Small Orders Reduce Retailer Information Power

Abstract

New information technology has the effect of increasing retailer information power. Under decreasing sales growth and produce‐line proliferation, retailers (with electronic point‐of‐sale systems) place small orders. However, the small order placed by retailers makes the difference between the sale to retailers and the sale to consumers (the retail) trivial. Hence, sellers (manufacturers or wholesalers) wish to receive retailer information of the sale to consumers. On the other hand, the small order increases physical distribution costs. In an attempt to avoid these increased distribution costs, manufacturers use wholesalers who deal with many kinds of commodities. In this case, manufacturers, who still expect to have retailer information, should also be connected on‐line by electronic computer systems with the wholesalers, who record sales of commodity items to each and every individual retailer. This is the practice of a Japanese butter‐processing manufacturer.

Citation

Seto, H. (1985), "Small Orders Reduce Retailer Information Power", Marketing Intelligence & Planning, Vol. 3 No. 4, pp. 25-30. https://doi.org/10.1108/eb045719