Contributed by Sirish Mellacheruvu
One of the very important concerns of Indian retail has been the lack of processes and systems, even in a few organized retailers. Thankfully there are a bunch of Indian retailers, who do have an organized way of operating the business and also do exercise controls over the systems at regular intervals.
In this scenario, if the Indian retail has to emerge competitive in the arena of competition coming in from the likes of TESCO, Metro cash & carry, Shoprite etc, its is imperative to develop a strong foundation of practices, which rely on systems and processes, minimizing human intervention and error.
One interesting point in this regard is that even though a few retailing companies in India have a strong system and process orientation, better than the other companies of Indian origin, it cannot be said that this can make them competitive with regard to the multinational companies.
This is where the Outsourced work from the International retailers comes into play. Since a lot of functions like Space management, assortment optimization, Product sourcing etc are being outsourced to countries like India and China, it is good that the retailers map their standards, using this, to the process standards of International retailers. For example, promotion analysis is one important area for the international retailers, which helps them gauge the performance of the promotion implemented in the store. In India, most of the retailers do not even look back and see whether the promotion has given the mileage expected. This kind of comparative study, at this juncture makes Indian retail ready to run, with the International players.
The question now arises, why do we have to do it? Because, we are in the race to provide the customers, the best!!! The best in range, the best in promotions and provide the best experience. This will help us bring in customers or retain the existing customers
The outsourced retail functions need be mapped (also respecting the confidentiality in required cases) and localized to suit the Indian market.
Since the industry is getting hotter with the advent of new players (Birla being the latest to join the fray – Source Kumarmangalam Birla’s Interview in a news channel talking about his interest to get into retail), they need to do a lot of work in strengthening their systems before they go LIVE!!!!
2 comments:
Sirish's post on organized Indian retailing is a thought provoking commentary.
Lack of processes and modernization of systems has been the bane of most of the retailers in India.
The Retail industry growth in India is on the fast track but the minimal importance given to processes threatens to slacken the pace of growth.
Retailers in India like RPG, Shopper's Stop, Metro have established processes before expanding, and Reliance is now in the mode of strengthening its systems and processes before its first retail stores roll out in India. Other retailers should also follow suit in order to have long-term stability.
There are a lot of learnings which can be imbibed by these retailers from the companies which are dealing with retail off shore activities.
Balakrishna Parankusam
Went through the interesting note posted by Bala and since its needless to confirm the well evident retail phenomenon in Inida I can say without a shred of doubt that the ORAGINSED Retail sector will bring immense value for money as well as high quality product selection options to the final consumer. From an ERP prospective the real monetory gain from this growth will be in hands of those organised retailers who use the choosen ERP in the most business suited fashion and get the best and most cost effective ERP implimentation team as a well customised ERP solution works as the back bone of the huge mammaoth called Retail which goes into minute details and operational logistics.
Vikas Bhatnagar
Senior Retail Consultant at Oracle
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