From the pages of Images Retail (May 2009)

The Science of Hand Holding
By Ananya Saha

Brand proliferation, consumer unrest, market slowdown and increasing competition all point towards better servicing and efficient management. It is no news that technology can help retailers to forecast supply, replenish better, cap shrinkage, raise sourcing efficiency, contain input costs, track inventory,manage the supply chain better. In short, technology can Optimise retail processes. But, while there is evidently a growing basket of solutions on offer, are retailers happy with the mix? How do they choose their interface, and more importantly, what Are the gaps in demand and supply?

Technology drives the retail business – from sourcing to selling to feeding the customer response into the system and following it up with reinvented strategies. No wonder then, that retailers across verticals are implementing latest technologies to drive their business, cut the costs and beat the competition. As retailers grow at a competitive pace, technology provides them the edge to multiply swiftly. This also poses a bigger challenge. As Indian retailers enter into multi-format retailing with varied store sizes in various geographies and stock complex merchandise across formats, technology needs to keep abreast with the high-hopes of the retailers.

Thus, comes in the role of chief information offi cers (CIOs) or the chief technology officers (CTOs) in a retail environment. Traditionally, the CIOs (as the name suggests) were responsible for the information technology employed and the computer systems in the stores to achieve the set goals and targets. But given the competitive scenario prevalent in India today, these tasks do seem redundant. Now, as the tough phase for the Indian retailers emerges, CIOs have a bigger task to control the costs, employ latest technology solutions to create compelling and sustainable value for retailers, manufacturers and the shoppers.Besides working with shoestring budgets, CIOs have to ensure that the applied or to-be-applied solutions are able to demonstrate a high return on investment. This, however, does not imply that the retail industry is a miser when it comes to spending on employing the latest technology.

India Retail Report 2009 quotes an IDC study (India Retail Sector IT Usage and Trends 2007-11: Forecast and Analysis) supplementing the fact that retail IT is forecasted to grow at a CAGR of 32.5 per cent for the period of 2006-2011. The report further states: "Retail is one of the very few sectors in India wherein the growth rate of IT deployment is higher than that of the growth rate of the sector itself. IT is forming the backbone of strategies for offering competitive pricing, and yet, a robust bottom line trough improved management of stores and improved customer experience." Even though Indian retailers (whether small, medium or large) are showing the clear urgency of implementing the best solutions with suitable fi nancial commitments, technology providers need fresh approach towards the subject with a clear focus on retail.

The smart investor
The modern retail fever gripped India in the year 2000, but the automation process started only a couple of years back. The main reason for the technology laggardness was the lack of scale. The industry was nascent, share of organised retail was a miniscule percentage of the total market base and the retailers were still experimenting. As the industry grew by leaps and bounds, the high performance companies started rethinking the fundamental business processes and strategies that can be enabled by technology. As retail in India attains more maturity, retail technology is also maturing with better solutions for the retailers. The retailers across categories are ensuring that their business processes and systems are powered with latest technology.

Going one step further, customer tracking, loyalty programmes, really understanding as to who comes into the store, what type of things they buy, how do they chose what they buy, how do I ensure that what they want to buy is already on the shelf all of these things are possible by using technology...

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