IT lends an edge to retail

Technology has made the world a global village and more recently a global market place. Providing high-end technology to retail, the IT sector is taking the retail world by a storm. Let us get swept away...
Retail-Supply

IT solutions in the retail sector are not only providing a seamless shopping experience to the consumer, but are also helping businesses streamline their operations so that they can meet the challenges of competition, shrinkage, supply chain management, inventory and store management by implementing new technologies. IT solutions are lending cutting-edge technology to retail and it only gets better with newer processes and softwares coming into the market. Retailers need to shake up their feathers and fully realise the potential of IT solutions and incorporate them in their business.  

Life made easy
The global meltdown has affected economies the world over. The size and scope of modern retailing has made traditional modes of retailing ineffectual to cope with the challenges posed by the downturn. Large superstores, malls and chains are difficult to manage without proper IT systems. According to the latest research from Springboard Research "IT in the Indian Retail Industry: Emerging Trends and Market Opportunities" report, said that market growth for 2009 is expected to slow down to 22 per cent from the 43 per cent growth seen in 2008, due to the downturn in the Indian and the global economy. Nevertheless, Nilotpal Chakravarti, Senior Research Analyst at Springboard Research opines that the downturn can also be seen as an opportunity for Indian retailers, "Although the recession has affected retailers' profitability, it opens a window of opportunity for IT vendors as retailers turn to technology to address the challenging economic scenario." Businesses are growing to such a level now, that IT solutions are indispensable and are fast taking over the older pen-and-paper style of retailing. Kumar Vembu, CEO GoFrugal says, “With the increase in cost of labour, reduction in concentration and focus by the staff, the high attrition levels and the lowering cost of technology, technology has become an absolute must have for retail operations. I believe slowly but steadily IT solution is becoming one of those essential things like electricity to run the business.” 

What do IT solutions do?
Customer is king today. Reaching out to thousands of consumers becomes a mammoth task to do if IT solutions are not in place. Direct mail, SMS marketing, mails for promotional offers, online shopping etc are just a few of the many things that information technology can make available to retailers. SCM, inventory management and merchandise optimisation are other avenues where IT solutions lend retailers tools for streamlining their business. RFID for SCM, quick billing and automated stock-keeping is fast becoming the preferred choice with business owners, albeit an expensive one which they can counter by keeping the larger picture of future ROI in mind. "Best-of-class retail solutions like RFID-intelligent shelves, and kiosks still remain out of reach for the Indian market because of their high cost. IT vendors should look to address this gap by rationalising costs, along with clearly defining ROI benefits for clients," adds Chakravarti. Long-term benefits afforded by IT systems should not be overlooked despite them being expensive. “There are also technologies like EAS, RFID tags, CCTV / Network Camera, Video Management etc. that provide enhanced security. There is also EDI [Electronic Data Interchange] technology for B2B process automation that can increase the accuracy and efficiency of B2B transactions. So, there are many different technologies for different aspects of retailing to address the size, efficiency, accuracy and security needs of the retailer.” believes Vembu. 

Challenges
According to Springboard's data, large format stores/hypermarkets were indicated as the top business opportunity in the sector, while competition was named as the biggest business challenge by a majority of the retailers interviewed for the research. Inventory management emerged as the top strategic IT focus, followed by supply chain management. A lot can be done by effective IT systems and processes, but as is the scenario right now, retailers still are struggling with either implementation or maintenance costs. 

Apart from overcoming these challenges, Indian retailing today rests at an interesting crossroad. Where the future beckons with a promise of profit as India is looked upon as the ultimate retail destination, and on the other hand a loyalty to traditional/conventional modes forces a contemplation of whether or not to plunge into the new waters of modern retailing.

  


 

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