Enhancing Knowledge Development in Marketing

ABSTRACT In order to survive in a rapidly changing and increas-ingly competitive retail market it is necessary for retailersto analyze accurate and timely information. The focus ofthis paper is how Business Intelligence (BI) influencesand impacts upon the bottom line for SME retailers thusa conceptual framework outlining the key variables im-pacting upon the implementation of effective and efficientBI reporting systems is presented. INTRODUCTION Recent research notes that despite major investmentsin managing the customer relationship over the last de-cade, businesses today are struggling to achieve competi-tive advantage (Sahay and Banjan 2008). In order tosurvive in a rapidly changing and increasingly competi-tive retail market, characterized by the accelerated rate ofstore closures and a downturn in consumer spending, it isnecessary for retailers to analyze accurate and timelyinformation in order to become more attuned to customerneeds and wants. The case for implementing smarterbusiness processes whereby Business Intelligence (BI)influences and impacts upon the bottom line is particu-larly fundamental for small too medium-sized (SME)retailers. This paper therefore seeks to answer the ques-tion, how can SME retailers implement and manageeffective and efficient BI reporting systems in a way thattransforms customer data into informed decision-makingto close the “needs-offer gap” (Favaro et al. 2009)?Previous research on extracting and managing cus-tomer data has focused primarily on businesses operating inthe pharmaceutical industry, financial and professional ser-vices (e.g., Bhalla et al. 2004; Black et al. 2001). While thegrowing importance of modeled customer data for retailershas been documented (Greenyer 2006), the focus of priorresearch has been retail banking services and large multina-tionals in the grocery sector (e.g., Bryers and Lederer 2001;Kenyon and Vakola 2003; Devlin and Gerrard 2004).Notwithstanding this work, there is a clear gap in knowledgeon how smaller retailers extract and manage customer data.Previous work has identified that a market-orientated ap-proach impacts upon the business performance of smallerretailers (Megicks 2001). While in the past SME retailershave relied on anecdotal evidence in order to meet customerneeds, in a changing and highly competitive marketplacethere is a need for SME retailers to capture up to date,accurate and reliable customer data.This paper maintains that frameworks, which havebeen developed to explain this phenomenon in largerbusiness organizations, cannot be immediately transferredto smaller retailers, inherently more limited in terms of theresources required to implement and manage such sys-tems. Smaller businesses are not smaller versions of bigbusinesses (Shuman and Seeger 1986), therefore thesignificant investment (both in terms of financial andorganizational resources) incurred in automating busi-ness processes, which integrates customer data from allsources, is not always viable for smaller retailers. Whileelaborate BI systems are not in all cases appropriate forthese firms, in order to remain competitive SME retailersmust gather reliable customer intelligence to becomemore attuned to customer needs and wants (Wood 2008).An appropriate example of BI utilization in this case mayinclude customer contact data collection and analysis toprovide targeted marketing communications, with the aimto build long-term relationships with different customersegments. For the smaller retailer however, the key issueis “how” data is captured and the technology required forimplementation in light of limited resources.This paper seeks to address this issue by developinga conceptual framework representing the key variablesimpacting upon the implementation and performance ofBI reporting for SMEs in the retail industry. In this paper,the term “SME retailer” will refer to retail organizationswith less than 250 employees (European Commission2003). In developing an appropriate BI framework forSME retailers, the paper will first revisit the BI conceptthat integrates and consolidates information from theconsumer to retailer. Following this, in order to under-stand the key variables which impact upon the manage-ment and performance of BI reporting systems, the theo-ries of planned behavior and task technology fit will bediscussed. Based on the review of the literature, a concep-tual framework is presented. The paper will conclude withsome initial propositions for future research in this area.