INFORMATION TECHNOLOGY IN RETAILING WITH INDIAN PERSPECTIVE
INFORMATION TECHNOLOGY IN RETAILING
WITH INDIAN PERSPECTIVE
By
Miss. P. PIRAKATHEESWARI, Lecturer in Commerce,
Sri Sarada College for Women (Autonomous), Salem ' 16.
Introduction
Information technology is the backbone of modern retailing. The traditional retailing was easier to manage because of its size, scope and uncompetitive nature; and usually the shops were managed by the owner-manager. But the modern retail formats, which are superstores and large chains owned by large organizations, are difficult to manage without an efficient and reliable IT system in place.
Technology proves beneficial in creating and maintaining customer relationships. Analysis of data collected at the retail point of sales helps understand preferences, buying habits, spending budgets, family needs of an individual customer. Relationships are maintained by utilizing IT for periodical e-mailing, SMS, greetings, promotional letters and personal calling.
Retailing growth has demanded IT deployment to broaden its arena and overcome challenges namely Business Optimization, increasing SCM efficiency, innovating shopping experience and other manual limitations.
Introducing Retailing in Current Scenario
Retailing is the most active and attractive sector of last decade. While the retailing industry itself has been present since ages in our country, it is only the recent past that it has witnessed so much dynamism. The emergence of retailing in India has more to do with the increased purchasing power of buyers, especially post-liberalization, increase in product variety, and increase in economies of scale, with the aid of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales are at the highest point in history and new technologies are improving retail productivity. Though there are many opportunities to start a new retail business, retailers are facing numerous challenges.
With time the Indian markets are becoming inundated with numerous dispersed firms, companies that demands to lead with an extra mile to gain a competitive edge over their competitors for whom Information Technology has become a critical medium.
Classifications of IT investments in Retailing based on the need / value
' Improving efficiency of Supply Chain
' Improving the Shopping experience
' Business Optimization
Improving Efficiency of Supply Chain
Retail and CPG companies are facing a number of challenges due to increasing complexity of supply chains caused mainly by offshoring of manufacturing. Increased lead times, demand variability and supply disruptions are forcing companies to pile inventories thus leading to opportunity losses and higher cash conversion cycles. Demand forecasting has assumed critical significance in managing supply chains efficiently. Having an agile supply chain network that seamlessly connects demand, supply and product remains the top priority for retailer and consumer companies.
We enable our clients in the retailing and CPG industry to be more competitive by improving their time to execution. We offer solutions that help attain more efficient movement of goods and information across the supply chain. These include monitoring and analyzing real time inventory to forecast accurate sales, optimizing store and shelf replenishment to reduce stock outs, improve ROI and finally optimizing utilization of labor, space and equipment handling in real-time to improve productivity and profitability.
Supply chain improvement a critical Retailing investment comprises implementing ERP packages, forecasting tools, and others. The leading manufacturer-retailer Madura Garments in one of the interactions, after the implementation of the SAP ERP package, company could easily measure the success of the implementation by certain related indicators.
Improving the Shopping Experience & Business Optimization
These investments comprises the value added services being provided by disperse retailers like the CRM packages by firms to add value to their existing products. These types of investments may turn out most difficult to measure of all especially if the company lacks experience in using customer data to increase customer profitability. An instance that can be referred is Fabmall's e-commerce website tracking customer preferences and built-in business intelligence also sending suggestions to customers based on their earlier purchases.
Critical Avenues for IT Investment
Customer relationship management: Indian retailers are aggressively investing in Customer Relationship Management Solution for retaining; acquiring customers, brand management, to analyze consumer-buying behaviour, buying patterns of 'loyalty cardholders', integration of multi-channel sales and others. Few feasible CRM solution packages are namely Talisma, Siebel, SAP, Retek CRM and Sales Logix. Retailers like Pantaloon, Café Coffee Day, Barista and Shoppers Stop are some to deploy referred CRM packages.
Business Intelligence tools
These comprises tools namely Data warehousing, data mining, Online Analytical Processing (OLAP) facilitating a wealth of information in terms of sales and behavioral analysis to retailers. Business Intelligence tools are identified to be very versatile that analyze sales data from the POS, determines trend of sales for the categories and sub-categories of merchandise sold from disperse stores that enable the retailers to understand the frequency of sale, geographical spread of sales, types of sold merchandise and thus provide 'what if' analysis specially for projected sales and price changes . This would lead to increase in sales.
RFID
Currently RFID is profitably being used in retail firms of developed countries primarily in two sections namely in supply chain, warehouses and Retail front. It ensures individual articles tagged by RFID enable quick billing and to ensure automated stock keeping.
B2B Software
B2B software is well suited for multi-channel retail business consolidating sales via Internet, mail catalog, phone/fax and point-of-sale (POS) terminals installed in physical shops. The concept with multi-channel business is not new. However, the latest technological vehicles like Web/Internet, created a new possibilities for retailers indeed. The brick-and-mortar business owners and mail catalog retailers now have much more opportunities to expand and reach wider clients nationally and internationally using such tools as Web stores and shopping portals. This has created new challenges for efficient business management and consolidation of all sales/marketing channels to save the operational cost. That's why companies start looking for new multichannel retail software solutions that could help manage the business and increase productivity.
Deployment B2B software provides with powerful features to observe variety of multi-channel retail operations in the centralized Web-based back office. Managers can review consolidated customer shopping activities from different sources like Internet, mail catalog, etc. This creates additional cross-sell opportunities and helps to improve business performance. Such operational environment improves client shopping experience too, because customers can get real-time updates about products availability, special offers and active promotions. Optionally, B2B software also provides companies with rich functionality to manage inventory as well as sales/customer data across Web sites from a single back office. The system has also in-built helpdesk (customer service) capabilities to provide managers with better visibility of current business activities across multi-channel retail operations on the Web. Customer expectations for multi-channel retail are permanently growing, and companies must respond with more capabilities in their solutions. And here, the most cost-effective solution is having the SLA from B2B to keep up-to-date the custom multi-channel business solution and be able to get on-demand development services to meet individual project requirements indeed.
Business to business solutions usually implemented either through existing packages like C-ME, SOA or custom made solutions are used by large retailers and manufacturer-retailers having a secure and stable network is a prerequisite for implementing B2B. This B2B site would entail confirming vendors, suppliers and other channel partners to send the necessary information through the network that in turn ensures reduced costs and availability of merchandise at the stores.
Business Optimization Software
Product pricing software: Significant prospects of profitability can be achieved with the advent of sophisticated price optimization / revenue management techniques offer. Currently two US-based software product vendors Demand Tech and Khimetrics have come up with products to optimize the prices of individual products. India will introduce such products in the coming years as retailers have started understanding the features of the products and their deployment in pricing decision-making.
Merchandise Optimization Software
Merchandise planning is one of the biggest challenges that any multi store retailer faces. Getting the right mix of product, which is store specific across your organization, is a combination of customer insight, allocation, and assortment techniques.
Our domain experts understand this and help clients in making the right forecast by SKU and ensuring that the consumer finds the right product, at the right place, right time and right price. Working closely with our technology partners, we guide our clients through the entire merchandise planning lifecycle in a systematic and integrated way. We support end-to-end merchandising functions including optimizing merchandizing assortments, allocating products, providing planning and analytics capabilities and lastly, providing solutions to maximize value from promotions and price management.
The benefits of Merchandise Planning accrued by our clients include reduced unplanned discounts and promotions, properly utilized floor space, fewer store transfers, and increased turns throughout the chain helping the bottom line immensely.
Software applications though at nascent stages are being developed to apply sophisticated data processing techniques to existing inventory and sales data and thus accurately determine future patterns of supply and demand at each item and store level.
Mobile computing
Mobile computing has facilitated employees in tracking the inventory and provided customers an innovative shopping experience through integration of PDAs in individual shopping carts that would provide information on the products. This use has optimized inefficiencies in inventory and supply chain sections and lead to cost minimization. A similar WAP (Wireless Application Protocol)-enabled mobile phones are catching attention today in Retailing sectors.
Conclusion
CRM solution, Business Intelligence Tools, B2B software, RFID, Business Optimization software and ERP are some of the popular technological avenues for explosive Retailing that has identified IT as critical tool in its scenario. In India IT tools are being implemented in the supply chain that is commonly fraught with inefficiencies like about 50% of the production is often lost before reaching the targeted consumers especially in perishable goods market. Unless these manual problems are solved no IT solution could prove to be much effective.
