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Technology powers retail boom in India

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CIOL Bureau
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Shashwat Chaturvedi



MUMBAI: If all the newsprints featuring the retail vertical in the recent past were stacked on top of each other, they would surely fill up a decent sized Wal-Mart warehouse.

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That’s how ‘hot’ this vertical has been of late. Not a day passes, without some sort of announcement or news. The booming Indian economy has finally got a poster boy, and he goes by the name of retail.

Big story

According to estimates, the Indian retail industry is expected to grow from $300 billion to $637 billion by 2015. Currently, the organized retail segment accounts for only 3-4 per cent of the total market, but things could change as this segment (organized) is expected to touch 18 per cent in the next few years.

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The game has become so big, that the world’s second highest-grossing corporation; Wal-Mart has decided to open “hundreds of retail stores” in conjunction with Bharti. So have the Tescos and Carrefours of the world. With the arrival of these deep-pocketed international players, there is fear that the local ones will be lame sitting ducks.

After all who can match the technological and IT infrastructure of a Wal-Mart?

The answer to this question is an unequivocal ‘No’. The Indian players are not only matching, but also even excelling in the game of IT. Every single CIO that we spoke to underscored the importance of IT for his company’s prospects. “IT can no longer be termed as only important; now it is critical for a retail business,” emphasize Ranjan Sharma from Vishal Megamart.

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IT helps retailers manage their supply chain, inventory, etc. in an efficient manner. The single largest improvement is brought in terms of customer satisfaction. “With IT we are able to run complex promotions, which otherwise would not have been possible in a manual system thereby giving a good value for money for the users,” says K V S Seshasai, head (IT & Corporate Quality), Trent.

 
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Local flavour

Yet, IT is not the panacea for all ills. “Using technology for the sake of technology is not the best of the idea, one needs to evaluate the business case,” says Unni Krishnan TM, CTO, Shoppers’ Stop.

Also, one cannot fully depend on the off-the-shelf-solutions available in the marketplace, as Indian consumers offer unique challenges. One needs a system that lends itself to customization and localization. Agrees Seshasai and cites an instance. “Take the case of MRP. India is one of the very few countries that have such a concept and not many systems are tuned to it. Fortunately, we had a system in place that made all these customization issues pretty easy,” he clarifies.

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In the world of billions and million sq. feet, the small kirana (grocery) storekeeper seems to be out of place. While everyone is harping on how IT can and has helped big players, what about the small ones? Where do they go? What should they do?

Rakhee Nagpal, managing director, DVS, seems to have an answer. “I strongly believe that 12 million or so small retailers can also benefit from the boom. After all even in the West, the Mom and Pop stores have held their ground in front of large retailers. They can also use IT to their advantage in their own small ways. There is huge opportunities and it is open to everyone, big or small,” she says.

In the days to come

Finally, what are the emerging trends in the vertical? Currently, there is a lot of talk about BI and data warehousing. RFID is another technology that has been talked a lot about. But most of the CIOs contend that there needs to be an ecosystem before the technology is fully adopted and currently, the ecosystem is not ubiquitous.

Summing up, the Indian retailers do not seem to be in any ways lacking in terms of technology adoption vis-à-vis their foreign counterparts. Maybe, it is the foreign players that need to get wary and not the other way round.