Indian Retail Bounces Back With IT

Currently the stage where retail is, innovations

hold the key to sustain & succeed. Innovations not only in terms of store

layouts & retail formats but also in fields of various customer touch points

which vary from product categories to assortment to PoS to loyalty to store

experience to convenience....so on & so forth.

The solution



We have implemented warehouse automation, a system which has helped our

warehouse to perform Inward and outward activity using a handheld terminal

(also called as PDT), reducing the manpower and increasing the time taken by

warehouse from request creation by merchandiser to ship the required

merchandise. The worker efficiency has increased by 40%. This has helped

reduce receipt variance at stores to nearly zero. The same system is used at

the back store for return to vendor and return to DC.

80 % of our business is sale of furniture and we are connectivity

dependent for using SAP for furniture business. For this, we had budgets for

back-up of connectivity, but we have formulated a cost-effective

connectivity solution for this backup which has been rolled out across all

stores and is 60% less than the standard backup connectivity which we had

planned earlier.

Earlier mobile users used to connect to SAP ERP using a VPN client, but

with implementation of a SAP router, any number of mobile users can connect

to SAP using standard secure routers and default firewalls. This has helped

in reducing cost of VPN license to the tune of Rs 10,000 per user.

Certain process improvement in SAP has been rolled out to reduce

duplicate work like automatic generation of STO for sales orders of

furniture.

We have implemented VoIP between our mother warehouse and HO has reduced

our telephone cost to the extent of 20- 25%.

CFL ventured into the retail business in

April 2008 with 20 rural retail stores in the state of Andhra Pradesh as a

pilot run. SAP was the core ERP of its manufacturing business then and data

from the POS application was uploaded to SAP on regular intervals. However,

CFL retail business faced a lot of challenges in day-to-day routine

operations, including: Delay in information availability on items to service

customers; POS Break down in Peak periods; Data replication from Store to HO

and vice a versa; Inefficient Inventory Management; Statutory requirements

at POS leading to manual billing thus leading to higher customer billing

time at POS; Internal controls & audit trail; and Poor MIS. It decided to

expand its rural retail presence and targeted to achieve 300+ retail stores

in Andhra Pradesh by March 2009. CFL also decided to get into the rural

lifestyle business. With the above challenges on hand, there was a need for

a retail application which could cater to both Agri Retail as well as

Lifestyle Retail Business. LS Retail and Microsoft Dynamics NAV were

implemented to cover Point of Sales; Stores Back Office; Warehouse Inventory

Management; Purchase; and Finance and other back-end operations at HO. Some

of the challenges faced in this transition included: Change Management for

the CFL team that was from a manufacturing background; challenges in

implementing rural retail processes; statutory requirement compliance;

faster roll out of stores; Integration with SAP meant techno-functional

consultants from Microsoft Dynamics NAV, LS Retail and SAP had to work

together. The company now has a retail solution that is an end to end retail

solution catering to Agri as well as lifestyle businesses; gives farmer

information at POS; offers special promotions/schemes for farmers. However,

the most pertinent benefit to farmers is the elimination of middlemen from

the supply chain. The project also strives to ensure that all that is needed

by a rural customer is easily accessible be it products or services and help

him to earn more & increase his standard of living in rural India.

Sharad Singh, Program Director—Retail Group, MindTree

...On unique challenges for Retail.



The organized retail sector is facing some unique challenges. To name a

few, these can be classified as high real estate costs,

value-for-money-conscious customers, unsatisfactory infrastructure for

logistics and bad inventory management, thus forcing them to do frequent

sales.

IT applications can help retailers put the right product in the right

store in the right quantity at the right time. All they need is up-to-date

inventory information and history of sales records.

...On expected growth.



This is hard to predict at this point in time. The discretionary spend

has gone down/been delayed significantly but non-discretionary spends have

sustained or gone up slightly. The analysis whether there is an absolute

increase in numbers or it is just the Rupee value (due to inflation) would

take some time.

The real test would happen in the next four-five months when the holiday

season begins.

...On using social networking tools for promotional marketing.



The last year has been quite significant for retailers. Social networking
sites such as Facebook and Twitter are being used by retailers for promotion

and marketing purposes. Another significant innovation has been the

availability of iTunes apps for Apple iPhone by retailers such as Amazon,

Target, 1-800-flowers, etc. Closer to home, most of the organized sector is

just finishing its retail ERP package implementations and have started to

look at planning and forecasting solutions now.

Chirantan Chatterjee,Associate Director - ECM Practice

Head, Virtusa Corporation

Traditionally, the retail industry has lagged behind other industries in

technology adoption. However, the industry in the country is consolidating

and the percentage of organized sector is increasing at a strong rate. Some

of the technologies which the retail sector is exploring today include

Customer identification using RFID, e-Catalog based selling, Mobile Point of

Sale (PoS), Digital Signage and Intelligent database among others.

Growth in the retail sector



An analyst study reveals that the Indian retail market is the fifth

largest in the world, with a market size estimated to be $ 427 billion by

2010. However, today, the major component of this market is in the

unorganized sector. The organized retail sector forms a small chunk of this

huge market. This is expected to change significantly in the near future, as

the organized sector is expected to increase its share to more than 20% in

the next few years.

According to a leading research firm, the retail industry will account

for a high share of technology investments in the country. The technology

investment in this sector is expected to increase to approximately $1

billion by 2010.

Hottest trends in IT apps for Retail



Today, the format of Indian retail market is heavily oriented towards

physical stores and in-person interactions. Very few online stores are

available and successful. Given the focus on in-store interaction, companies

are still using web interactions mainly for information purposes and to pull

the crowd into stores. This means there is a huge opportunity for the retail

sector to take the next steps in understanding consumer buying behavior and

to personalize the content for them.

Further, I believe the social media networking sites are providing

immense opportunities for businesses to listen and understand their target

customers. These sites are driving consumer choice and influencing consumer

preferences. Investment in online/web technologies to provide an enhanced

customer experience would be one of the trends that will emerge in the near

future.

One of the drivers for retail industry bringing an online face to its

operations will be the rapidly growing Internet usage across India.

Online/e-commerce transactions are expected to increase manifold in the near

future.

For e-commerce to take off, it is imperative that the content

architecture is well designed and architected right from the beginning.

Without such a structure (taxonomy, navigation, etc) the web interaction

can't be made appealing. This is a huge area of growth and opportunity for

Enterprise Content Management (ECM) in general in India.

Also, most content is still fairly rudimentary. We believe, an area of

focus may be towards improving the quality of content and making it a rich

digital asset as well as to create metadata. This links to the information

architecture to drive business online. Without proper meta data, we can't

present content in the right context at the right time.

Another area of focus in future may be the integration of ECM

applications with back end ERP systems to present correct info about store

availability, shipping etc. Self-service portals will be a key trend in

retail as most companies are focusing on Web experience and providing

loyalty programs for self administration.

Along with these challenges, IT challenges such as single sign-on to

identify the customer properly, integration with back end systems, providing

a scalable and high performing application architecture, etc will follow.