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IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
IMAGES RETAIL - SHIJO THOMAS
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IMAGES RETAIL - SHIJO THOMAS

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Interview and article in Images Retail

Interview and article in Images Retail

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  • 1. www.indiaretailing.com INDIA’S BEST SELLING MAGAZINEFUTURE OF BUSINESSES JULY 2012 • VOL. 11 NO. 7 ON MODERN RETAIL `50 US$10Technology:The GreatEnabler Entrepreneur Varsha Bhawnani Founder Vinegar Fashion India The apparel retailer makes a come-back retail excellence Dilip Kapur President ue Hidesign ss og al ol ci yI The leather accessories retailer hn Spe has made luxury affordable OCTOBER 10 –11, 2012 Mumbai, India c Te
  • 2. w w w . i n d i a r e t a i l i n g . c o m JULY 2012 • PAGES 108 • VOL. 11 NO. 7 Editor in Chief Amitabh Taneja As modern retail expands in India, technology can help Editorial Director R S Roy retailers reach the next level of growth. Lean and efficient Publisher S P Taneja but aggressive and forward-looking operations are the Editorial key to market domination in today’s cut-throat world. Editor-in-Charge Sanjay Choudhry (Deputy Editor) No wonder then that technology has come to be seen Chief of Bureau (Mumbai) Nivedita J Pawar (Sr. Assoc. Editor) Assistant Editor Priyanka Dasgupta by Indian retailers as the great enabler which can help Copy Editor Shipra Sehgal them cut costs and boost operational efficiency. They are Sr. Correspondent Payal Kapoor increasingly open to new technological innovations, from Correspondent (Kolkata) Shubhra Saini enterprise resource planning (ERP) and in-store inventory Correspondent (Bangalore) Roshna Chandran management to mobile technology, social media and cloud- Creatives based solutions. Art Director Pawan Kumar Verma Indian modern retail is just a decade old – this has Dy. Art Director Deepak Verma actually been a blessing in disguise. Indian retailers are Sr. Layout Designer Prakash Jha Layout Designer Rakesh Kumar not constrained by investments in legacy systems and can Sr. Photographer Vipin Kardam leapfrog to the latest technology available. And many of them are doing so already to gain a competitive advantage. Circulation & Support In this special technology issue, we discuss the latest Assoc. VP - Circulation & Subscription Anil Nagar General Manager – Administration Hemant Wadhawan technologies available in the market for retailers and the Sr. Manager – Circulation R P Singh opportunities these represent. One thing is clear though – Dy. Manager – Operations Rajesh Kumar for a modern retailer to grow and expand in the modern Sr. Executive – Subscriptions Kiran Rawat age, there is no alternative to technology, a fact that Indian Production retailers have increasingly begun to understand. General Manager Manish Kadam The next edition of Images Retail would be the special Sr. Executive Ramesh Gupta annual edition with a focus on Vision 2020 of modern Advertising retail. How will modern Indian retail look like eight years from now and what are the main bottlenecks hampering Delhi: Kolkata: Vijay Bajaj, assoc. vice president Piyali Oberoi, assoc. vice president its growth? We will connect with dozens of prominent vijaybajaj@imagesgroup.in piyalioberoi@imagesgroup.in national and regional retailers all over India to ask their Mob.: +91 9810304380 Mob.: +91 9831171388 Arti Kapur, general manager views about how modern retail in India is going to shape artikapur@imagesgroup.in Rohan Narayan, sr. executive up and what needs to be done for the country to emerge as Mob.: +91 9313993958 rohannarayan@imagesgroup.in Mob.: +91 9830961388 a retail powerhouse. So stay tuned and keep your feedback Sachin Khanna, asst. manager sachinkhanna@imagesgroup.in pouring in! Bangalore: Mob.: +91 9818818142 Suvir Jaggi, assoc. vice president Mohd. Iqbal, asst. manager suvirjaggi@imagesgroup.in mohdiqbal@imagesgroup.in Mob.: +91 9611127470 Mob.: +91 9871249479 Amitabh Taneja Naveen Chauhan, deputy manager Ahmedabad: editorimagesretail@imagesgroup.in naveenchauhan@imagesgroup.in Pankaj Vyas, manager Mob.: +91 9891390763 pankajvyas@imagesgroup.in Mob.: +91 9909977088 All material printed in this publication is the sole property of Images Multimedia Mumbai: Pvt. Ltd. All printed matter contained in the magazine is based on the information from Waseem Ahmad, assoc. vice president Ludhiana: those featured in it. The views, ideas, comments and opinions expressed are solely of those waseemahmad@imagesgroup.in Hemant Gupta, associate featured and the Editor and Printer & Publisher do not necessarily subscribe to the same. Mob.: +91 9833628852 hemantgupta77@gmail.com Nayan Shetty, manager Printed & published by S P Taneja on behalf of Images Multimedia Pvt. Ltd. Printed at Mob.: +91 9814019745 nayanshetty@imagesgroup.in Modest Print Pack (P) Ltd. C-52, D.D.A. Shed Okhla Industrial Area Phase -1, Mob.: +91 9892769533 Chennai: New Delhi - 110020 and published by S P Taneja from S - 21 Okhla Industrial Area Udayan Awasthi, asst. manager S. Venkataraaman, associate Phase – 2, New Delhi.110020 Editor: Amitabh Taneja udayanawasthi@imagesgroup.in thulsi53@gmail.com In relation to any advertisements appearing in this publication, readers are recommended Mob.: +91 9819996002 Mob.: +91 9444021128 to make appropriate enquiries before entering into any commitments. Images Multimedia Pvt. Ltd. does not vouch for any claims made by the advertisers of products and services. The Printer, Publisher and Editor-in-Chief of the publication shall not be held for any Images Multimedia Pvt. Ltd. consequences in the event of such claims not being honored by the advertisers. Delhi: S 21, Okhla Industrial Area, Phase II, New Delhi 110020 Copyright Images Multimedia Pvt. Ltd. All rights reserved. Reproduction in any manner is Ph: +91-11-40525000, Fax: +91-11-40525001 prohibited. All disputes are subject to the jurisdiction of competent courts and forums in Mumbai: 1st Floor, Bharat Tin Works, Opp. Borosil Glass Works, Off. Military Road, Delhi/New Delhi only. Images Retail does not accept responsibility for returning unsolicited Marol Maroshi, Andheri(E), Mumbai 400 059 manuscripts and photographs. Ph: +91-22-42567000, 29200043/46, Fax: +91-22-42567022 Bangalore: 523, 7th Cross, 10th Main, (Jeevanbhima Nagar Main Road), HAL 3rd Stage, Bangalore 560 075 Ph: +91-80-41255172/41750595/96, Fax: +91-80-41255182 For subscription related queries, email to: subscription@imagesgroup.in Kolkata: 30-B, Anil Roy Road, Ground Floor, Kolkata 700 029 For feedback/editorial queries, email to: letter2editor@imagesgroup.in Ph: + 91-33-40080480, Fax: +91-33-40080440 visit us at www.imagesgroup.in
  • 3. COVER STORY 46CONTENTSJULY 2012 IN THIS ISSUE26 . ..............................................Retail LaunchThe Watch That TalksDutch watch-phone brand Burg has launched its products in Indiarecently and is looking to take the store count to 20 this year30 . ....................................... Retail ExcellenceHidesign: Luxury Made AffordableLeather accessories brand Hidesign, which began as a hobby ofentrepreneur Dilip Kapur in 1978, has become synonymous withaffordable luxury36 . ............................................. Entrepreneur Technology: The Great EnablerSweet Taste of VinegarVarsha Bhawnani, Owner, Vinegar Fashions India, tells her storyabout how she created a successful apparel brand Can Retailers today survive without54 . .................................................Technology technology? The answer is a clear no.Hottest Retail TechnologiesAneesh Reddy of Capillary Technology lists 10 hottest retail Technology is a formidable force multipliertechnologies that can give retailing a boost that helps retailers take better business decisions, cut costs, increase operational60 . .................................................Technology efficiency, and boost the bottmline. It isDriving Efficiency Through Supplier Collaboration now a necessity, not an optionSuccessful running of a retail business to a large extent depends on aretailer’s ability to complement his suppliers’ core capabilities, saysShijo Sunny Thomas 88 . .......................................................Column64 . ..................................................Technology What is Your Tech Adoption Index?Magic of Mobile The key to harnessing technology in retail is to think beyond what isRetailers should begin acknowledging mobile phones as the most being offered by the vendors, says Harminder Sahnipowerful tool ever for retailing and integrate these in the retailenvironment, says Girish Khare 92 . .......................................................Column Retailing in Tough Times BS Nagesh argues that carefully managed property, inventory, and68 . .................................................Technology customer are the key to survival for retailersTechnology in Fashion TradeTechnology adoption has become a necessity in fashion industrywhich is influenced by the spoilt-for-choice customers R EGULARS70 . ..........................................................ProfileWatch Out for EthosThe Chandigarh-based Ethos Swiss Watch Studios plans to 12 . ........................................National Updatesstrengthen its position as the largest retailer of luxury watches in 20. ..............................................New Openings .India. What makes it tick? 96. ................................................ Store Design .78 . ......................................................... Report 100. ........................... Personality of the Month .What do Online Buyers Look for in Websites?Priya Mary Mathew highlights the most valued attributes of a website 102 . ......................................Situations Vacantbeing looked by online shoppers in India. 104. ...........................................................Index .
  • 4. cover story Technology:The Great EnablerBy Priyanka Dasguptacan retailers today survive without technology? the answer is a clear no. as the customerbase of retailers goes up and they expand in scale, there is no alternative to technologicalinnovations to stay ahead in the marketplace. technology is a formidable force multiplierthat helps take better business decisions, cut costs, increase operational efficiency, andboost the bottomline. is technology expensive? the up-front acquisition costs may behigh, but in the long run, it proves to be quite cost effective because of the return oninvestments it provides to the retailers46 . images retail . july 2012
  • 5. cover story The Indian modern retail, though managers are increasingly diverting used by larger retailers in India isstarting from a small base, is on a a significant amount of their budget ERP (enterprise resource planning),rapid growth trajectory. Driven by a and resources towards technological followed by store inventoryslew of factors, the sector is pegged upgradation and adoption of latest management.to grow at 30 to 35 percent year-on- hardware and software programmesyear in the foreseeable future. While to increase efficiency and deliver a lowering costs throughmultiple modern retail formats are better customer experience. Without technologymushrooming across the country, doubt, technology has emerged as a To a large extent, the business ofunorganised retailers are also fast competitive tool and key differentiator modern retail is driven by priorsprucing up their act to compete in Indian retail and encouraged a planning and effective execution. It isbetter. Since the industry operates on dramatic shift in the mind-set of the also constantly evolving in step withwafer thin margins, the key to survival country’s retailers. the changing consumer expectationslies in optimising resources and A recent study by the Retailer’s and behaviour. Says Shijo Thomas,maximising customer satisfaction. Association of India (RAI) has Industry Lead, Retail & CPG, at Fujitsu Over the years, as retailers have estimated that modern retailers in Consulting India: “The evolution ofgeared up to meet the increased India would invest about `13,668 modern retail is not only towards thecompetition in the market and the crore by 2017 towards technology consumer side but also towards theheightened expectations of the solutions for cost control, opportunity suppliers and operational partners. Forcustomers, technology has kept assessment and risk minimisation. the critical functioning of a retailer, it is important for him to have a sense of visibility and operational control. Any retailer who has achieved this operational efficiency can derive immense cost benefit that eventually would affect his bottom line.” This sense of visibility and control in retail operations can be brought about by technology which can help lower the costs substantially. Explains Thomas: “When we talk about things like supply chain, store management and managing the work force in a business like retail, a major chunk of the costs of a retailer goes towards operations. The idea is to minimise this cost while maintaining maximum visibility and control. This is where technology comes in to lower the operational costs of a retailer.” Echoing these views, Indranil Guha, Additional GM and Head,A typical modern retailer in India is estimated to spend around `1.55 crore on IT products annually IT Integration, with the Kolkata- based retail chain Spencer’s, arguespace with the developments and that technology is very importantevolved rapidly to support the in today’s world of cut-throatgrowth of modern formats. In fact, According to one competition and low margins. “It hastechnology has emerged as the key estimate, Modern emerged as the key differentiator.enabling factor helping retailers stay retailers in India would Without constant innovations on thea step ahead of others and increase technology front, a retailer just won’t invest about `13,668profitability. be able to run his business,” he says. Says an industry analyst: crore by 2017 towards Vikrant Pal, General Manager,“Consumers have started expecting technology solutions to Business Improvement, with themore bang for their buck and a gain a competitive edge national electronics chain Croma,higher level of service, so no modern asserts that without technology oneretailer worth his salt can neglect the It has also discovered that on an cannot handle retail operations atimportance of technology in day-to- average, a modern retailer in the all. “Technology is the key to anyday operations.” This is a fact not country spends around `1.55 crore retail strategy. If this crucial elementlost on the Indian retailers. A few on IT products annually. The most is missing from the retail operations,forward-looking entrepreneurs and prominent technology solution the retailer cannot think of scaling July 2012 . images retail . 47
  • 6. cover storyup and optimising or maximising tale to tell. “From our experience of tech filehis ROI. Without technology, one working with more than 800 retailerscannot do any of these things on the across the globe, we have seen thatharder aspects of the business. Even in many ways the Indian retailers arethe softer aspects such as customer actually much more technologicallyengagement and increased footfall are up-to-date compared to many largenot possible without technology,” he retailers across the globe,” he says.explains. “The reason is that modern retail is However, the level of awareness just a decade old in India, and moston a retailer’s part about technology large retailers in the country have setoften depends on the size and scale up shop over the last five-six years.of his business – the larger a retailer This has given them the opportunityis, the more aware he usually is about to set up greenfield retail venturesthe benefits of technology. But in using the latest technology that hassome big retail chains in India, the IT become available in the past decade, Spencer’sdepartment is still considered only as thus allowing them to leapfrog to the At Spencer’s, technology has enabled thean enabler, not as a crucial business global standards.” availability of previous day’s sales figures (pan-partner on par with other departments This, he adds, is not the case with India, classified to article and store level) to reachsuch as sales, procurement and many international retailers which target recipients through automated SMS andinventory management. “In many have been in this business for more email in the morning. The Auto Replenishmentretail companies, the IT department than two decades and are forced to System (ARS) generates automatic purchasecontinues to function under other continue with legacy applications orders that get emailed to vendors, indicating quantity and time of delivery suiting vendordepartments such as finance. This to in which they have sunk a lot preferences. The earlier manual ordering often used to lead to either excess stock or stock-out. “Our Auto Replenishment System pre-checks the vendor’s ARS improved availability of SKUs at the stores consignments for errors and auto approves, thereby reducing the wait time at our warehouses.” – Indranil Guha, Additional GM & Head, IT Integration, our company needs to capture Spencer’s accurate customer information since we also do home delivery of products. Our customers have to be given a choice as to when they want thea large extent limits awareness about of money. Since they have been purchased goods delivered at theirwhat technology can do to benefit using older technology for many homes, the demo and installationretail operations,” says Thomas of years, they now face challenges in – the things typically associatedFujitsu Consulting. upgrading to newer solutions. “For with home delivery. Our custom- These attitudes are however instance, a global retailer might use made port allows us to enter all thischanging, with retailers now taking modern technology in many of their information when we are billing thea keen interest in technological customer-facing applications, but their customer. That is not the standardinnovations such as enterprise class backbone could primarily be based mode in which retailers operate. Thisapplications and solutions to better on mainframe computers, which is application we have built for ourselvesmanage the customer base, expand a legacy application. If you compare on our own,” he says.nationally and diversify the product this scenario with the Indian retailers, Croma has a delivery systemrange. Says Thomas: “Not only the you will find that most large players integrated with the vendor. Thelarger retailers, we are also seeing the are using the latest enterprise class company puts the stock at asmaller state-level retailers having applications in different areas of their vendor’s location. As and when anot more than 10 to 15 stores being business,” explains Thomas. customer buys a product, the vendorvery keen about using technology for Pal of Croma could not agree more. automatically gets a purchase order.work-force management and customer The retail chain uses the same basic “We can pick up the product directlyloyalty, which are traditionally the technological structure for its stores from the vendor and deliver it to theplaying field of bigger retailers.” as most other retailers. “We have customer. This cuts our inventory a core ERP system which has got holding because we are able to makeNew Innovations functionalities such as merchandising, a purchase order to the vendor asMany people think Indian retailers HR, and finance built into the soon as a customer buys any productare somehow slower in adopting solution. This kind of system most from our store. This is done online,”technology in their day-to-day other retailers also use. However, on says Pal.operations compared to their global top of this, we have built our own Croma has also moved awaycounterparts. However, Thomas of port which we operate in our stores. from the traditional method ofFujitsu Consulting has a different This is a custom development because stock replenishment and delivery,48 . images retail . july 2012
  • 7. and upgraded to a new they reach the companytechnology-based system. warehouse. This drasticallyThis has cut its inventory reduces the wait time of thecost by about 25 percent vendor at the warehouse.and its EBITA by about For customer engagement,60 percent, according to loyalty and retention,company officials. Spencers is using a web- Says Pal: “Earlier we used based CRM applicationto follow a min-max system system. For the back-endat our stores, like most other operations, logistics andretailers. This means that for store operations, the foodany product, say a laptop, and grocery retail chainyou carry four pieces as has deployed SAP and amaximum and two pieces few other web applications,as minimum in inventory. while it uses SAP BI systemSo you will always have for analytics.four pieces in stock, but Industry experts sayif the cost of the product there is still a great dealcomes down, then you of opportunity for Indiancan source two more. This retailers to leveragewas our regular mode of technology to gain aoperation which remained competitive edge. “Asfixed even when the sales retailers continue toof the product fell. There expand in multiple productwas no proper method by segments as across thewhich our replenishment tier II and III cities, theysystem could follow the should invest in technologybuying pattern of customers. to create visibility in theirWe have now completely operations,” says Thomaschanged that system and of Fujitsu Consulting. “In amade it elastic. Depending large country such as India,on how the customers are retail segments like food andbuying a particular product, grocery are evolving at athe solution automatically rapid pace. Retailers shouldincreases or decreases really look at some kind ofthe stock.” maturity and technology Spencer’s uses advancement in creatingERP solution from visibility in the food supplySAP, with other web- chain. This is the area wherebased applications many foreign retailers haveintegrated for specific scored extremely high.”purposes. The company Some Indian retailershas introduced a “vendor are trying to use businessportal” – an interface analytics to identify coststhrough which its vendors across the enterprise andcan log into its system to optimise their businesscheck information about processes. They arethem with respect to sales, increasingly looking atstock, status of invoices, technology solutions foretc. This can be drilled improved decision-making,down right to the individual better efficiency andstore level. Spencer’s also enhanced productivity.uses something called However, on the other end,ASN (Advanced Shipment many mid-sized retailers areNotice) which is an still in the process of puttingapplication by which a a transaction system in placevendor’s consignments that includes a POS system.are pre-checked for errors Industry analysts say thisand auto-approved before should be followed by
  • 8. cover storysystems for merchandise management Web interface in one way or the other loyalty initiative can be launchedand customer relationships. Later, to reach out to current and potential with a far better understanding of thethey should invest in supply chain customers. Mobile-based solutions consumer-buying patterns.and logistics management systems are expected to cut cost and increase National retail chains such as theas well as business intelligence and efficiency of retailers but investment Future Group, the Landmark Group,analytics software, thus completing on these technologies take a slightly Reliance Retail and other playerstheir technological upgradation. longer time to show actual returns. are extending their loyalty card The need to adopt suitable In principle, the mobile customer programmes by adopting SMS-basedtechnology solutions is being driven engagement programmes are quite marketing campaigns. For example,by business dynamics. Retailers simple – the mobile number of the Lifestyle chain of stores allows itsare using technology applications the customer is used as the main customers to accrue and redeem pointsfor managing loyalty programmes, customer key, leading to simplicity through a simple SMS without theinventory management, supply chain of customer engagement. It enables need of physical cards. Apparel storesmanagement, security solutions, data uniquely identifying a customer, such as Chemistry and the beautyrepository and management, etc. to communicate with them easily and retail chain NewU have also adoptedget the basic technology infrastructure cost-effectively, and authenticate the same mobile mechanism, totallyin place. They are also beginning to while rewarding – the three most doing away with plastic loyalty cards.move from card-based offline loyalty critical aspects of the customer Social networking is anotherprogrammes to mobile-based real-time interface for any loyalty programme. medium which the Indian retailerssolutions since the cost of issuing By combining this with real-time are actively leveraging. They arephysical cards is going up. communication, mobile vouchers, and using online portals – exclusive or point-of-purchase analytics, the simple otherwise – to reach out to theirmobile and social media concept of mobile engagement can targeted audiences, making themThe increasing popularity of mobile become a potent weapon for a retailer. feel special by offering deals basedphone technology and social media The most important aspect of using on an understanding of their uniquehas revolutionised how retailers mobile CRM is to vastly increase the preferences. Retailers mostly use theconnect with customers for marketing customer base. According to research data generated through the customers’their business. Industry watchers by the technology product company transaction history to make new offersreckon about 20 percent of modern Capillary, most mobile-based CRM to them.retailers in India are using mobile and tech file “We want everybody in our company to hook on to the cloud and work from there. That’s our technology vision for the next two years.” – Vikrant Pal, GM, Business Improvement, Croma programmes are able to sign up as Needless to say, this trend has high as 80–90 percent of customers as spilled over into the mobile space as against 10–15 percent in card-based well. For instance, if a shopper has the programmes. The operating cost of Bluetooth functionality on his mobile a card-less programme is close to phone turned on and he happens to zero, cutting out the cost of cards, the walk around leading malls in Delhi, effort in logistics and management, Mumbai or Bangalore, he would Croma paper-based forms and data entry, automatically be “fed” promotional Electronics retailer Croma has developed a relying on m-vouchers for gratification offers from individual stores in customised port. Customer information fed and SMS/email for communication, the vicinity. As he walks up to the into it on the point-of-sale flows to a business thereby generating massive ROI next floor, the offers would change intelligence platform. The captured information on investments. It is also quite depending on the location and time of pertaining to the customer is quite accurate environment friendly. the day. Some would argue that this is because of the home delivery of products. The One of the key benefits of mobile an intrusive technology, but the fact chain has a detailed data of its customers CRM is that a retailer can launch a remains that Indian retailers are now numbering about 1.4 million. Its marketing simple engagement scheme with data learning to intelligently target their department has a dedicated person who keeps mining data on a regular basis and looking at the capture without a formal points-based customers using a variety of devices psychographic and demographic positioning of the loyalty programme, such as a simple and solutions. customers. Based on this, customer-engagement seasonal milestone programme. After offers are generated. studying the programme for a few is technology expensive? months, a well-modelled points-based Whether any IT solution appears50 . images retail . july 2012
  • 9. cover story The technology available to the retailers is not expensive considering the return on investments it providesexpensive to a particular retailer Croma on its part is makingdepends on the scale of his business. significant investments towards itsAccording to Sunil Pandkar, Head, technology spends. Says Pal: “WePortfolio Management, Fujitsu spend close to .7 to .8 percent of ourConsulting India, if a retailer budget on information technology. Onchooses an IT application and the transformation projects such as newcorresponding hardware depending on initiatives and innovations, we spendhis scale of operations and the future close to .2 percent of our revenueplans for expansion, and manages to every year on improvisation.” At thestrike a balance between these, he will end of the day, technology has toget an excellent return on investment. subscribe and adapt to the unique He explains: “Sometimes a small nature of the retailer’s business. But atretailer goes for world-class IT the same time, to realise the benefitssolutions which are expensive. On of technology, retailers need a lot ofthe other hand, many retailers who business discipline and operationalhave got into a big scale of operations consistency.often settle for low-end IT solutions Says Thomas of Fujitsu Consulting:and products in certain areas due “In many cases, the expectationsto budget constraints. It is not only of a retailer from technology arethe question of understanding huge. We need to understand thattechnology – it is also about matching doing a business like retail in Indiathe right technology with the scale is extremely complex because ofof the retailer. For retailers in India, the diverse demography. In manythe scale keeps increasing with time instances, particular businesses end– that is what we have observed. up customising themselves to suchSo we can say that the technology an extent that it becomes difficultthat is available to the retailer is not for technology to adapt to that kindexpensive considering the return on of complexity. That I feel is theinvestments it provides.” biggest challenge when it comes to July 2012 . images retail . 51
  • 10. cover storyadopting technology for a retailer. into the store. WeIn terms of the expectations of the want everybodyretailer, choosing the right technology to hook on to theaccording to the scale of the business cloud and workis crucial.” from there. That’s our near-term visionfuture in the technologyAs far as the latest developments in space over the nexttechnology are concerned, a lot of two years.”interest is being generated among Despite all theIndian retailers for open-source challenges thecloud-hosted solutions. When they Indian economyexpand rapidly, the cloud can provide is facing today,them the ability to derive incremental industry expertscost savings in terms of operations, feel modern retail The rising customer base is driving the adoption of technology by retailerscustomer base and business division. in India is going toSays Thomas of Fujitsu: “Open sustain itself and grow further, driven “This is a population with extremelysource has always been a favourite, by the billion-plus population of the complex demographic characteristics,not only among Indians but also country. Technology adoption by so some of the buzzwords we areretailers globally because of its cost- retailers will be governed by business hearing from retailers around theeffectiveness. We are seeing a lot of decisions that will cater to such a world include the term ‘big data.’retailer interest in business solutions, huge number of customers. This is because a huge amount of data is being churned out from “Technology helps in minimising costs of a retailer while customers and operational activities maintaining the maximum visibility and control of retail of retailers in India,” says Thomas operations.” of Fujitsu Consulting. “The country – Shijo Thomas, Industry Lead, Retail & CPG, Fujitsu is going to be an exciting case study Consulting India for technology-intensive areas. The reason is that the technology play from ‘big data’ allows retailers to rapidly make decisions on anirrespective of the platform and the tech file extremely voluminous and complextechnology they are built on, because data. In a huge consumer base likesolutions ultimately provide value to India that is doing transactions acrossthe business division.” multiple locations and complex Guha of Spencer’s says the demographic characteristics, retailerscompany may deploy the warehouse need to quickly analyse the data andmanagement system (WMS) module take business decisions.”of SAP’s ERP solution, leading to India would also see modern retailbetter supply chain management at penetrating into tier II and III citiesall its stores in the near future. “We in a big way in the coming years.may also adopt technologies such as The retailers would need technologythe HANA appliance software of SAP solutions to gain operational visibilitywhich aggregates huge amount of data at these locations, learning fromfor very fast computing. We may also international retailers which useupgrade our POS software platform Ethos technology more efficiently, resultingleading to faster customer checkout at Swiss watch retailer Ethos, with its strong in healthy bottom lines and morethe POS counters,” he adds. customer focus, wanted a business solution to satisfied consumers. Further technological upgradation integrate all its stores and processes acros India. Looking at the middle-classseems to be the future agenda of The management also needed real-time access to growth and consumption patterns inCroma as well which has identified critical information that could empower them to India, retailers here have a uniquetechnology as a major force multiplier. take informed decisions. To support effective and opportunity to embrace technologySays Pal of Croma: “We are trying precise operations, Ethos was looking for single in an innovative manner, thereby solution with modules for sale, purchase, finance,initiatives in the field of mobile improving their services, increasing and inventory so that all retail operations couldphones. We would want to give profitability and bracing themselves be managed centrally. A company called LS Retailcustomers flexibility of paying at the helped Ethos standardise process flows such as more effectively for the heightenedspot where he purchases a product. internal location transfers, serialise items, back competition once FDI in multi-brandHe need not walk to the cash counter. office control, and inventory look-up. retail opens up.We don’t want to keep any hardware52 . images retail . july 2012
  • 11. technologyDriving Efficiency ThroughSupplier Collaboration In a negotiation-oriented relationship such as that between a retailer and his suppliers, a practical and incremental collaboration approach is required, driven by business discipline and aided by a flexible technology platform. in order to build a holistic approach towards supplier collaboration, a retailer should take gradual steps towards identifying multiple collaboration levels where each level satisfies a definite business objective By Shijo Sunny Thomas the retailer’s confidence at customer checkout. Successful retail execution depends immensely on a retailer’s ability to complement the supplier’s core capabilities with a timely and decision-enabling insight into all points of the product path within theSuccessful retail execution depends on a retailer’s ability to complement the supplier’s core capabilities retail value chain. The benefits of such collaboration At a recently concluded gathering a baby step towards establishing an were traditionally perceived to be onlyfor retailers in India, those present initial level of trust and a precursor for the purchasing functions of a retailwere asked about the supplier to larger supplier engagements with organization. That is the reason whycollaboration initiatives taken in their a vision to increase revenues and most retailers look at collaborationorganizations. For many, supply chain market share. as an automated transmission ofcollaboration implied automation In an execution-driven business purchase orders, delivery notes,and dissemination of transactional such as retail, there are two invoices, etc. In order to build ainformation to their supplier base. relationships that are sacrosanct with holistic approach towards supplierFor some, the collaboration efforts customers and suppliers. Customer collaboration, a retailer should takewere towards sharing sales and behavior towards a retailer’s product gradual steps towards identifyingstock dashboards. A common and service assortments represents multiple collaboration levels wherepremise across many responses was the moment of truth for the retailer each level satisfies a definite businessthat collaboration was equated to and is the result of an arduous retail objective. For some, the ideal levelsautomation and was an initiative to planning and execution exercise. could be to first establish visibilitylower administrative costs. However, Suppliers in turn focus on product in certain business areas and thenfor a large group of retailers, the innovation, pricing, branding and to increase profitability and demandcurrent levels of collaboration were timely shelf availability, thus boosting forecast accuracy.60 . images retail . july 2012
  • 12. technology In addition to the suppliers, Take the example of a large multi-pronged approach. The first isequally important stakeholders health and beauty retailer which is to induce discipline into the supplier-in the supply chain collaboration planning to organize a campaign for facing business functions and theare the various departments of a its entire range of makeup products. second is to employ technology thatretail organization. The buying The campaign includes product subscribes to the discipline. This isor sourcing function becomes the promotions in the form of discounts, easier said than done. More thankey stakeholder and owner of the additional loyalty points on purchase, often, retail organizations followsupplier relationships. Supply chain in-store beauty services, special different processes for differentneeds to be involved to maintain display units, etc. in stores. The buyer merchandise categories or geographicdiscipline in inventory storage and sends out an email to all relevant regions. Some of these are warrantedmovement throughout the chain suppliers on the impending campaign by the peculiar nature of each of thefrom supplier to store or customer. and asks them to submit the range of merchandise categories. At the sameFinance has a role to play not only products and the applicable promotion time, there is a lot of opportunity tofor accurate payables but also for offers. All supplier-submitted streamline and define a consistencysupplier receivables in the form of promotions need to be circulated to to the processes across merchandiseclaims. IT is needed to orchestrate marketing, store operations, supply categories and geographical regions. Technology forms a collaboration- enabling layer across a multitude of retail business functions. Commencing from a basic model making use of emails and data templates, retailers can establish transactional communication for activities such as item on-boarding, price updates, and promotions. This approach will work for smaller retailers with limited merchandise categories with a shallow depth of products supported by a few suppliers. As the number of SKU’s, suppliers and geographical footprint of a retailer increase, it puts a strain on the supply chain visibility and service levels. This situation calls for a totally different level of automation of the retail processes. Retailers have a plethora of technology options available today for supply chain collaboration. A fundamental feature across these isRetailers have a plethora of technology options available today for supply chain collaboration that the supplier-facing application is integrated to inventory, finance and merchandising data hostedin order to drive collaboration within the enterprise within a retailer’s internal applicationand with the suppliers, retailers need to adopt a multi- landscape. Suppliers can securelypronged approach view and respond to information from the retailer’s internal applicationsall processes in the respective chain and the finance departments. using public applications such asapplications and is the enabler to The campaign needs to be executed, Web browsers. The integration of thethe business. Visual merchandising the stock shelved in stores on time, collaboration layer with a retailer’sneeds to be in the loop for display the sales lift monitored and supplier ERP is the most key, crucial andunits and space plans provided by the claims submitted along with the critical aspect of any IT initiativesuppliers, a feature which was once proof of sale for the hit on margins. towards supply chain collaboration.the mainstay of fashion retail but And this is just one of the many The options available for integrationnow can be seen even in consumer possible business functions where are many and should form a keygoods. In summary, the entire retail collaboration could drive profitability parameter while evaluating technologyorganization needs to collaborate and efficiency within the retail chain. options for supplier collaboration.alike, internally with each other and In order to drive collaboration Some retailers opt for customexternally with the supplier base within the enterprise and with the portals where they gradually buildacross various business functions. suppliers, retailers need to adopt a supplier facing functionality over July 2012 . images retail . 61
  • 13. technologytime which are designed to work consistency at a low TCO, minimum such as new product developmentwell on current processes. Addition administrative complexity and the and introduction, sharing rangeof new business functions requires highest scalability. Every retailer’s attributes for suppliers to proposea fresh dose of engineering. Often, business processes, organization assortments etc. Buying activitieschanges in processes and integration structure and ERP application such as contracts, product informationrequire an element of re-engineering. are unique in nature. The best management, product price updatesThere is also the option to use work collaboration layer will need to and supplier performance scorecardsflow platforms to build supplier adapt itself to these unique retail can be collaboration-enabled.collaboration applications. Using requirements in the least possible Purchasing, distribution and payablesthese, retailers can build specific time. Therefore, the most imperative are already the most technology enabled area where retailers have introduced technology to provide visibility to suppliers into the purchase to pay processes. A growing interest is being witnessed in enabling supplier visibility into point-of-service areas such as promotion effectiveness, sales and stock reports, loyalty information, etc. The technology option chosen by the retailer should not be restricted to a few business functions; instead it should allow retailers to climb the collaboration maturity ladder in the shortest time. At each rung of the collaboration ladder, a retailer will need to measure the impact of collaboration on each of its business areas through well-formulated KPI’s. For the planning functions, demand volatility can be address through collaboration, resulting in predictive replenishments. Supply chain lead times can be improved leading to faster time to market. Finance The best collaboration layer needs to adapt to unique retail requirements in the least possible time can optimize the working capital requirements by arresting revenueprocesses and integrate them with leakages and optimizing payables.their ERP applications. There are Supply chain Suppliers and the merchandisingsome extremely robust and flexible collaboration is about department can collaborate to deviseplatforms available in the industry moving from a “need- and implement more effective andtoday for this purpose. profitable promotions. to-know” visibility into A third option that a retailer can In the end, supply chainconsider is the best-of-breed ERP information to building collaboration is directed at creatingapplications that offer supplier incremental trust across value for the customer. It is aboutcollaboration tools as extension to the retail value chain retailers and suppliers transitioningthe ERP application. These tools offer from a “need-to-know” visibility intoprocess coverage of business functions value that a retailer should demand, information to building incrementalin the planning and buying areas demonstrate and derive from trust across the retail value chain.of retail which work well with the technology is whether it fits theirrespective ERP applications. business and technology landscape A point that retailers should keep and the time-frame required to do so. ABOUT THE AUTHORin mind while evaluating technology Process coverage is another Shijo Sunny Thomas is theoptions to enable collaboration is important parameter. Retailers Industry Lead (Retail & CPG) atthat retail is not a process-intensive can induce collaboration across a Fujitsu Consulting India. He hasindustry like banking and telecom. wide area of business functions. spent over nine years associatedThe priority within the retail business In the planning area, retailers and with the consumer retail industryis to bring visibility, control and suppliers can collaborate in areas in India and other geographies62 . images retail . july 2012

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