Cost-Effective Technologies for Retail

Retailers are exploring newer technologies to gain an edge over their competition through cutting costs and being more responsive to their customers' needs.
Cost-Effective Technologies for Retail

Retailers are exploring newer technologies to gain an edge over their competition through cutting costs and being more responsive to their customers’ needs.

Retailers are facing increased competition and demanding customers, and are fighting a daily battle to improve their performance, which is affected by all the contributors in the retail Supply Chain (SC), including their suppliers and Distribution Centers (DC). All the participants in the SC are required to work in harmony to compete worldwide on objectives such as price, quality, reaction time, suppleness and reliability.

Simple but effective IT solutions can become strategic enablers that can collaborate with and integrate all SCM participants. Retailers can reap benefits through improved supply chain efficiency and better customer relationships as a result of refined operations systems.

The path to adoption of these IT systems is challenge-free. Here, downtime and revenue are mutually exclusive – it is impossible that one is occurring in the presence of the other. To avoid downtime, barcoding all SKUs and scan based operations are excellent facilitators. Retailers benefit from this in various ways by speeding up routine operations and handling larger customer requests in shorter time.

In order to forecast demand precisely and maintain an appropriate category mix, retailers are increasingly seeking technologies that provide demand intelligence and provide centralisation and integration of various inputs to this algorithm. The persuasive congregation and distribution of demand intelligence data is and will continue to remain largely dependent upon point-of-sale (POS) data retrieval and systems integration. However, as POS becomes further virtualised both in the store and on the Web, tech innovations will have to come up with new methods of gathering and sharing this intelligence to expand revenues.

The industry is also employing Radio Frequency Identification (RFID) devices to produce precise, real-time data which forms the input for various processes within the supply chain. These inputs have been found to play an important role in reducing the cost of storage and distribution. EDI or Electronic Data Inter-change is another solution that is used by retailers to communicate with customers; and for reducing or eliminating manual processes – like that of order creation. Manpower resources can be employed for more critical functions, thus reducing the cost of availability of accurate information, enabling easier invoice handling and improvement in stock positions. EDI when assimilated with the ERP helps articulate plans and in forecasting.

Loyalty based solutions are often offered in combination with other IT solutions like POS, kiosk and credit card payment help track customer behaviors at relatively low costs. While it is often said that it costs five times more to acquire a new customer than to retain an existing one, building and maintaining solid customer relationships offer more than just cost reduction, including increased revenue and more referrals.

To retain market share today, retailers must also be responsive to their customers’ social and cultural concerns including such issues as identity and confidential data protection, workplace policy and practices, and responsible energy consumption.

The term ‘Retail’ has expanded from meaning just garments or FMCG sectors and now includes newer commercial transactions in the B2C space like retail banking. Traditionally, retail BSFI industry has used branches, ATM centers, call centers, mobile, and Internet to interact with their customers, though newer direct channels such as social media have now emerged.

While the branch remains a basis of a BSFI sector’s sales and service proposition, its role is transforming in areas such as layout and design, sales and service, and staff and people. Kiosks perform as public-access IT solutions and support both customers and retailers. The technology has evolved such that these systems can notify, instruct and train the customers while performing e-transactions. And they also provide a platform for communication and help reinforce the retailer’s message. BSFI are increasingly focusing on driving sales through the online channel due to the steady growth in the number of customers using online banking. The growth of smartphones, technology advancements, and enhanced security levels have helped increase the adoption of mobile banking services. As a result, BSFI have seen reduced operational costs and improved efficiency.

Technologies in retail can significantly enhance customer relationship management and improve efficiencies. However, for it to be cost effective it should:

 

·         Be on a single platform;

·         Be seamless and simplified;

·         Integrate all partners in the supply chain;

·         Be available on all devices - PC, Tablet and phone;

·         Be real time and fast.

Retailers are exploiting the advantages of an info-intensive business environment in order to deliver superior solutions to their customers. IT solutions can reduce costs, increase supply chain suppleness and response, integrate suppliers and partners, and ultimately provide a more powerful shopping experience.

By employing and partaking technology with key players in the supply chain, retailers can develop two-way planning, forecasting, and replenishment programs. In this way, they can reduce stock-outs, increase inventory turns and margins, and ultimately deliver a convenient, fast, cost-effective, and enhanced shopping experience to consumers.

Contributed by:

Hitesh Athawasya (Head Operations Planning & Control)

Drive India Enterprise Solutions Limited                                                                                                                                            

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