Indian retailers need to undergo a paradigm shift to align to the current economic reality, escalating capital investments in inventory and increased customer service demands. Such a shift can come only when retailers embrace a fully integrated enterprise-wide application set.

1. 2011
GEAR UP FOR
COMPETITION
By Manish Chaturvedi, vice president – Indirect Sales, CitiXsys Technologies
Indian retailers need to undergo a paradigm
shift to align to the current economic reality,
escalating capital investments in inventory and
increased customer service demands. Such a
shift can come only when retailers embrace a
fully integrated enterprise-wide application set.
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2. section:1 | overviews
F
oreign direct investment (FDI) in multi-brand retail
in India seems to be imminent and there has been a
lot that has been discussed, written and debated on
this topic. While most discussions and debates are
around the pros and cons of it, what is pertinent is
how a retailer should gear up for competition.
Statistically, retail – one of the fasted growing industries
in India – contributes over 10 per cent to GDP growth. This
seemingly small percentage translates to several hundred
billion dollars. Comprising a sunrise industry, retail and
distribution companies are one of the most complex,
competitive and price sensitive.
THE CHALLENGE
Retailers have to manage enormously complex business
processes that affect the entire lifecycles of the products they dead inventory, which will have to be disposed off at reduced
sell. margins through forced promotions and sales. On the other
Apparel retailers have to keep up with the ever-changing hand, an under-stock situation can lead to lost sales.
trends of the fashion world. Sourcing in-vogue styles onto the Retailers in speciality categories face an arduous challenge
shop floor before the in-season trend passes, and maintaining of keeping pace with competition from the larger mass market
appropriate stock levels for the latest styles, is also a challenge retail counterparts, who offer a wider selection at extremely
for retailers. Similarly, the fall-winter collection should give way competitive prices – competition that will only intensify with
to the spring-summer collection in time to maximise margins. big-box retailers setting up multi-brand operations in India.
Food retailers must acquire fresh perishable items from As if these challenges weren’t big enough, having an
local suppliers and make them available to customers in store accurate view of inventory across stores, delayed shipments,
within hours to maintain the highest quality and freshness security requirements to manage the rise in theft, the pressure
customers come to expect. to earn customer loyalty to increase repeat sales, improved in-
Retailers live in a constant dilemma of maintaining optimal store shopping experiences and many more such priorities are
inventory levels. An overstocked situation will lead to future all challenges that can give a retailer sleepless nights.
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3. 2011
Purchase and Sales
Pricing, orders, warehouse
policies & policies, user roles
promotions
Headquarter
In-store
transactional
data Inventory and
shipment status,
stock movement
Retail Store Warehouse
Replenishment
and order Inventory and
fulfillment shipment status,
requests stock movement Direct customer
deliveries
Deployment Landscape for the New Age Retailer
Figure: An Ideal Application Landscape
As retailers aim to cope with such pressures, they often retailers have invested in inventory management applications.
struggle with how best to prioritise – should one concentrate Though such applications increase the visibility of inventory,
on reducing Cost of Goods Sold (COGS) by sourcing goods in isolation they do not provide a complete solution. Disparate
from price-competitive suppliers, or on optimising distribution systems within an organisation often leave key decision-makers
functions of the business, or simply investing in expanding the struggling to piece together the information necessary for more
retail chain to increase market share by reaching out to more informed decision-making.
potential consumers through multichannel retailing. With multichannel retailing growing in popularity, retailers, in
To improve on the process of ensuring sufficient product an effort to increase revenues and gain new customers, turn to
availability when and where it is most needed, which will alternative channels of marketing their products and services.
minimise working capital and inventory holding costs, most Retailers find themselves managing stock replenishment from
traditional brick & mortar stores as well as order fulfillment
from other channels such as mail order catalogues and online
shopping. All of which place an increased demand on the
distribution centre to effectively and efficiently manage the
distribution of goods to customers.
For a retailer to succeed in today’s market, it is becoming
obvious from the current consumer behaviour to retain
customer loyalty. Retailers must improve a shopper's
experience by making available options for more convenient
shopping. Retailers must also extend incentives beyond
promotional discounts. An integrated 'points and rewards'
management application, which entices customers to come
back, is one such option that retailers must seriously consider.
The other options include online shopping, shopping via mobile
devices and the flexibility to either pay-and-pickup or pay-and-
get-delivered.
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4. section:1 | overviews
WHAT NEEDS TO BE DONE? critical pieces of information that should be made available to
To meet these challenges, retail organisations have to be the decision-makers in the quickest possible time.
able to constantly innovate and deliver improvements to their While most of the large-scale retail chains have
business processes. established processes, it is the small and medium retailer
– be it a speciality retail chain or a complex multi-store
RETAIL INNOVATION TAKES MANY FORMS environment – who struggle to piece together increasing
First, set up and streamline inventory management and supply amounts of information from different processes via disparate
chain processes, which should be reviewed regularly. Constant communication channels to make an informed, effective
improvements will ensure businesses keep pace with customer decision with pressures from upper management to increase
demand and enable expansion with an emphasis on keeping revenue.
costs down. CitiXsys Technologies, a leading provider of retail,
Next, there is the automation of these processes by warehousing and distribution applications, and SAP have
deploying packaged applications that seamlessly integrate been working together to make this a reality. With the backend
financial, sales and retail functions. The integrated solution Enterprise Application provided by SAP, CitiXsys offers an
has to be robust enough to not only cater to immediate needs, application suite to retailers to effectively and better manage
but also be scalable to enable a retail organisation to grow. their business operations.
The in-store processes need to be continually refined to
ensure retailers maximise such efficiencies without sacrificing
customer experience.
And finally, there has to be a budget and scope to
incorporate latest trends in retail to offer better in-store
shopping experience. These trends are not just limited to a
chic showroom, but extend way beyond the bricks & mortar
store, right into the comfortable confines of the customer’s
home.
HOW DO YOU DO IT?
In order to optimise business processes for the retail and
warehousing operations, a detailed view of the inventory
throughout the chain is required. Furthermore, fluctuations in
demand, speed of replenishment, effective movement of goods
from the warehouse/distribution centre to their respective
destinations – be it the retail store or the end consumer – are
CitiXsys offers to its customers the power of a SAP-powered
business management suite encompassing financials,
Webstore
warehousing & distribution, and retail. The application set is
scalable and stackable to suit the growing demands of today’s
Mobile Analytics retailers.
iVend Retail – a complete retail management application
implemented throughout the entire landscape – allows for
retail, warehousing & distribution to work in tandem. The retail
processes which require high levels of coordination between
Point of Sale
Warehousing & Distribution
the planning process at the head office and its execution
process at retail stores are best achieved by implementing a
seamlessly integrated Retail Management Solution on top of
Customer Loyalty
an industry standard Enterprise Resources Planning (ERP)
Figure: iVend Retail - A Complete Retail Offering solution from SAP.
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5. 2011
The retail processes at the
head office not only become more
streamlined, but also allow such
industry best practices to influence
and, hence, accelerate the growth
path for the retail chain.
The merchandising division
can now carry out processes
where operations receive complete
visibility of stock across the retail
chain and can effectively push
stock, rather than relying solely on
store requisitions. Additionally, the
merchandising department can raise
purchase orders in time to avoid
stock-out situations.
With comprehensive pricing and
promotions management, the head
office can run targeted campaigns
for specific stores, with period and
redeem loyalty points across the
entire network of stores.
Multiple gift card set-ups and
up-sell/cross-sell ensure the
customer does not leave the store
empty handed.
Information availability, and
hence the decision-making, is
further improved with numerous
reports and enquiries in different
categories of business operations
including sales, collections,
inventory and fulfillment which can
be exported to office Excel and
Word.
To conclude, despite constraints
on additional spending, retailers
are compelled to think beyond
the traditional operating models
and adopt new ways to increase
operational efficiencies and
maintain competitive advantages.
volume discounts. Promotions can also be based around buy- The enterprise, the warehouse and the retail processes have
some-get-some, sale totals and happy hour. to work in a far more integrated and harmonious fashion.
The integrated loyalty management module can achieve Retailers need to undergo a paradigm shift to align to the
an improvement in customer retention. It enables the set-up current economic reality, escalating capital investments in
and management of multiple loyalty schemes that allows the inventory and increased customer service demands. Such a
assigning of points on customer purchases. With the added paradigm shift can come only when the retailers embrace a
ability to define ageing criteria for loyalty points, customers can fully integrated enterprise-wide application set.
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