by October 6, 2009 0 comments



A bunch of 350 handpicked customers of Citibank residing in Bangalore were
treated as a pilot sample for an offering from the bank which uses Near Field
Communication (NFC) to make their shopping experience better. Citibank armed
them with a Nokia handset, having a SIM card with NFS capabilities. An in-built
application runs on the phone which syncs up to Citibank’s servers. These
handpicked customers could now walk into the Bangalore outlet of Shoppers’ Stop,
make their purchase, and at the time of billing, ‘tap’ their Nokia phone on a
panel at the billing counter, without using the credit card. NFC allows
encrypted credit card data from the phone pass through the interface and access
the Citibank server, and upon authentication, allow the transaction between the
card member and the merchant. Citibank hopes to replicate this with other
merchants (a few more have joined the bandwagon), especially in sit-down
restaurants where the card member does not need to part with his/her physical
card. NFC till recently used to be a technology which only the Metro Rail
services could embrace. Retail has been the next fastest adopter of NFS, just
like many other state-of-the-art technologies.

Social networking is another medium which has wooed the Retail marketplace
over the last few months. Using portals — exclusive or otherwise — to reach out
to targeted audience, making them feel ‘special’ by offering them deals based on
‘our intelligent understanding of your needs’ and ‘your previous transactional
history with us’, has gained strong momentum in India. Needless to say, this has
encroached into the mobile space as well. Powered by a company called TeliBrahma,
the same Citibank shopper in Bangalore — if he has Bluetooth turned on — happens
to walk around Forum mall, would be ‘fed’ with promotional offers at individual
stores, and as you walk up to the next floor, the offers would change —
depending on your location and time of the day. Some would argue this is
intrusive, but the fact remains that technology is being used to ‘intelligently’
target retail marketing.

This machine takes your weight, height and suggests what
type of clothes would best suit your persona. This reduces the effort spent
in narrowing down to the right choice.

 

Tech Innovations in Retail
Abdulla Fatiya,@home

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%.

The other side of the coin is the Retail ecosystem using technology to
improve its business output, streamlining its accounting processes, and even
forecasting investments and returns. One can sense the skyrocketing adoption of
IT when the so called ‘unorganized sector’ uses it to move away from registers
and receipt books that are renewed every Diwali, to a more agile and efficient
system fuelled by IT. The icing on the cake is the proliferation of devices that
introduced IT to Retail — PoS systems. A few weeks back, Intel’s PoS offerings
went Green — pretty much like other inhabitants of IT — a clear indication that
everything which the Retail industry does is taken as seriouslyby the IT
ecosystem, and in turn the industry is embracing IT like never before to fuel
its growth.

Retail Operations@Coromandel Fertilizers
MS Dynamics NAV and LS Retail deployment to augment retail operations of
a primarily Agri-based company

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.

 

Indian Retail — Challenges, Growth and Beyond…

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.

 

How IT is Helping Indian Retail
Innovative IT solutions are helping Indian retail sector bounce back
towards growth

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.

Isha Gakhar and Vishnu Anand

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