The retailing environment in India is about to explode.
What started off a few years ago as a small attempt to wean the Indian homemaker
from the corner store and the vegetable market, entered the well-lit, integrated
shopping experiences provided by a Shoppers Stop or a Foodworld. It has suddenly
become a phenomenon that is transforming the landscape of over a hundred cities
and towns. This has raised the expectations of the consumers in terms of bargain
and quality shopping. And Reliance is making news with its hiring of million
dollar salaried professionals to power its own mega ventures. And global majors
such as Tesco and Walmart are waiting in the wings for their place under the
Indian sun. Let's take a look at global trends in retail and their impact on
Indian retail.
The three dominant trends in the deployment of IT in this
fast growing industry are-the dominance of package solutions, the focus on
supply chain optimization, and the new drive towards IT-BPO integration.
The legendary success of Walmart has been attributed by
industry pundits in their ability to procure, warehouse, distribute, and display
merchandise at a speed and price point that is unmatched by any of their
competitors.
The vision of their management has enabled them to set
processes in place to embrace each one of their supply chain partners in a
framework of supply optimisation and cost management that creates multiple
winner.
The true evidence of transformational outsourcing is the
ability to seamlessly integrate the applications development, support and
processing. This is happening at a time when offshoring, nearshoring and the EDS
terminology of bestshoring have caught the imagination of CEOs worldwide. And
such an integration of IT and BPO has been quickly incorporated by many
retailers in the US and Europe. Global retailers in partnership are now tackling
merchandise management, warehouse space optimisation, logistics and a host of
other areas with their local and global vendors. This is driving more cost
reduction and value creation growth through innovative new approaches.
The dominance of package solutions is the most predictable for an industry |
How can the great retail revolution in India benefit from
the “best-in-class” experiences of their global brethren? The opportunity is
clearly huge-for retailers to think through their entire process and expansion
strategy in the context of available Information Technology and Business Process
Optimisation and Outsourcing solutions. For the Indian IT and BPO community this
industry presents one of the best opportunities to showcase capabilities in the
domestic market as well as with global customers. There is no shortage of
opportunity and profits in developing and implementing world-class solutions in
the local marketplace in this industry. This is an industry where not just the
contextual functions such as accounting and human resource management but also
core functions — buying, merchandising, property management, marketing, and
loyalty management are becoming candidates for transformational outsourcing and
many retailers have put in place advanced strategies for outsourcing and
co-sourcing these applications with savvy partners in their countries as well as
offshore. And if Indian retailers learn from their global counterparts and
integrate transformational outsourcing into their growth strategies, they can
hit the ground running with customer and cost management models that are truly
world class.
Finally the case for IT in Retail becomes even stronger
when one looks at the pedigree of today's Retail czars. They are a bunch of IT
savvy folks who know how to use the power of IT to extract the maximum juice
from their shelves and their customers-Rajeev Karwal, BS Nagesh and now Raghu
Pillai who was himself in the IT industry a decade ago and has now moved through
RPG Retail to Pantaloon to Reliance. With stalwarts like Raghu at the forefront
of the Retail revolution, this is one industry where world class IT will surely
be deployed to make the difference!