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

e-Business in the Retail Sectorsignificantly from ICT-enabled improvements intheir supply chain. However, the potentialbenefits differ between segments and retailbusiness models.Internal e-business systems:intense e-business and RFID rareInternal e-business operations can significantlyenhance workflows and business processesand thus increase productivity. However,companies representing almost half of theindustry’s employment said that they onlyconduct some processes by e-business. 22%even said “none”; a “good deal” was stated by20%, and in 11% most processes areconducted electronically. As regards particularsystems, firms representing 60% ofemployment reported to have a softwareapplication to manage the placing or receipt oforders, 59% a bar-coding system, 51% awarehouse or depot management system, and16% an ERP system. RFID is not yet verycommon in the retail industry. Retail firmsrepresenting 8% of employment reported touse this technology, and RFID use is very rarein micro and small retail firms.Electronic sales and distributiondoubled since 2003Retailers representing 38% of the industry’semployment stated that they sell goods“through the internet or other computermediatednetworks”. Almost half of the largeretail firms (45%) and 35% of the mediumsizedones sell online, but only 24% of thesmall retailers and 26% of the micro retailersdo so. The share of companies that sellsonline doubled from 19% (employmentweighted)in 2003 to 38% in 2007. There wasan apparent increase in all size classes. Therehas also been an increase in the amount ofsales conducted online. Compared to thefigures about general sales areas, it appearsthat online sales helps to extend thegeographic focus slightly from regional tonational sales while the international focusremains on the same low level. The e-Business Survey 2007 also found that retailersrepresenting 20% of the industry’s employmentuse a CRM system, an increase from 8% in2003.Micro and small firms lag behindmedium-sized and large onesMicro, small- and medium-sized firms lagbehind large firms in almost all indicators ofICT and e-business use presented in thisreport. Exceptions include the level of internetaccess which is close to 100% in SMEs, theaverage share of employees with internetaccess which is higher in SMEs than in largefirms, and the practice of sending electronicinvoices to customers which is on the samelevel in all size classes. Nevertheless it isnotable that micro and small firms have beenincreasing their ICT adoption in recent years(Chapter 3). The gap between SMEs and largefirms is most pronounced for internal e-operations, followed by ICT infrastructure. Asregards e-sales, the usage gap is betweenlarge and medium-sized firms on the one handas well as micro and small firms on the other.In e-procurement, SMEs are almost on thesame level as large firms.e-Commerce environment lessvibrant in the EU than in the USOverall, the e-commerce environment is lessvibrant in the EU than in the US: across themajority of variables, EU retail firms lag behindUS retailers. In some cases, the differencesare large, for example for placing online ads onother companies’ websites (43% in the USversus 16% in the EU) and for options offeredto pay online (higher percentages in the US forall options). Exceptions include the share offirms with internet access, the average shareof employees with internet access, and the useof internal systems for which the levels aresimilar or even higher in the EU. Surprisingly,the overall importance of e-business stated bythe firms is very similar between EU-7 and USretailers. The reason may be that US retailersanswered the question about e-businessimportance with a higher reference level inmind.7