ICT and e-Business Impact in the Retail Industry - empirica

e-Business in the Retail SectorBack in 2003, about 30% of micro-retailers companies still said that they used analoguedial-up for connecting to the internet, typically at a rate of 56 kbit/s. However, there is stillscope for improvement. Broadband internet access should be considered as basicinfrastructure and become the norm for the majority of companies, at least for mediumsizedand large firms.The maximum available bandwidth is an ICT infrastructure indicator, but this does notprovide information about the actual usage. Another indicator is how many employeesuse the internet as part of their daily work. In retail companies, the average share ofemployees with internet access at their workplace is close to 50% (see Exhibit 3.2-1).This is more than in other sectors, for instance manufacturing sectors such as the steeland furniture sectors (about 25-30%) and the chemical industries (45%). The percentageis higher among smaller companies; this reflects that in the retail industry the internet ismainly used for procurement and management tasks, but not by cashiers and normallynot by simple shop assistants 28 in their daily routines. As large retail stores have a higherpercentage of employees with such tasks, the total share of employees with internetaccess is lower than in small shops where the manager and shop assistant is often thesame person.Use of internal networksSimilarly to internet access, the use of ICT to connect computers internally to a companynetwork (Local Area Networks – LAN) has become a commonplace, at least for mediumsizedand large retailers. The adoption of LAN infrastructure has significantly increasedsince 2003 (see Exhibit 3.2-3).The diffusion of Wireless LAN (W-LAN) technology has surged in recent years. Thistechnology was not much used back in 2003; in the meantime, about 40% of employeeswork in retail companies that operate a W-LAN. In large firms, the adoption rate hasreached close to 60%. These are similar adoption levels as in the transport and logisticsservices sector, but lower than in most manufacturing industries, e.g. in the chemicalindustry. 29 W-LAN is used to facilitate network access within a site or building: at certainaccess points, distributed throughout various buildings and sites, W-LAN provides secureInternet access to authorised users. In retail, it is often used in distribution warehouses,but also in stores. These findings indicate that retailers are recognising the importance ofusing W-LAN to further business process reengineering. Yet, they are lacking behindother industries which might originate from the diversity and specific employmentstructure within the industry: retail is labour intensive at the shop floor with a highproportion of part-time employees and low skilled labour force.2829In specialised non-food stores, however, internet access in the shop has become quite commonto support the work of shop assistants: they can quickly check information online (e.g. specialtechnical features of a product) and thus better respond to enquiries of customers.In the chemical industry, close to 60% of employees work in companies with a W-LAN (seeSectoral e-Business Watch study on the chemical, rubber and plastics industry, 2008).35