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R. Savitha

The retail segment needs to hone its skills to keep itself profitable in a sector where margins are thin. Software that helps the retailer, small or big, keep track of not just inventories but consumer preference patterns could prove a boon. Here's a look at what's available and how it works.

What is it that attracts a common man to enter into the retail chain stores such as Shoppers' Stop, Food World or the Nilgiris? Is it the snob value attached to it or is it the way that these outfits present their wares to the discerning customer? Yes and No. Yes, because it ignites a feeling of knowing what is behind the entry point. No, because it is a way of life for the upper and the nouveau rich people. Though these outlets look very attractive, these retailers, face a lot of competition from the domestic as well as the overseas market. With many of the global players making a beeline for the Indian market, which is a huge consumer market, the newer formats and channels are fighting for a share of the consumer rupee.

The customers of the new age are also spoilt for choice and the expectations are on the rise from the retailers in terms of value and service. Looking at the global scenario, the world is witnessing slowdown in quick succession, resulting in a downturn even for retail sales. They are finding themselves in a position where it is difficult to even stay afloat. The same is reflected in the Indian market too with some of the outlets of these big chains closing shop, especially in the suburban areas so as to have a control on their overheads.

But even in these difficult times, they have not lost track of what is happening elsewhere and plans are on in full swing as the maxim goes to be `just in time'. They are forever busy in the process of upgrading their software to be competitive and keep the cash register ringing. Most of these chains have already implemented software in their back office and are constantly on the lookout for new software.

So, to keep track of this ever-increasing number of consumers who look at all the options available, including the freebies offered by these shops before entering any retail chain, what are the software packages available for the retailers? Is it not a daunting task for these retailers to ensure that their faithful customers do not leave them, while ensuring that new customers keep walking in?

To help them get the best in this vicious circle, many software companies across the country have developed software packages to suit the different and varied requirement of these retailers. Among the few who are in the market is Chennai-based Polaris Retail InfoTech Ltd, a subsidiary of Polaris, which has entered the market with their software, Retail Excel. Chennai-based TVSundaram Iyengar and Sons are currently test marketing their new point-of-sale system for small and medium retailers in grocery and other related segment. The Bangalore-based VMoksha Technologies have a software for the retail segment, Pune-based Zensar Technologies have tied up with the RPG group for the retail software and so on goes the long list of retail software in the market.

And what good does it do for the retailers to install these systems in place? "Retail business is different from other business," says Pradipta K. Mahopatra, Chief Executive Officer, RPG Group comments. "Consider the case of Hindustan Lever or Reliance Petroleum, where it conducts thousands of transactions on a daily basis. Or Walmart, which transacts several million bills. It has become a necessity or imperative that transaction is online. It is a transaction-intensive business and there is no time like real time," he points out. "There is no time to be lost," says Vikas Prabhu of Shoppers' Stop and points out that in today's retail scenario, the competition is becoming stronger by the day. "Due to this, there is a very minimum differentiation between yours and your competitors offering to the end customers. So, the other factors like convenience, price, size, and speed can provide an edge to a retailer over others," he notes.

Though IT plays a very vital role in this retail segment, the question is, `how did the generation in the early 1980s, when the IT spread was not much, survive?'. Prem Prakash, who is the Executive Vice-President and Head of Retail Practice, VMoksha Technologies, Singapore, notes that the kirana or the small-time grocery shop owners are always in touch with the merchandise bought and stored in the shop. "But with prosperity comes more employment and that is when these nuggets of information have to be shared and ensured that profits still keep coming and that is where the whole point lies," he points out. India is still a nascent player in this and investments are not much as compared to the developed countries. To cater to these small and medium grocery stores, a point of sale system has been developed by the TVS Group of Chennai and what this software does is billing, maintaining stock, maintaining customer accounts and providing basic MIS reports on shop operations.

According to S. Narendran of TVS eShops, "The package is priced at Rs 50,000 and is currently available in English and Tamil. This product includes an integrated software and hardware. The benefits to the retailers include accurate cash tally, keeping track of key customers and maintaining individual customer accounts, maintaining inventory and getting to know the status of business through user-friendly reports. Now, let us take a look at the other side where it is the employees who bring customers in.

How does one motivate them? The challenge is to be on top, while charging your employees with enthusiasm to carry on with the work day after day. Prakash points out that what invariably happens in retail shops is that the employees do not have enough knowledge about the product and when customers walk in asking for specific products, either they plead ignorance or say that, that particular feature is not present. Newer products are always making it to the market on a daily basis and retailers have to ensure that the merchandise in the shops is moved out, once it is found to be stagnating. Even shelf space costs money. "Employees should be motivated with incentives and these should be based on the sales generated by the employees," Prakash notes. "This is where even IT plays a major role as it helps in better dissemination of knowledge," he points out.

According to Prabhu, every retailer should focus on the following to ensure his success in the long run — external customers, business partners, vendors, internal customers, employees and stakeholders. Today, a consumer dictates more than a seller. In the recessionary market, it becomes extremely important to retain new and existing customers. A strong CRM, data warehousing, and data mining tool would help retailer in understanding the buying patterns, frequency of visits, customers' preferences better and, in turn, will help to serve him better. In short, balance inventory assortments, proper ordering and pricing, accurate customer tracking and promoting loyalty by enhancing shoppers' in-store experience will surely bring success to a retailer.

All this can be easily achieved by having very strong information systems backbone. ``The other thing is that when the markets are not doing well, it becomes important to control your inventory to sizeable levels and ensure correct product assortment and replenishment. It is also important to keep markdowns at a bare minimum to reduce unwanted liability," Prabhu points out.

At the executive level, technology, with the help of a strong MIS tool, improves planning and decision- making.

It helps to take inventory, pricing and marketing decisions, as well as to improve product design and development. Prabhu notes that the other key initiatives, which may give edge to a retailer over others, are:

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