Assignment Outline and discuss the key impacts and change that technological developments have had on retailing and distribution channels. Use illustrative examples to identify how customers/organizations have benefited from these developments.

Ans: In general, the retail sector is changing rapidly as engagement and interaction between the digital and physical world opens new business challenges and opportunities that were quite difficult to imagine just ten years ago. After the crash of dot-com in 2000, the concept of extending retail functions to the digital world while combining various channels of sales into a seamless shopping experience for consumers might not have been considered with great interest and enthusiasm. Still, only a few years later, the idea of multi-channel retailing provides new possibilities in the sector. Actually, it would not be wrong to say that it is the global transformation that has offered the idea of various distribution and retailing channels. It has been set in motion by the global adoption of the web by general public.

This is what has forced organisations and retailers to consider the effect of technology on different retailing and distribution channels to take advantage from it. Before the key changes and impacts of technological development on distribution and retailing channels are discussed, it is quite important to understand that underlying this revolution, there is a significant impact of adoption of digital devices such as smartphones on organisations and consumer behaviour. For instance, mobile digital technologies help in the development of on-the-go services targeted ads. Thus, relationships between retailers and customers are extended into the digital sphere and beyond the physical store. Other than mobile phones, some other innovations that have been introduced in businesses include personal selling assistants, self-check-out systems, digital advertising displays, and electronic price tags (Pantano, 2014).

In recent times, technological advancements have had a significant effect on the operations and efficiency of produce distribution. For instance, with the introduction of automated processes and technical systems into the models of product distribution, it is possible for order fulfilment companies can benefit from improvements to workflow, efficiency, and the bottom line. Technological developments have influenced production distribution and retailing in the following ways:

·         Integration of information flows between logistics, distribution, marketing, and sales.

·         Improvement of balance and flexibility with inventory levels and product demand.

·         Improving the management of warehouse.

·         Enhancing the efficiency of distribution and retailing.

Enhancements and improvement to communication offered by technology have influenced information flow in some impeccable ways. For instance, from the moment when an order is obtained and throughout the process of product distribution to shipment, information can be integrated seamlessly across every department. While an opportunity is provided by team communication tools for immediate contact with anyone, specialised programs are capable of converting sales into orders in real-time while moving them directly for fulfilment into the supply chain. With modern technology and equipment, the process of product distribution becomes a consistently moving mechanism of fully automated operation that is supported by management and human labour.

Example of use of technologies in organizations

PepsiCo is helping huge customer product relation by using technologies to enhance the changes in the short period of time. The use of technology was indeed successful and helped in taking leading position on the global market. The HR related processes and other development in the company are due to implementation of new technologies and by advancing the system.  

Key Impacts

Inventory Management and Product Demand

With sales being automatically transformed into orders and order fulfilment process being systematised, the supply chain is penetrated by orders and they are proceeded towards fulfilment with minimal intervention of humans. Information about partner offerings, produce demand, and inventory levels can be transferred as required for facilitating more effective management of inventory. Actually, these immediate notifications enable for more accurate and precise projections about volumes of orders and more efficient management of inventory for reducing costs and delays in the distribution of products (Moorhouse, Dieck, & Jung, 2018).

Warehouse Workflow Optimisation

Before advancements in modern equipment and automated systems, considerable amount of time was wasted by workers in traveling throughout the warehouse for moving products. At present, machines have significantly facilitated the movement of products while inventory management software have reduced time lag and improved accuracy while optimising warehouse floor space. It is possible for organisations to develop smaller warehouses with more efficient movement and inventory management because they are not limited by the aisle widths and access capabilities of different forklifts. Contemporary equipment like elevators, rails, and conveyors can be incorporated with a centralised network for reducing errors and improving efficiency. In a random manner, units and pallets can be placed and then called up when they are needed without any issue about misplacement because such a network is more accurate and it records more than a person with a clipboard.

Efficiency of Distribution Process: Considering the fact that is more accurate and faster than human analysis, technological development enables the attainment of immediate and cost-effective distribution process. Traffic managers of production managers can enhance distribution with the use of software that considers the route for fastest fulfilment with lowest cost. Actually, with warehouse workflow enhanced for the best utilisation of movement of goods and floor space, the process of product distribution can be made more efficient. In fact, the technological advancement seems to continue to loading bays from warehouse as well. With the use of specialised shipment, it is possible for shipment trucks to be loaded in accordance with the most efficient route. This serves to improve the speed of delivery while reducing the risk of damage to products.

Omni-Channel Distribution: With the evolution of customer demands, retailers and business are struggling to remain relevant to customers by offering them trustworthy, reliable, engaging and seamless shop experiences across different retailing channels. Actually, multi-channel retailing can be utilised by retailers by growing their customers, total sales, and market share. Omni-channel retailing means unlimited access consumer information. This information can be utilised by organisations to deliver the experience that is required by their customers.

How Customers and Companies have benefitted: Overall, technological advancements in distribution and retailing sectors have significantly and positively influenced both businesses and customers. For instance, in case of businesses, they can utilise loads of information about customers and can make use of multiple channels for gaining increased market share and growing their customer base. Meanwhile, customers are benefitted in such a manner that they are able to obtain and fulfil their desires in an efficient manner. For instance, they can get their products through the channel that they find is the most comfortable for them (Mohr, Sengupta, & Slater, 2010).

There are a number of specific influences (both internal and external), which affect the purchase of products, services and experiences. Identify and discuss (in direct relation to an appropriate decision-making model) the relevant influences that might affect the purchase of a low-involvement product such as washing-up liquid.

Generally, consumer behaviour is quite a broad field and it has been studied extensively. Its complete comprehension is not possible as it is closely associated with the human mind but forecasting and predicting a person behaves in some specific purchasing situations can be determined through the previous decisions made by consumers. Buying decisions are made by consumers every single and many individuals do not know the factors that seem to influence them or drive them to this specific decision. For instance, purchasing a coffee comes automatically and it does not require information search. Underlying every buying decision, there are some specific characteristics that can come from psychological, personal, social, or cultural factors. When it comes to low-involvement products, in-depth information about the product is not necessarily needed. Each of these factors seems to include some dimensions that can be utilised in marketing. Consumers might believe that they have always bought the same product but they might not understand that this decision can come from their fellows or family. As it has been explained above, consumer purchasing behaviour is affected by psychological, personal, social, and cultural factors (Johnson, 2013).

External Influences: External influences include social factors. Consumer behaviour is affected significantly by social factors. Every person has someone who influences his buying decisions. Some important social factors include status, role, family, and reference groups. Although ever customer is an individual, he still belongs to a group. It is referred to as membership group. It is quite a simple and direct classification. Reference group is another type and it influences the behaviour of customers along with their self-image. It is possible for family members to influence the buying behaviour of individuals. An environment is formed by a family for acquiring values while shaping and developing personality. A possibility is offered by the environment for developing opinions and attitudes towards specific subjects including politics, society, and social relations. First perceptions are created by a family about products and brands, and even consumer habits. For instance, consumers with specific brand perceptions when they were quite young, they can perform the same brand selections when they are grown up and they might not even recognise that these selections are influenced by their family.

The purchasing power and occupation of a consumer affect buying behaviour and purchasing decisions. In fact, their income level significantly affects what can be afforded by consumers and their perspective or point of view about money. People sharing similar occupations normally have similar taste in leisure activities, clothing, and music. Usually, they socialise with each other and they share similar ideas and values. Level of income influences what can be afforded by consumers. The lifestyle of consumers indicates how the person seems to live and how he spends money. It is generally combined from congenital characteristics, current situation, and earlier experiences.

Internal Influences: In their lives, different roles are played by individuals and each role seems to include attitudes and activities that are expected to make a person act according to others around him. When it comes to luxury items, an important role is played by social status because they are often purchased because they reflect the social status of people and they want to be recognised as belonging to upper-class. During their life, customers tend to change and their purchasing behaviour changes in accordance with their stage of life and age. In addition to it, consumer habits, hobbies, lifestyle, values, and environment also influence decisions about purchasing a product. Products choices made by customers are associated with their lifestyle (Mooij, 2019). The choice of a buyer is also affected by psychological factors including attitudes, beliefs, learning, perception, and motivation. Actually, both personal factors and psychological factors play an important role in influencing the purchase decision of low-involvement products.

Simon’s Normative Model and Low-Involvement Products: This consumer decision model is based on the fact that decision making is irrational and it is characterised by the use of shortcuts, limited information processing, and the desire of trying new products.

This model perfectly explains the purchase of low-involvement products. Since these products are quite cheap and they do not reflect social status, customers tend to purchase those products which can satisfy their needs and the products that are considered to be satisficing. For instance, let’s suppose that a person goes to purchase a dish cleaner. Now, it has been determined above consumer decisions are significantly influenced by social factors and by the opinion of others. In this case as well, economic situation, need, and family’s opinion will serve to shape the decision about purchasing the product or not. Usually, when a customer is considering whether to purchase a product or not, he tends to research and find the necessary information before making a purchase. However, the same does not apply to low-involvement products because they are not costly. Customers are worried about their money and that is why they want the best of it. In order to do that, they research and find the necessary information. Meanwhile, since low-involvement products are not costly and quite affordable with limited purpose, consumers do not consider researching and finding necessary information. Instead, they consider whether the product is cheap or not and whether it is capable of meeting their minimum requirements like in this case, whether the dish cleaner can last for the month or not. The purchase of low-involvement products is influenced by these factors and once a customer finds satisfaction in a specific product, he does not consider purchasing other products unless other low-involvement products offer a unique advantage to them (Hawkins & Mothersbaugh, 2010). Amazon use advanced technology for keeping records and databases. The use of technology in amazon provides additional benefits to the company. The well organized and timely updated website enables the customers to purchase products by using online services. The customers can access any product and any time according to their requirements. Besides database management, technology is used for inventory management, warehouse management and customer services. The proper use of technology enhances process to get information and have significant impact on the customer satisfaction.

References Use illustrative examples to identify how customers/organizations have benefited from these developments

Hawkins, D. I., & Mothersbaugh, D. L. (2010). Consumer behavior: Building marketing strategy. Boston: McGraw-Hill Irwin.

Johnson, B. M. (2013). The psychology of consumer behavior. Psychology Press.

Mohr, J. J., Sengupta, S., & Slater, S. F. (2010). Marketing of high-technology products and innovations. Pearson Prentice Hall.

Mooij, M. D. (2019). Consumer behavior and culture: Consequences for global marketing and advertising. SAGE Publications Limited.

Moorhouse, N., Dieck, M. C., & Jung, T. (2018). Technological innovations transforming the consumer retail experience: A review of literature. Augmented reality and virtual reality, 133-143.

Pantano, E. (2014). Innovation drivers in retail industry. International Journal of Information Management, 34(3), 344-350.