Technology adoption in retail and its benefits to SMEs & LS Retail Suite a probable solution
The Retail Market is in a state of explosive growth. One needs to see the mushrooming of malls and shopping complexes in the metros and small towns in India to grasp the enormity of this growth. For many years the retail industry in India has been disorganized and consisted mostly of single- store outlets, a few retail chains and a large number of the friendly-neighborhood “Kirana” shops.
These outlets had pre-historic supply chains, inefficient inventory management, very few were customer focused and most were in the small to medium category. The sudden spurt in demand and a greater awareness amongst buyers for quality products and services, created a vacuum that could only be met by an organized retail sector, with fine-tuned supply chains, efficient inventory management and a totally customer focused view that was alien to India.
One of the key factors in achieving an organised and efficient retail operation is the use of technology as an enabler. IT is the key enabler to improving customer satisfaction, operational efficiencies and by extension profitability. A typical pan-national retail operation would have multiple regional warehouses, offices and retail outlets.
In such an operation how does the headquarters know the daily turnover at each of its outlets, how does it know which products are selling the most in which region at which outlet, how does one store know if a stock-out item in its own inventory is available at another store location for whom it is slow moving item. Most of these issues can be solved by the appropriate use of technology. The ability to have current information on a real time basis and analyzing that data for better forecasting are some of the payback provided by technology.
Retailers all across the country believe that shrinkage due to inventory recording, handling and administrative errors costs retailer’s millions. In an intensely competitive, cost-conscious industry, appropriate IT and telecommunications infrastructure can make a vast difference, and can result in improved productivity and major cost savings through more accurate supply chain forecasting and better inventory management.
For example, given a situation where a retailer wants to increase its loyalty customer base, an organization with relevant IT systems in place, has a ready customer database updated at every purchase, which can be used to send mailers or promotional catalogues. Another example where IT can be beneficial is a store management system that alerts out-of-place or stock-out items. An in-store system that uses magnetic strips or barcodes or RFID to monitor actual versus intended product location on the floor or in the stockroom.
By using RFID-encoded shelf edge labels with embedded shelf readers, a grid could be set up for verifying planogram compliance for standard shelving and promotional displays, with a corresponding alert for misplaced items sent to store personnel. Big payoffs could be realized for frequently moved and misplaced items, such as apparel, shoes, CDs and DVDs.
Appropriate investment in technology can impact the business positively through improved operational efficiencies, increased profitability, happier customers and providing a competitive advantage.