.
Hence, these all are some social and ethical issues which is there is IT. The issues
impact on Tesco image as it led to breach of confidential data and info. (Belk 2020)
Moreover, it also impact on growth of company in retail sector as they are not able to make
maintain their privacy and protect data of customers, employees, suppliers, etc. Along with
that, they are not able to follow IT laws and implement it in proper way. These issues also act
as barriers in effective implementation and working of IT system and function in Tesco.
Besides that, it highly disrupts the sharing of data and info within organisation. Thus, it
requires developing action plan and taking proper measure to resolve issue and overcome it.
Identify and discuss the growth and impact of Internet on
businesses.
Once the online and the offline worlds were different from each other but now with
the e-commerce in the retail business the difference is being blurred. The internet makes
much impact on the retailing business at the start. The internet allows Tesco to connect with
the potential customers along with expressing the brand in new ways. Physicals stores are
used by the company as their sales and communication strategy rather than being their
primary and only way of reaching out to the customers.
It was assumed that the decreased importance of the physical stores will lead to less
interesting designs but the outcome was opposite of that. The retail company used the internet

as a source to communicate and build brands online that lead to more impactful and focused
physical stores identities. It can be observed from the more variety and options available at
the retail business as compared to the earlier days when internet was still rising (Byun and
et.al, 2020). The online –offline shopping experience of the customers is truly changed by the
omni-channel retailing. The company following the approach is having the consistent prices
in all the formats and the customers are provided with various options like shopping online an
having the product at the store, shopping online along with the home delivery, shopping at
the store and having the products from the stores and shopping at the store and having the
home delivery of the product.
The impact of the internet on the retailer is far beyond their physical space or the
online presence. The retailers are using the internet in all the aspects of the business like the
manufacturing, design and logistics, through the internet based technology. The company is
providing the customers with convenience and much more like affordable price, latest
designs and quick updates. All this was not possible before the evolution of internet.
The internet is fueling the changes and getting attention form the retailers. The
shopping center developers are comparing the new technologies, understanding the
limitations and advantages, to respond with their own changes. The retail industry is looking
at various sources of social media to connect with the customers all round the world. The
company is trying to bring some kind of character or special vibe to the brands for attracting
more customers. In order to this the companies are collaborating with other companies to
provide the customers the taste and sense of culture from worldwide and hence the customers
are getting the best of all.
It can be understood that the internet has made great impact on the retailing business
by making the shopping experience more convenient and allowing to choose from various
options for the customers. The retail company has taken steps to address the challenges as
well as opportunities related to the internet shopping to integrate the online and physical
world. The companies, center operator and developer are using different platforms to reach to
their customers (Langley and et.al, 2021). They are trying to enhance the ways in which the
experimental qualities and the retailing environments can be improved. All this is bringing
opportunity for the customers.

CONCLUSION
It can be concluded from the report that there are variety of computers used by the
company Tesco for the doing various functions at the company. The computer is classified on
the basis of size, purpose and type. The main computer used in the business is main frame
computers, microcomputers and digital computers. The information technology is impacting
the retail business to a great extend as it is used in the automating process, data collecting,
getting feedback for the decision making and communication. The business is also faced with
the challenges in using the information technology. The ethical and social issues are also
having impact on the business. There is a problem of privacy on the internet. The internet has
its own impacts on the retail business. The growth of the internet shopping and the
advancement of the online and offline business are due to the development in the internet.