Currently the stage where retail is, innovations hold the key to sustain & succeed. Innovations not only in terms of store layouts & retail formats but also in fields of various customer touch points which vary from product categories to assortment to PoS to loyalty to store experience to convenience....so on & so forth.

The solution
We have implemented warehouse automation, a system which has helped our warehouse to perform Inward and outward activity using a handheld terminal (also called as PDT), reducing the manpower and increasing the time taken by warehouse from request creation by merchandiser to ship the required merchandise. The worker efficiency has increased by 40%. This has helped reduce receipt variance at stores to nearly zero. The same system is used at the back store for return to vendor and return to DC.

80 % of our business is sale of furniture and we are connectivity dependent for using SAP for furniture business. For this, we had budgets for back-up of connectivity, but we have formulated a cost-effective connectivity solution for this backup which has been rolled out across all stores and is 60% less than the standard backup connectivity which we had planned earlier.

Earlier mobile users used to connect to SAP ERP using a VPN client, but with implementation of a SAP router, any number of mobile users can connect to SAP using standard secure routers and default firewalls. This has helped in reducing cost of VPN license to the tune of Rs 10,000 per user.

Certain process improvement in SAP has been rolled out to reduce duplicate work like automatic generation of STO for sales orders of furniture.

We have implemented VoIP between our mother warehouse and HO has reduced our telephone cost to the extent of 20- 25%.

CFL ventured into the retail business in April 2008 with 20 rural retail stores in the state of Andhra Pradesh as a pilot run. SAP was the core ERP of its manufacturing business then and data from the POS application was uploaded to SAP on regular intervals. However, CFL retail business faced a lot of challenges in day-to-day routine operations, including: Delay in information availability on items to service customers; POS Break down in Peak periods; Data replication from Store to HO and vice a versa; Inefficient Inventory Management; Statutory requirements at POS leading to manual billing thus leading to higher customer billing time at POS; Internal controls & audit trail; and Poor MIS. It decided to expand its rural retail presence and targeted to achieve 300+ retail stores in Andhra Pradesh by March 2009. CFL also decided to get into the rural lifestyle business. With the above challenges on hand, there was a need for a retail application which could cater to both Agri Retail as well as Lifestyle Retail Business. LS Retail and Microsoft Dynamics NAV were implemented to cover Point of Sales; Stores Back Office; Warehouse Inventory Management; Purchase; and Finance and other back-end operations at HO. Some of the challenges faced in this transition included: Change Management for the CFL team that was from a manufacturing background; challenges in implementing rural retail processes; statutory requirement compliance; faster roll out of stores; Integration with SAP meant techno-functional consultants from Microsoft Dynamics NAV, LS Retail and SAP had to work together. The company now has a retail solution that is an end to end retail solution catering to Agri as well as lifestyle businesses; gives farmer information at POS; offers special promotions/schemes for farmers. However, the most pertinent benefit to farmers is the elimination of middlemen from the supply chain. The project also strives to ensure that all that is needed by a rural customer is easily accessible be it products or services and help him to earn more & increase his standard of living in rural India.

Sharad Singh, Program Director–Retail Group, MindTree

...On unique challenges for Retail.
The organized retail sector is facing some unique challenges. To name a few, these can be classified as high real estate costs, value-for-money-conscious customers, unsatisfactory infrastructure for logistics and bad inventory management, thus forcing them to do frequent sales.

IT applications can help retailers put the right product in the right store in the right quantity at the right time. All they need is up-to-date inventory information and history of sales records.

...On expected growth.
This is hard to predict at this point in time. The discretionary spend has gone down/been delayed significantly but non-discretionary spends have sustained or gone up slightly. The analysis whether there is an absolute increase in numbers or it is just the Rupee value (due to inflation) would take some time.

The real test would happen in the next four-five months when the holiday season begins.

...On using social networking tools for promotional marketing.
The last year has been quite significant for retailers. Social networking sites such as Facebook and Twitter are being used by retailers for promotion and marketing purposes. Another significant innovation has been the availability of iTunes apps for Apple iPhone by retailers such as Amazon, Target, 1-800-flowers, etc. Closer to home, most of the organized sector is just finishing its retail ERP package implementations and have started to look at planning and forecasting solutions now.

Chirantan Chatterjee,Associate Director - ECM Practice Head, Virtusa Corporation

Traditionally, the retail industry has lagged behind other industries in technology adoption. However, the industry in the country is consolidating and the percentage of organized sector is increasing at a strong rate. Some of the technologies which the retail sector is exploring today include Customer identification using RFID, e-Catalog based selling, Mobile Point of Sale (PoS), Digital Signage and Intelligent database among others.

Growth in the retail sector
An analyst study reveals that the Indian retail market is the fifth largest in the world, with a market size estimated to be $ 427 billion by 2010. However, today, the major component of this market is in the unorganized sector. The organized retail sector forms a small chunk of this huge market. This is expected to change significantly in the near future, as the organized sector is expected to increase its share to more than 20% in the next few years.

According to a leading research firm, the retail industry will account for a high share of technology investments in the country. The technology investment in this sector is expected to increase to approximately $1 billion by 2010.

Hottest trends in IT apps for Retail
Today, the format of Indian retail market is heavily oriented towards physical stores and in-person interactions. Very few online stores are available and successful. Given the focus on in-store interaction, companies are still using web interactions mainly for information purposes and to pull the crowd into stores. This means there is a huge opportunity for the retail sector to take the next steps in understanding consumer buying behavior and to personalize the content for them.

Further, I believe the social media networking sites are providing immense opportunities for businesses to listen and understand their target customers. These sites are driving consumer choice and influencing consumer preferences. Investment in online/web technologies to provide an enhanced customer experience would be one of the trends that will emerge in the near future.

One of the drivers for retail industry bringing an online face to its operations will be the rapidly growing Internet usage across India. Online/e-commerce transactions are expected to increase manifold in the near future.

For e-commerce to take off, it is imperative that the content architecture is well designed and architected right from the beginning. Without such a structure (taxonomy, navigation, etc) the web interaction can't be made appealing. This is a huge area of growth and opportunity for Enterprise Content Management (ECM) in general in India.

Also, most content is still fairly rudimentary. We believe, an area of focus may be towards improving the quality of content and making it a rich digital asset as well as to create metadata. This links to the information architecture to drive business online. Without proper meta data, we can't present content in the right context at the right time.

Another area of focus in future may be the integration of ECM applications with back end ERP systems to present correct info about store availability, shipping etc. Self-service portals will be a key trend in retail as most companies are focusing on Web experience and providing loyalty programs for self administration.

Along with these challenges, IT challenges such as single sign-on to identify the customer properly, integration with back end systems, providing a scalable and high performing application architecture, etc will follow.