This document discusses how technology is enabling changes in the retail industry and consumer behavior. It addresses some common myths and fallacies around technology investments. The key points are: 1. Technology is enabling fast changes in consumerism and retail by empowering consumers and altering expectations. Retailers must leverage technology to adapt. 2. While some factors are outside retailers' control, technology gives them control to convert threats into opportunities. Front-end and back-end technologies are both important. 3. Common misconceptions around IT capabilities, ambiguous returns on investment, data security in the cloud, and control must be addressed to successfully leverage technology. Experts can help optimize investments and implementation.

3. Table of
Contents
1 Technology is the only lever to manage
change
4 Fallacies – Managing Myths
- My IT team can manage the deployments
- Ambiguous ROI
- Compromising security and loss of control on data over
cloud
- Geared to handle social media and internet
- Maintaining the front-end technology matters the most
11 Utopia – Glimpse into next generation retail
- Customer’s point-of-view
- Retailer’s point of view
- Expectations from ‘Next Generation Retail’
15 Research Findings – State of Technology
readiness to take over opportunities
29 Be Aware, Act Now

4. 1
Technology is the lever to
manage change
The pace of Indian consumerism is
fast changing gears and it is propelled
by important factors that augment
tantamount growth and equivalent
challenges for the retail industry. If
recent elections are to indicate any
change in how internet or rather social
networking over the internet is
impacting the decision making of the
netizens then businesses cannot
afford to ignore its impact and they
need to take the cognizance to
channelize this opportunity. In fact
researches indicate on how
technology has played a pivotal role in
not just arming the consumers with
the devices and infrastructure to
carry out shopping in multi-
dimensional manner but even how
consumer expectations and
behaviour is being modified with the
impetus of social networking.
Consumers have become fast,
collective opined, relatively impatient
and spoilt with choices. Amid this fast
evolving ecosystem, retailers are
challenged to delight customer and
mitigate their cost associated with
market and operations. Many
organized retailers are transforming
their existing operations and
introducing new formats to balance
their objective of expansion and
internal improvement that can provide
sustainable growth across various
customer touch-points over period of
next few years.

5. 2
A closer look at the above PEST matrix
(Exhibit 1) encapsulates that while
factors emanating from Political,
Economic and Social are beyond
anyone’s control however, Technology
is the only enabler that gives control to
retailers to convert this combined threat
into opportunity. Viewing it from
perspective of Porter’s five force there is
a considerable need to amplify the
cutting edge technology at front-end that
can help retailers to know about their
customers and gauge the buyers’
sentiments through detailed analysis.
Further this real-time information should
be able to provide the action items that
not only help them cater to their target
segment but proactively analyze
customer needs and preferences for the
development of cost effective market
collaterals. In parallel, to avoid any
leakages from the operations and
supply chain they need to equally invest
into complementary back-end solutions
that does all the heavy lifting resulting
from the consumer pressure at the front-
end.
Coupled with competitive advantage
that technology provides to the
incumbents, an apt solution also serves
to manage the suppliers well resulting
into saving that can be invested back in
improvising customer experience. Retail
ecosystem has witnessed disruptive
technologies and has made possible for
consumers to engage through multiple

6. 3
channels therefore, for retailers having
omni-channel presence and managing
various touch points become essential
as otherwise consumers may opt for an
alternate channel e.g. whether you have
on-line model, brick and mortar or hybrid
there is always a substitute for
consumer to transact and shop. Hence,
for negating the impact and for retaining
the customers, a sound technology
deployment is needed.
A quick snapshot of the retail industry
suggest above average market growth
in India that is being fuelled by favorable
demographics - a young and working
population, rising income levels,
urbanization and growing brand affinity.
India’s retail market, in 2014, was
estimated at US$580 billion and is
expected to grow at a CAGR of 13% to
reach around US$950 billion by 2018.
Organized retail is expected to clock a
19-20% p.a. growth to reach US $95
Billion. Traction from tier-II and III cities,
improvement in retail models and
operations, coupled with movement
from unorganized to organized trade are
acting as catalyst for this phenomenal
growth. The contribution of retail
industry on our economy remains
significant as it contributes around 14%
to the GDP and employs around 7% of
the total population.

7. 3

8. 4
Fallacies – Managing Myths
In 2014, leading retailers on corporate level are emphasizing on financial profitability as
their top agenda while they continue to bat for store profitability, productivity
enhancement and better inventory management. The retailers are keeping major costs
such as logistics, supply chain and manpower in line with the revenue to ensure
profitable growth of the business. For retailers 2014-15 will be a year of balancing
growth and profitability. However, while they are clear on priority, much deliberation is
needed on how to achieve this golden equilibrium. There are few popular
misconceptions that should be busted in order to understand successful outcome.
FALLACY 1: Internal IT team is
competent enough to handle
technology deployments
It’s an ongoing endeavor for CXO’s
to get the best bang for the buck
when it comes to technology – few
concrete outcomes from technology
can really tilt the scale towards their
decision making and justify the
business case in front of the board
members. However, there is a
challenge in proving ROI for the
incremental deployments and any
lack of it would mean lag in
competitive advantage for the
organization even if significant
investments have been pumped.
Many retail organization in their
technological maturity curve will fit
under this chasm where it implies
stretching beyond means to justify
your investment. In the fast paced

9. 5
ecosystem where competitive
advantage is the pivot to shift the
customers’ opinion, should retailers
risk the delay until any noteworthy
solutions are to be deployed? To
tackle this egg and chicken situation
retailers really need to start thinking
this as continuous investment and
leverage the expert technology
providers who are better trained due
to their multi-client experience in
highlighting the total economic gains.
Actual support from your provider
does not come from mere solution
deployment but in consulting with
them. It also gives you a chance to
know their specific domain expertise,
their knowledge and competency
around the best practices and
deployments. Many a time -
technology investments would not
give the desired yield simply
because the manager budgeted for
the solutions, but not as much on the
consulting and management
services that can prove to be fatal
leap. To increase the probability of
success, the first consideration
should be on the consulting and
management capability of your
technology vendor.
FALLACY 2: Ambiguous ROI from
technology deployments is my
concern
“If you can’t measure it, you can’t
manage it”- Is ascertaining ROI on the
technology deployment a chronic
concern? Answering the questions
pertaining to straight cost and returns in
monetary value is easy. However,
understanding effectiveness measures
can make it further complex by
involving activity cost and other
parameters, while efficiency questions
requires information on whether the
project will produce the greatest
possible value relative to its costs?
Establishing that a particular result is
the best of all possible outcomes
requires examining many alternatives
or simulating performance in some way
that gives a valid picture – your past
experience to handle deployments and
tracking them might have been a
triumph but whatever was successful in
the past might just turn out to be
mediocre in current times. Though
organizations have established KPIs to
show the impact but this can be made
fairly simple by letting your technology
partner assist in doing the same while
your organization can continue to focus
on its core competence.

10. 6
FALLACY 3: On Cloud, security and
privacy of data is compromised due
to loss of control as data is sitting
outside my premises
Be it with on-premises or cloud network,
no one can provide 100% security to
your data. However, contrary to notions
cloud provides better security as it’s
segmented and have encrypted
environment. Since resources in cloud
are generally distributed over many
servers, hence the multi—location has
a structured and planned protection
with reasonable level of security
compared to putting it out on a single
storage point. If there are any further
concerns then an on-premises back-up
system for super critical data can be
established to handle any eventuality.
Further if any iota about ‘loss of control’
was true then the growth in the
deployments over cloud would have
never been a reality and business
models of technology giants would
have crashed three years back. In
many ways, over cloud you have more
control even beside data because the
service, platform or infrastructure is
standardized and controllable through
APIs. The fears are true only to an
extent of losing control over the
software versions being upgraded by
service provider (for cost
effectiveness). It’s worth taking an
inventory of the fears to weight it
against any opportunity cost that
organization might be incurring. As the
cloud gets more popular and
companies start getting more mileage
in terms of economic benefits, unfound
fear would be a smaller barrier. The rest
of the common fears about the cloud
are really the same fears we face about
any new technology.
Giving up control of IT infrastructure or
services can be a big shift in the
mindsets of the organizations. But it is
like, companies should stopped
producing their own electricity and start
buying it as a service, technology is
best when used to aid business
impacting decisions and only then the
true power of cloud will be beneficial.

11. 7
Here (Exhibit 2) are
interesting trends from the
recent survey done on 213 IT
executives from leading firms
across globe that further
revealed:
 38% are indifferent as to
whether their supply chain
management and
procurement applications were run in the public or private cloud up from 24%
previous year.
 Another 34% report they don’t care if their ERP or financial suite comes from public
or private clouds – up from 18% last year.
 34% say where their BI or analytics services comes from isn’t important, up from 18%
last year.
Fallacy 4: We are geared to
capitalize on social media and
internet
A potent cocktail of internet, devices,
e-commerce infrastructure and
social media platform is changing
customer landscape faster than
anyone can anticipate, that’s not just
changing the consumer’s
expectations but also their buying
decisions. To match the exponential
pace of user generated intelligence
and its impact on the business,
organizations need to gather all its
resources to capitalize this
opportunity. Worldwide trends from
one of the research shows, and India
being no different - that today digital
customer spends around average of
4 hours a day online, more than 70%
start their buying process with a web
search, more than 50% seek reviews
and suggestions from their network,
and more than 60% expect access to
customer service within 60 seconds!
Astounding as it may sound, more
than 50% customers expect support
through social network channels,
failure of which results in around
15% customer churn.

12. 8
Exhibit 3 sums up few
trends that would
continue to fuel the
growth of digital
customers and why
retailers need to watch
out for these
compelling factors.
Digital customers are
more prevalent and
probable to interact
through multiple
channels or are rather
omni-channel users
and they have choice to engage
across any contact point (like kiosk,
store, web or mobile), the retailers
across the globe are feeling
challenged to manage their
expectations and conduit this
growing opportunity, failure of which
is leading to mediocre customer
experience and attrition. Exhibit 4
shows up some revelation from a
research study on retailers, the
need-gap and expectations of omni-
channel customers. Therefore, for
retailers being mindful and

13. 9
controlling the investments into
technology would turn out to be
more profitable than doing the
business in conventional way. If
retailers want to capture these
futuristic shoppers, they must align
their catchment areas to create a
personalized shopping experience
that transcends across different
channels. As may be true with Indian
landscape the readiness of retailers
to handle omni-channel customers is
lower than the global average hence,
retailers must step up the pace on
this front and monetize social
networking.
Fallacy 5: Front-end solutions and
customer touch point matters the
most
Front-end optimizations are the low
hanging fruit because they are
relatively straightforward to
implement and secure the top-line. It
is very important in the ever
changing consumer landscape to
have a robust front-end so that
retailers can engage and increase
their yield per customer. However,
equally crucial is to have a strong
back-end performance since it deals
in the world of exponents. Especially
for infrastructure related
dependencies while user load
increases linearly, the inefficiency of
the system will increase
exponentially and would look like a
‘Hockey stick’ (Exhibit 5) thus,
resulting into high turn-around time
for the organization that can mean
losing opportunities and customer
base.
While the organization diligently
plans to balance the customer
centric solutions both on front-end
and back-end, there is also a need to
take employee factor into
cognizance as BYOD culture
becomes increasingly popular. While
organizations should give access to
employees on its network but they
should be equally alert about any

14. 10
susceptible areas whose efficiency might be compromised including customer data that
can have a long-lasting impact to the business.
Array of solutions can be deployed when addressing security for BYOD, from device
level (MDM) security to containerized app specific MAM technology. Your mobile
backend security strategy also needs to ensure that appropriate security and integrity is
in place before the data reaches the app. Hence, it is necessary for retailers to look at
things from the backend perspective that will allow them to address these requirements,
and with the support of an experienced vendor this can be managed effectively whether
your data resides in the captive data center or in cloud. The policy of BYOD for internal
employees also tend to complement with the investments made to manage the
customer devices that might create load on the infrastructure but in return provide good
customer experience. So while the retailers work on addressing device and app security
for the external customers and employees (BYOD strategy), they also need to make
sure that they do not leave their backend exposed resulting into pilferage of bottom line.

15. 10

16. 11
Utopia – Glimpse into
Next generation retail
Customer’s point-of-view
Ria stops at her favourite clothing
store to pick up a new outfit for her
dinner party at the weekend. Details
of Ria are available with the store
when she enrolled in their Loyalty
program, allowing the customer
kiosk at the front door to sense her
mobile phone as she enters the store
and pass her frequent shopping card
information to the store system.
Since all store executives carry a
mobile tablet, the system sends an
alert to all executives to flag Ria’s
arrival, along with her historical
interactions highlighting her
preferences. Her favourite floor
executive is alerted about Ria being
in the store, she immediately presses
a key on her mobile device to notify
all other store executives that she will
be attending her. Through the kiosk
information, executive is quickly able
to locate Ria to extend a personal
greeting. This CRM system coupled
with data analytics on a mobile
device is able help store staff to know
about their high value customers.
Ria heads to the dressing room with
her selected clothes. She likes the
skirt she is trying on, but needs it in
another size and colour. Through the
interactive RFID-enabled mirror
installed in the room, Ria can press
the display on the mirror and is able
to check the current inventory for
available sizes, colours and
complementing pieces. The retailer
is committed to present Ria with all
the appropriate choices that are
currently in the store and available
for purchase — RFID-enabled

17. 12
shelves and racks in the store
provides real-time information into all
inventory in the store. Ria selects
three items she would like to see
from inventory via user friendly check
boxes, and with a press of a button
sends the message to the floor
executive. The executive receives an
alert on her mobile device, and
notices Ria’s request for the items.
She locates two of three garments
quickly, but the third item does not
seem to be on the allocated rack. At
the press of a few buttons on a
handheld RFID reader, the floor
executive is able to locate misplaced
garment within seconds. Kudos to
RFID technology, the executive is
able to deliver the items right to Ria’s
dressing room — Ria is happy since
she does not have to re-dress and
search the floor for the items. Ria
decides to buy selected items but
would like one of the garments in a
different colour, which she is unable
to locate in her size at the store. She
speaks to the floor executive, who
scans the bar code on the item with
a mobile computer. As the store has
integrated inventory management
system hence floor executive can
access real-time inventory for all
stores and quickly locates the item —
in another store. Store associate
mobile device is also outfitted with a
magnetic stripe reader and
electronic signature capture, so she
swips Ria’s credit card and collects
her signature on the display of the
mobile computer after promising for
overnight shipment delivery to her
home. The electronic receipt is sent
to Ria’s e-mail ID and the entire
transaction is complete on the spot.
The end result - Ria enjoys the
benefits of a amalgamated brick-
and-mortar and online store. She got
the touch and feel experience that
can only happen in the physical
brick-and-mortar store and at the
same time, she enjoys convenient
one-swipe purchasing with the same
delivery service she expects from
online stores. This enhances Ria’s
experience with her favourite retail
outlet as she enjoys the seamless
transaction.

18. 13
Retailer’s point-of-view
The technology that enables
differentiating customer experience
also complements many operational
business objectives. The RFID-
enabled dressing room tracks the
items that are carried in and out of
the dressing room thus, maintaining
the log and also keeping ‘shrinkage’
in check. While the handheld RFID
reader is used to locate the missing
item that can enable a complete
inventory of the entire store stock in
minutes as otherwise this data could
take many days to compile. From
tightly integrated CRM and Inventory
management systems that provides
real- time information, retailer get
visibility into stock movements
(indicating buying patterns of the
customers) based on which they can
manage their shelf better and make
quick decisions to replenish the
required inventory thus reducing the
undesired investments.
The benefits of real-time inventory
dovetail with the supply chain
effectiveness in the form of more
prompt and refined orders thus,
allowing retailers to better manage
their suppliers and fine tuning the
manufacturing schedules. The back-
end RFID enabled warehouse
management system makes sure
that material /stock movement is
optimally distributed between
different stores as per the logged
requests. This results in short
turnaround time thereby, reducing
loss of opportunity and minimizing
the cost of logistics. Since orders can
be fulfilled more rapidly, retailers can
enjoy more inventory turns: smaller
orders can be placed more
frequently, allowing the retailer to
maintain an optimum stocks at store
and yet respond instantly to
consumer buying trends and
patterns. From this neat integration
of technology enable systems,
consumers enjoy a consistently
great selection of merchandise that
will increase the likelihood of a return
visit in future.

19. 14
Expectations from ‘Next
Generation Retail’
Fulfilling the expectations and
providing a consistent ground breaking
experience to customer can be taxing,
if not backed up by an appropriate
technological solution set. To get
proper grasp we need to look at the
factors (Exhibit 6) revealed through a
research that highlights the customer
pain-points while visiting retail outlets.
In another observation, Indian
customers were researched about
what characteristics do they attribute to
‘Next-Generation Retailer'. Three
factors were formulated (namely
technology, innovative format and
customer centricity) with the mix of 14
different variables. The findings
highlight the top 5 characteristics
(marked below) that they associate
with the next generation retail wherein
at two places technology plays an
active role and at others it becomes an
enabler.
1. Must Exceed Customer
Expectations (Customer centricity)
2. Must have Electronic Billing
(Technology)
3. Should have attractive visual
merchandizing (Innovative format)
4. Speedier Processing at the store
and delivery (Technology)
5. Providing rich customer
experience (Customer centricity)
Like stated at the beginning of the
report, out of 4 factors of PEST
(political, economic, social and
technological), only technology is the
factor that help retailers control or
manage other three factors to their
advantage hence, next generation
retailers should get hands-on with
the high impacting technology by
acquiring reliable service provider.

20. 15

21. 15
Research Findings -
State of Technology readiness to take over opportunities
From the research, majority of retailers seem to be positive about the economic situations
over the next year and apparently macro situation does not seem to be a cause of
concern. Around 95% of them are optimistic about the economy while 5% believe that it
would be status quo and would not bear any significant impact on the retail industry.
However, at business level
23% of them feel threatened by
low cost producer who might
win away the market share.
Similarly 23% showed concern
about increasing impact of
customer mobility and the
readiness to engage with them
across multiple channels. 20%
of the IT heads also realize that
they need to invest more
resources on honing the skills
Losing share
to lower–cost
producers
23%
Customer
mobility (across
various channels
like PC, mobile,
offline, etc)
23%
Lack of
qualified
workforce
20%
Disruptive
technologies
(Mobile, Apps,
Cloud, etc)
17%
Lack of
investment in
sufficient
technology
17%
Biggest threats to retailers business model

22. 16
of their team while 17% believe that their business model might get impacted by
disruptive technologies that has been the trend of late. Remaining are of the view that if
proper technology investment are not sanctioned by the management then it might
reduce their competitive advantage thus, posing risk to their business model over the
horizon of 1-2 years.
In spite of the challenges that retailers
foresee, 68% agree that their business
will increase by 20% Y-o-Y or more while
18% have confidence that the customer
share would increase between 19%-11%
and 14% of them expect customer base
to increase just between 6%~10% over
next year.

23. 17
Retailers are leveraging technology in
different areas for strategic advantage
and decision making. A quick look
through various solution sets reveal
that almost everyone in the organized
retail industry use logistics and supply
solutions for cost saving and bringing
the efficiency. Augmented by
operations management solutions,
logistics and supply forms the back
bone of the retail operations and 95%
of the respondents tend to agree with
this fact. While 95% of the IT heads
also agreed solutions revolving
around customer insights are useful in
strategic decision making. In-store
customer experience solutions (WiFi,
billing, etc) and portfolio rationalization
solutions have some way to go to be
accepted for strategic utilization and
around 11% and 24% technology
heads have stated that their
organizations does not use them for
strategic use.
65%
83%
90%
94%
95%
95%
100%
24%
11%
10%
6%
5%
5%
PORTFOLIO RATIONALIZATION
IN-STORE CUSTOMER EXPERIENCE
PRICING DECISION
INVENTORY MANAGEMENT
OPERATIONS MANAGEMENT
CUSTOMER INSIGHTS
LOGISTICS AND SUPPLY
Areas in which retailers use Technology for strategic advantage and
decision making
Yes No

24. 18
There is a cross pollination of phenomena like social networking, having bearing on
almost all the other areas of businesses. 77% of respondents state that Social Media is
having ‘High’ impact on the retail business while 18% and 5% agree of moderate impact
and low impact respectively. Around 55% agree that Omni-channel availability is having
high impact on retail while the study also reveals that at the moment cloud and employee
mobility is not having relatively high impact or at least retailers does not agree much to it.
This highlights that in own way and wisdom, every retailer of repute is recognizing the
threats and risks resulting into different kinds of cost and they feel compelled to put a
mechanism in place that can bring more efficiency and effectiveness in their organization.
19%
21%
30%
55%
77%
31%
47%
40%
35%
18%
50%
26%
25%
10%
5%
EMPLOYEE MOBILITY (BYOD)
CLOUD DEPLOYMENTS
USE OF IN-STORE MOBILE TECHNOLOGY
MULTI-CHANNEL SHOPPING & PAYMENTS
SOCIAL NETWORKING
Degree of impact by recent phenomena on retail business
High Moderate Low

25. 19
All the efforts boils down to revenue and share and retail industry is no different. However
due to highly diverse market and large base of informed customers, it becomes
mandatory that retailers focus on retaining customers for high yield and in parallel
implement mechanism to add new customers. Focus on customer experience would
further augment the efforts of retailers to increase the customer stickiness. All the three
top factors are directly stitched to the immediate customer growth thereby increasing the
revenue however, it is also
important that retailers should
start realizing the priority and
worth of back-end solution, lack
of which can actually result in
loss of customer opportunity.
While discussing around the biggest restraint that retailers foresee for growth of their
business, it is ‘Lack of qualified workforce’, be it in the area of shop floor to handle
customers or employees harnessing the available technology. Few research have
highlighted that customers are thoroughly informed and they carry out research over the
net before coming to the stores. Usually they are better informed on the products and
other substitutes hence, retailer are under pressure to be continuously train their
workforce. Moreover, it is also challenging for retailers to retain the trained workforce as
they relatively have low exit barrier. Other restraints like process cost and compliance
regulations can be clubbed together since in absence of benchmarked technology that
helps managing them, there can be a void for implementing better processes leading to
compliance issues or least even recognizing them. Due to absence of a credible service
provider retailers also grapple with technology and it’s ROI. Retail companies must avoid
or overcome these barriers by
being alert, by hiring a reliable
technology partners who can
knows the nuances and can
recommend them the appropriate
benchmarks.

26. 20
During the discussion on the factors impacting profit margins of the retail businesses over
the next year, all the respondents agreed that the cost of inputs are to be managed
effectively. This can be understood from the demand and supply perspective i.e. when
there is a demand by the efficient retailers in the ecosystem the suppliers have options
to easily liquidate and they do not feel pressurized for returns and over-stocking. The cost
saving processes and technology helps retailers and suppliers mitigate the risk and
unevenness associated with the supply. In this kind of market place where the
competition is geared with robust supply chain management solutions, situations can
become challenging for relatively ‘not so efficient’ retailers who do not access to
benchmarked processes and technology to manage their supply chain thus, leading to
increase in cost of goods. This eventually means that they would not be able to pass
benefits to the customers or they will be forced to cut cost and would not be in a position
to train their workforce hence, resulting in low performance both on customer and
employee front.
Therefore, managing cost of goods is essential to avoid customer attrition that is the
second biggest concern for
retailers that might impact the
profit margins.
Amid the Omni-channel
environment, in absence of
customer insights and their buying habits, the aggregate cost or marketing cost starting
from transferring goods to the customers, storing in warehouse pending deliveries or
promoting the products can go up tremendously. It would be difficult to manage the
inventory carrying cost as retailers are not in position to optimize their stocks and adjust
to variations in market demand.
Marketing cost and administrative cost rank as fourth and fifth concerns that retailers
want to alleviate through the appropriate technology solutions.

27. 21
Having measure and control in place to mitigate the cost associated with processes or
risks has been on the mind of the IT leaders. During discussion, 70% of the respondents
agreed that they have supply chain management strategy in place to manage the cost
associated with back-end. Similarly 45% have put a plan to secure selling, general and
administrative cost while 25% agree that they have also considered outsourcing or
changing their model to cloud or shared services.
25%
45%
70%
RE-VISITING SERVICE DELIVERY MODELS
(OFFSHORING/SHARED SERVICES/CLOUD)
OPTIMIZING SG&A AND FRONT-END SOLUTIONS
SUPPLY CHAIN COSTS AND BACK-END
SOLUTIONS
Strategy that retailers have implemented to combat costs

28. 22
Growth and Plan for IT spend in 2014-15
Aggregation of survey respondents reveals that only 8% of the organized retailers have
1:1 PC Employee ratio and overall investment in Technology is growing at an average of
30% Y-o-Y. Nearly 59% of the respondents agree that around 64% of their IT investment
would be made at improving back-end support through the deployments of supply chain
management system. 55% of the respondents agree that they will spend 6% of their
budget on infrastructure and 5% on CRM solutions over the course of 2014-15.
In absolute monetary terms IT companies would spend less on Security without
compromising on its quality by availing the solutions over cloud and hence the
optimization in the budget.
% split of IT
investments
in 2014
% of retailers planning to invest in
specific technology solutions
Data Analytics Solutions
SCM Solutions
CRM Solutions
Infrastructure (Data Centre, etc.)
Network & Network Applications
Warehouse Management
Solutions
Security Solutions
Inventory Management Solutions
Unified Communications, etc.
64 %
59 %
55 %
50 %
45 %
41 %
36%
9 %
64 %
6 %
5 %
4 %
3 %
3 %
3 %
2 %
1 %
55 %
2 %

29. 23
Impact of technology on overall organizational objectives
High majority of respondents unanimously agree that all the below listed technologies will
make a positive impact on their businesses. Some difference of opinion gets reflected for
CRM, Inventory Management and data analytics solutions where respondents did not get
satisfactory outcome as expected from these solutions in their set-up.
Respondents also agree that Inventory Management and CRM solutions followed by
SCM solutions has the highest impact on their business while unified communication has
moderate or little bearing on their business objectives.
Impact of Technological
Solutions on Retailers
(Positive/Negative/Not Sure)
Degree of impact on overall
organizational objectives
(High / Moderate /Low)
95%
91%
90%
95%
5%
18%82%
9%
5%
38%
44% 44% 11%
50%
53%
Data Analytics Solutions
SCM Solutions
CRM Solutions
Network & Network Apps.
Security Solutions
Inventory Mgmt. Soln.
Unified Communications
Warehouse Mgmt. Soln.
Infrastructure (DC, etc.)
9%
73% 27%
59%
73%
91%
95%
9%
32%
18%
9%
5%
5%
68%
70%
32%
15%15%
57% 5%
90% 5% 5%
37% 53% 11%
39% 11%
29% 18%
47% 47%7%

30. 24
With the advent of digital customers, front-end solutions have been the priority for
retailers within which billing solutions occupies the top position on priority list with 90% of
IT heads agreeing that it has ‘high’ impact followed by other technologies pertaining to
in-store solutions like RFID racks, Wifi, etc. Digital customers come through varying
routes and more than 90% of retailers agree that e-commerce and mobile commerce
would be the call of the day having ‘high to moderate’ impact on retail businesses.
Supply chain management occupies the top priority among the array of back-end
solutions retailers wanting to deploy. Around 90% respondents agree that it would have
a high impact on cost saving and keeping the bottom-line healthy. Along with that
warehouse management solutions apparently have ‘high’ cost saving impact and that is
resonated by 72% of retailers, followed by customer relationship management system
that is echoed by 70% respondents. Unified communications has not been able to
convince and qualify under the same league for its cost saving capabilities and hence
53% consider it to have ‘moderate’ impact and only 13% opine for its ‘high’ impact.
13%
72%
90%
70%
53%
28%
10%
30%
33%COLLABORATION (VIDEO/AUDIO CALLING)
WAREHOUSE MANAGEMENT SOLUTIONS
SUPPLY CHAIN MANAGEMENT SOLUTIONS
CRM SOLUTIONS
Degree of impact from back-end solutions on retail
High Moderate Low
47%
60%
67%
90%
47%
35%
29%
10%
6%
5%
5%
MOBILE COMMERCE
E-COMMERCE
IN-STORE SOLUTIONS
BILLING SOLUTIONS (POINT OF SALE SOLN.)
Degree of impact from front-end solutions on retail
High Moderate Low

31. 25
Only 24% respondents have confidently stated that they their organization has ‘high’ IT
maturity for the deployment and usage of front-end solution. Meaning they have
successfully mapped and optimized processes that are tied to their business metrics and
performance. More than 70% of IT leads qualify their IT set-up between ‘high to average’
maturity level, meaning that they have a mix of optimized and ad-hoc processes that can
be further improvised by engaging with experienced vendor and using industry
benchmarks. While 4% of them
assess their organization’s IT maturity
to be just ‘average’ implying that there
is tremendous scope for growth to
systemize the deployment and usage
of front end solutions that can
accelerate their business and provide
better customer share and increased
revenue.
Compared to front-end solutions, companies appear to be more confident on their IT
maturity for back-end deployments as 36% of the respondents report their organizations
to be in ‘high’ zone. More than 46% respondents asses their maturity for deployment
between ‘high to average’. Many retailers (around 18%) seem to have acknowledge that
lot of improvisation is needed in shortest possible time for them to scale up their IT
maturity. They need to leverage expert
service providers who bring in multi-
client experience and can recommend
appropriate technologies and
benchmarked processes. This would
help them leap the entire cycle of
starting from scratch and be business
ready.
24%
72%
4%
Percieved IT maturity by retailers for front-end
High High~Avg Avg
36%
46%
18%
Percieved IT maturity by retailers for back-end
High High~Avg Avg

32. 26
Retailers on Cloud technology
IT Heads in retail organizations who plan to shift their IT spend on solutions hosted in
cloud, they would prioritize CRM deployments followed by data analytics and
Infrastructure. Apparently moving warehouse management, security and unified
communications solutions over cloud would be low priority areas.
Retailers see clear business reasons to deploy solutions on cloud, 55% of them believe
that it will provide them better management without worrying too much over their non-
core area while 50% of them acknowledge that it will help them save cost and 27% agree
that moving the deployment over cloud would help them improve their turn-around time
and manage their supplier-customer better.
It will provide better mgmt. for soln., services,
platform or network
It will reduce cost
It will change our interactions with suppliers &
customers
It will accelerate time to market
It will fundamentally change our business
model
55%
50%
27%
23%
14%

33. 27
For the year 2014-15, around one-third of retailers are considering the cloud based
solutions with highest uptake around CRM followed by Inventory management and data
analytics solutions and around 45%, 44% and 70% IT heads tend to agree to this fact,
respectively. Hence, their IT spend for these areas has reduced and now they can
allocate the same resources to other critical applications. On the other hand security
solutions uptake would be on-premises for securing legacy data along with newer devices
and solutions. With the exception of CRM, IT heads’ plan is tilted towards on-premises
deployments. SCM stands out and would continue to be ‘High’ focus area with around
81% retailers agreeing on the same out of which 63% plan to deploy it on-premises and
remaining 37% would go for cloud deployment. Data analytics solution and Infrastructure
with around 70% and 57% retailers respectively suggesting the next ‘High’ focus areas
where again they would consider on-premises arrangement over cloud.
Planned model of deployment
(Cloud / On-Premise)
Focus areas of IT Spend
(High / Low /No Spend)
Warehouse Mgmt. Soln.
9%
CRM Solutions
Inventory Management Soln.
Data Analytics Soln.
Unified Communications
Security Soln.
SCM Soln.
Infrastructure (Data Centre, etc.)
45%
23%
14%
6%
10%
70%
54%
33% 20%
57% 36% 7%
13%
27% 73%
Network & Network Apps.
40%
44% 39% 17%
24%
81%
23%
47%
25% 63%
38%62%
57%
77%
71%
67%
63%
57%
77%
86%
43%
43%
37%
33%
29%
23%
23%
14%

34. 28
Top concerns regarding cloud offering are reliability, security and loss of control. Nearly
73% acknowledge reliability of the vendor as a ‘High’ concern, for 18% this is a ‘Low’
challenge while 9% do not consider this as a concern at all. Second biggest challenge is
around security of data wherein almost 68% agree to this fact and rate it as ‘High’, 27%
rate it as ‘Low’ and 5% as not a significant factor. Mind-set of Indian retailers seem to be
grappled with the next common concern evident in the industry i.e. Loss of Control where
almost 50% IT Heads tend to agree and term it as ‘High’ concern area, 36% as ‘Low’ and
14% does not consider this as a challenge any more. It is apparent through research that
clear cut cost benefit of cloud is not a popular value proposition perceived by IT heads
as 52% seem to consider it in a ‘Low’ bracket, see under ROI. Study also highlights an
encouraging trends that Cloud in retail industry is not being perceived as a threat for the
IT team and organizations are open-minded to accept it as a next model.
Degree of concerns
(High / Low/ Not a concern)
43%
Reliability of the vendor
Security Concerns
Compliance Issues
Standardization & Integration Challenges
Legacy On-premise assets and solutions
Ambiguity on ROI
Impact on the present team / headcount
Culture and change management
Will change the fundamental business
model of org.
73% 18% 9%
68% 27% 5%
50% 36% 14%
43% 43% 14%
38% 29% 33%
19% 52% 29%
48%
7% 36% 57%
5% 35% 60%
41% 41% 18%
10%
List of Concerns for cloud deployment
Loss of Control on Data

35. 29

36. 29
Be Aware, Act Now…
Consumer industries and retailers operate in hyper competitive environments, catering
to consumers who are smart, critical and more informed. While it provides immense
opportunity for retailers to monetize the voluminous customer segments, it comes with its
own set of challenges that continues to grow in speed, volume, and complexity.
Implementing best technology to harness the process and organizational objectives
would provide more sustainable action plan. This report after assessing the business
priorities and technology readiness of retail industry calls for some main GO DO actions:
Be aware of your own limitations
Make bigger ripples with fewer pebbles… A visionary CTO / IT Lead
should be candid on their team’s capability and capacity. Since for
your organisation you have better visibility over business priorities,
market situation and technological readiness therefore, you should
challenge the status quo and explore the methods for better ROI or
even determine if you are getting the best bang for the buck.
Leverage the expertise of technology services provider by not just
roping them for solutions’ deployment but to consult and maintain the
systems as well i.e. end-to-end. Or rather with the cloud computing
becoming norm in many domains, save the capital investments and
outsource selectively. Focus on the core areas of technology that can
bring both sizable transformational and transactional changes. After
all, technology deployment is not a one-time obligation but an on-
going commitment. This will make justifying the IT investments easier
along with availability of benchmarked processes and solutions.
Be aware of the competition
Your loss is competitor’s gain… Onus of bringing accountability in
the back-end processes and helping them to transcend to the
1
2

37. 30
business model through technology would result in quick time to
market and mitigate any opportunity cost. Choosing an apt model
(e.g. cloud), scalable back-end infrastructure, optimum solution sets
around SCM, warehouse management or inventory management
would provide a competitive advantage. Hence, hallmark of the next
generation retailer would not only be better customer facing
solutions and transaction point but a robust and complementing
back-end system that is able to handle fast changing and ever
growing front load.
Be aware of the consumer landscape
Time is money – couldn’t be more true when you are a CTO and your
business demands stupendous agility in order to tap market
opportunities and consumer shifts. As stated earlier in this report
there are new evolving dimensions in ecosystem with consumers
becoming active on multiple channels and choosing to engage at will
- ranging from kiosks to stores, website and over social networking
sites. They expect consistent experience across channels. For
retailers, success is not just being measured by revenue and share
but also by sustainable customer experience that eventually leads to
exponential increase in business over a longer time that otherwise is
an opportunity cost.
Apart from orchestrating technology charter, it becomes important
that you lead the customer centricity philosophy for your organization
and enable it through the apt service provider. Actually technology is
incidental, you need to look out for a service-cum-consulting partner
who brings value from their multi-client experience and closely
calibrated solutions. This will help the organization to pro-actively
gauge the consumer sentiments and adjust the processes, business
model and employee training with urgency. Technology response
and its readiness would be leading indicators of any retailer’s
success in coming times.
3

38. 31
Report compiled by: Cornerstone Research & Consulting
References
1. Paige research
2. Next-Generation Retailing In India: An Empirical Study Using Factor Analysis published in International Review of Management and
Marketing Vol. 1, No. 2, 2011, pp. 25-35, ISSN: 2146-4405
3. Pulse of Indian Retail Market – A survey of CFOs in the Indian retail sector, March 2014 by E&Y and RAI.
4. Omni-channel Shoppers -Synchronizing channels to transcend boundaries between online and off; RIS news.com, August 2013.
5. The next revolution in retail technology – whitepaper by Motorola, etc
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