CHRISTHIN
Multipurpose template
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These technologies however are not
found to add value in small scale retail, because of costs associated with
implementation. This is especially
interesting when considering that
substitution is high in this industry,
observing the quantity and reach of
minimarkets and other convenience
outlets. Incumbent upstream retailers
see these outlets, rightfully so, not as
competitors. The threat, as substitutes however need to be examined
closely.
These outlets have an extremely
low overhead that creates a huge
advantage over mainstream retailers.
They leverage real estate and enjoy
family based employment/partnership that are uncommon in the
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Marketing For The Future
upstream market. In addition, they
are usually located in lower income
neighborhoods, adding another layer
of competitive advantage. Citizens
living in lower income neighborhoods
often don’t have the luxury of being
able to travel far to do their groceries.
Thus offering a critical assessment to
take place when choosing where to
shop. OOS and OSA are not big issues
for these outlets also because they
are not expected to dispose of a wide
range of goods, which can (over time)
shape consumption patterns. These
advantages can drive away customers from the supermarkets, which
can lead to inventory loss and other
negative externalities.
Respondents indicate that POS
(Point-Of-Sale) systems enable
them to maintain their PI (Perpetual
Inventory) data and keep OOS low.
Even though OOS interrelated, due
to a concentration in suppliers, POS
systems generally add value for the
technologically savvy. We also found
that the stores use visual checks to
maintain a high OSA. However, the
assigning of shelf space is often based
on two factors: the turnover rate and
the profitability of the products. This
provides them with the freedom to
decide the location of different items
in their store.
The main conclusion of this paper
indicates that the methods currently
employed by management of the re-