Mayank Dwivedi

8/6/2019 Mayank Dwivedi

1/73

RESEARCH PROJECT REPORT(MBA-413)

ONA Study of Role of Information Technology in Organized Retail

Management

Submitted in Partial Fulfillment of

Master of Business Administration

Programme: (2007-09)

OfUttar Pradesh Technical University, Luck now

Under the supervision of: Submitted by:

Anant Kr Srivastava Mayank Dwivedi

M.B.A. Department Roll no. 0701470025

S.R.M.S.C.E.T., Bareilly M.B.A.- IV Sem

FACULTY OF MANAGEMENT SCIENCE

Sri Ram Murti Smarak College of Engineering &

Technology, Bareilly.


2/73


3/73

DECLARATION

This project has been undertaken as a partial fulfillment of the requirement

for the award of the degree of Masters of Business Administration of Uttar

Pradesh Technical University, Lucknow.

The project was executed after the third semester under the supervision of

Mr. Anant Kr. Srivastava (SRMS CET, Bareilly)

Further I declare that this project is my original work and the analysis and

finding are for academic purpose only. This project has not been presented

in any seminar or submitted elsewhere for the award of any Degree or

Diploma.


4/73

ACKNOWLEDGEMENT

Much of my work to make this report would not have been possible without

the constant guidance and support of certain key-people.

I extend my sincere gratitude to Prof. S.P. Gupta for giving me an

opportunity to explore myself and in-depth knowledge.

I would like to express my deep-felt appreciation and gratitude to Mr.

Anant Kr. Srivastava, for his continuous support and benevolence he has

bestowed on me.

I would like to express my deep-felt appreciation and gratitude to IT Head of

Big Bazzar(Kanpur) Mr. Jitendra, IT Head Of Pantaloon Retail Ltd.

(Kanpur) Mr.Rohit Khanna & IT Head of Vishal Mega Mart(Bareilly)

Mr. Ovaish Khan & Mr. Rahul Mishra.

I would like to thanks Mr. Saurabh Pandey(Network Administrator HBTI-

Kanpur),because he help me in understanding the various aspects of IT

services are provided by retailers.

Thanks Mayank Dwivedi

Date IVth semester


5/73


6/73

Chapter-5 Findings,Limitations & Recommendations

Bibliography-

Annexure


7/73

A Study of the Role

of IT in Organized

Retail Management


8/73

Chapter 1

Introduction


9/73

As India surges high with its growth story, the retail sectorin the country is

bound to come across opportunities like never before. Till a few years back,

the retail sector in India was more of an unorganized one with petty vendors

dominating the chunk of the industry but now the scenario has fast been

changing. Finally, the sector is converting into what we call as organized

retailing.

Not only Indian corporate majors like Reliance, ITC and Pantaloon have

entered into the segment but more and more foreign players are also

showing interest in USD 350 billion Indian retail markets.

Today, we turn around and find huge shopping malls and multiplexes all the

way. Perhaps thats why the retail revolution is said to be spearheading the

real estate boom in India.

1.1-The retail sector boom

While the Indian real estate markets boom with organized retailing, the

segment ensures a fluffy growth pad for itself. According to the estimations

of KSA-Technopark, a retail consulting and research firm, organized

retailing in India will grow three-fold in the next 3-years, achieving the size

of USD 21.5 billion from the current one of USD 7.5 billion.
http://www.indianground.com/retail/retail-sector-in-india.aspxhttp://www.indianground.com/http://www.indianground.com/http://www.indianground.com/retail/retail-sector-in-india.aspx


10/73

Given the favourable growth patterns, expanding middle class and easing

economic policies, India is ranked as the most attractive emerging markets

for retail investment, even above Russia and China.

1.2-Growth Drivers

The Indian middle class

The growth story ofIndian retail sectoris based primarily on its huge middle

class. According to a study undertaken by the National Council for Applied

Economic Research (NCAER) The Growing Indian Middle Class, the

upper middle and high-income urban households in India will touch 3.8

crore by 2007 (from 1.46 crore in 2000).

The sheer size of its upbeat middle class market makes India a happening

market place for retail players.

Besides the number advantage, the purchasing power of Indian middle class

is also growing substantially with a year-on-year growth rate of 5-per cent in

its household income.
http://www.indianground.com/retail/fdi-in-retail.aspxhttp://www.indianground.com/retail/fdi-in-retail.aspx


11/73

According to NCAER, the 9.2 crore strong Indian middle class (whose

annual income ranges between Rs 2 lakh and Rs 10 lakh) is expected to

cross 15.3 crore by 2009.

Undoubtedly, such healthy trends corroborate that the retail sector boom is

here to stay in India on sustained basis.

1.3-BackGround Of the Study-

IT and IS provide new sources of advantage for business operation .Indeed

the operative phrase today is IT changes the way we do business.

Standard IT applications when accompanied by corresponding changes

internal business process can result in significant advantages. Indian

organised retail industry is poised for growth. Rapid state of change due to

speedy technological developments, changing competitive positions, varying

consumer behaviour as well as their expectations and liberalized regulatory

environment is being observed in organized retailing. Information is crucial

to plan and control profitable retail businesses and it can be an important

source of competitive advantage so long as it is affordable and readily

available

Retailing as simply defined is the end process of supply chain management

where there is a direct interaction with the end-user or the customer. Hence


12/73


13/73

businesses and it can be an important source of competitive advantage so

long as it is affordable and readily available. DSS (Decision Support

Systems) which provide timely and accurate information can be viewed as

an integrated entity providing management with the tools and information to

assist their decision making.

1.4-Potential of IT-

The role of IT in shaping tomorrows business operations is distinctive one

IT has become a fundamental enabler in creating and maintaining a flexible

business network .Using a framework the breaks IT enabled businees

transformation into five levels I describe each levels characteristics and offer

guidelines for deriving maximal benefits. Each organization first determine

the level at which the benefits are in line with the cost or efforts of the

needed changes and then proceeded to higher levels as the demands of

competition and the need to deliver greater value to the customer increases.

About Retailing- Retailing consists of those business activities involved in

the sale of goods and services to consumers for their personal, family or

household use. It is the final stage in a channel of distribution, which

comprises all of the businesses and people involved in the physical

movement and transfer of ownership of goods and services from producer to

consumer.

Retailing involves


14/73

Interpreting needs of the consumers

Developing good assortments of merchandise

Presenting them in an effective manner so that consumers find it easy

and attractive to buy.

Retailing differs from marketing in the sense that it refers to only those

activities, which are related to marketing goods and/or services to final

consumers for personal, family or household use. Whereas marketing,

according to American Marketing Association, refers to the process of

planning and executing the conception, pricing, promotion and distribution

of ideas, goods and services to create exchanges that satisfy individual and

organizational objectives.

Retailers include street vendors, local supermarkets, department stores,

restaurants, and hotels. Barbershops, airlines and even bike and car

showrooms. Still retailing may or may not involve the use of a physical

location. Mail and telephone orders, direct selling to consumers in their

homes and offices and vending machines - all fall within the purview of

retailing. In addition to it, retailing mayor may not involve a retailer.

Manufacturers, importers, non-profit firms and wholesalers are acting as

retailers when they sell goods and/or services to final consumers.

Whatever the form of retailing, a retail marketing strategy defines the

execution of the marketing process and facilitation of customer satisfaction.

This retail marketing strategy involves selecting a retail target market (i.e.

the carefully/exactly identified group of final consumers that a retailer seeks

to satisfy) and then implementing the corresponding retail marketing mix

(i.e. a combination of product. price, promotion and distribution strategies

that will satisfy the retail target market). The elements of the marketing mix


15/73

encompass the facets shown in the table below. The table depicts consumer

service as the crux of the whole activity.

The choice of a store location has a profound effect on the entire business

life of a retail operation. A bad choice may all but guarantee failure, a good

choice success. This aid takes up site selection criteria, such as retail

compatibility and zoning, which the small storeowner manager must

consider after making basic economic, demographic, and traffic analyses. It

offers questions the retailer must ask (and find answers to) before making

the all important choice of store location. The first step in choosing a retail

business location takes place in your head. Before you do anything else,

define your type of business in the broadest terms and determine your long-

term objectives. Write them down. This exercise will help you later in

choosing a retail location. In picking a store site, many storeowners believe

that it's enough to learn about the demographics ("people information" like

age, income, family size, etc.) of the population, about the kind of

competition they'll be facing, and about traffic patterns in the area they're

considering. Beyond a doubt these factors are basic to all retail location

analysis. Once you've spotted a tentative location using these factors,

however, you've only done half the job. Before you make a commitment to

moving in and setting up, you must carefully check several more aspects of


16/73

the location to help insure your satisfaction with -- and most importantly

your success at - the site you've chosen.

1.5-Role of IT in organized retailing-

Indian organised retail industry is poised for growth. Rapid state of change

due to speedy technological developments, changing competitive positions,

varying consumer behaviour as well as their expectations and liberalized

regulatory environment is being observed in organized retailing. Information

is crucial to plan and control profitable retail businesses and it can be an

important source of competitive advantage so long as it is affordable and

readily available. DSS (Decision Support Systems) which provide timely

and accurate information can be viewed as an integrated entity providing

management with the tools and information to assist their decision making.

The study, exploratory in nature plans to adopt a case study approach to

understand practices of organized retailers in grocery sector regarding

applications of various DSS tools. Conceptual overview of DSS is

undertaken by reviewing the literature. The study attempts to describe

practices and usage of DSS in operational decisions in grocery sector and

managerial issues in design and implementation of DSS.

Comparison across national chain and local organized retailer in grocery

sector reveals that national chain having implemented ERP partially are


17/73

mostly using the same for majority of operational decisions like inventory

management, CRM, campaign management. Two local players use spread

sheets and in house software to make the above operational decisions. The

benefits realized remain the same across the retailers. Prioritization as well

as quantification of benefits was not communicated. The issues of

coordination, integration with other systems in case of ERP usage, training

were highlighted. Future outlook of DSS by the respondents portrayed a

promising picture.

Retailing as simply defined is the end process of supply chain management

where there is a direct interaction with the end-user or the customer. Hence

forth availability, assortment, display, proper handling of product plays a

vital role in a competitive world.

Organized retail stores are characterized by large professionally managed

format stores. They provide goods and services that appeal to customers, in

an excellent ambience that is conducive for shopping, created based on

consumer preference analysis, and offer good value as some of the benefits

of large-scale purchases are passed on to consumers. In India, retail has its

deep root since long back and that is why India is being known as Nation

of Shopkeepers with about 12 million retailers by 2003.Organised retailing

contributes 2% to the total Indian retail sector and expected to increase to


18/73

5%, by 2010. Retail sector forms 10-11% of GDP. It is attractive in terms of

investment, employment opportunity, and usage of technology. Indian

organised retail industry was worth Rs. 13,000 crore in the year 2000 and

was expected to grow by 30 per cent in the next five years touching Rs.

45,000 crore in 2005. Food and personal care amounted to Rs. 1000 crore in

2000.

Retailing is in a rapid state of change due to speedy technological

developments, changing competitive positions, varying consumer behaviour

as well as their expectations and liberalized regulatory environment. In such

a scenario, information is crucial to plan and control profitable retail


long as it is affordable and readily available. DSS (Decision Support

Systems) which provide timely and accurate information can be viewed as

an integrated entity providing management with the tools and information to

assist their decision making.

In west, retail businesses have been the early adopters of Information

Technology (IT). As there is a need to capture accurate information and

make it available not only within the store but send it to warehouse,

distributors and manufacturers in real time to manage the short shelf life of

some goods in grocery sector and costs of inventory, varied DSS tools have


19/73

been adopted by organised retailers. VMIs- vendor managed inventory

systems, Scanner at the counters- point of sales systems, RFID- radio

frequency identification, OLAP (online analytical processing), supply chain

management systems, forecasting systems, CRM- customer relationship

management systems, ERP- enterprise resource performance system etc. are

the tools used by organized retailers in developed nations.

Most retailers collect and have access to huge amount of data, collected from

day to day operations e.g. customer loyalty data, retail store sales and

merchandise data, demographic projection data etc. Currently retailers are

data rich but information poor. There is a great potential to develop systems

that enable analysts and decision makers to manage, explore, analyze,

synthesize and present data in a meaningful manner for decisions.

Retail managers are in a constant need for right kind of information for

making effective decisions. Modern advancements in ITES (Information

Technology Enabled Services) and communication has permitted

deployment of DSS (Decision Support Systems). DSS can be defined as

computer based systems that help decision makers to confront ill structured

problems through direct interaction with data and analysis models.

DSS is computer enabled methodology for using the database.


20/73

DSS are basically characterized by three capabilities; dialogues, data and

modeling- the emphasis of each varies from organization to organization.

DSS includes a wide variety of systems, tools and technology that support

decision making. EIS(electronic information system),ESS( Electronic

support system),GIS(geographic information system),OLAP(online

analytical processing),software agents, knowledge discovery system and

group DSS all can be considered as DSS .Broadly two major categories6 of

DSS namely enterprise wide DSS and desktop DSS exist . Enterprise wide

DSS are linked to large data warehouses and serve several decision makers

in a company whereas desktop single user DSS are small systems residing

on individual managers personal computer. Thus it is an interactive

computerized system that gathers and presents data from a wide range of

sources, typically for business purposes. The organization needs to pool in

both internal and external data, software, customer data, models and trained

people to appreciate and use the systems for decision making which will

help build sustainable competitive advantage. This can be depicted in the

following diagram-


21/73

As seen from the above, external data and software alone would

not provide competitive advantage, but organizations own customer and

business data, models which convert data into useful information and

people, who will operate the systems, analyze outputs and make decisions

based on the information provided-all these would be required for

competitive edge. Companies need to make decisions faster, across more

channels and product lines, leverage more data, under greater regulatory

demands and competitive pressures, and with more complicated constraints

and trade-offs. DSS entails development of approaches for applying


22/73

information systems, technology to increase the effectiveness of decision

makers.

Each sector with unique characteristics poses very different challenges to an

organization; hence in-depth understanding of one sector would provide

deeper insight into the requirement of DSS to enable managers in that sector

to take effective decisions. The proposed study aims at understanding DSS,

its application in grocery sector and issues arising out of implementation of

DSS in Indian retail grocery sector.

1.6-Objectives of the study-

1. To study the extent of use of IT in organized retailing-In this I devoted my

sincere efforts in finding out that upto what extent the retail organizations

are using IT based services.

2. To study the retailer perception towards the IT based services- In the

study I tried to find out that what retailers think about IT services and how

they perceive these services.

3. To explore and suggest suitable business processes for further

implementation- What business model a retailer should adopt and what

changes he want in implementing the IT services.


23/73

1.7-Scope of the study-

The study will help in understanding the use of IT services in serving

customers in much more affective manner, and what are the things a retailer

needs to know while implementing IT based services and the main factors

which affect or influence the implementation of IT services. Study will

reveal which are important factors in customer point of view so that by

adding new service elements along with providing better quality in

delivering current service, difference may be created.

1.8-Contribution-

A study about the role of IT in organized retailing will enhance my

knowledge about the benefit of IT in organized retailing. This study will

help the companies to know the various aspects of IT, how IT can be more

successfully implemented, to what extent IT is playing crucial role in

retailing, & add value to retailer& customer.


24/73

Chapter-2

Literature Review


25/73

2.1-Growth of retail in INDIA-

Middle East Vision for 2012 at the company showroom in Olaya

Street yesterday Despite the economic downturn, the retail sector in the

Middle East is projected at $500 billion by 2010 with the GCC accounting

for more than 60 percent of the total retail in the region, said Gautam Hari

Singhania, chairman and managing director of Raymond Ltd. Singhania

added that a major share of the market would be held by Saudi Arabia.

With the strong presence of Indian, European and American expatriates, the

region provides unparalleled business prospects in the retail market,

Singhania said at a press conference.

Retailing in India is receiving global recognition and attention and this

emerging market is witnessing a significant change in its growth and

investment pattern. It is not just the global players like Wal-Mart, Tesco

and Metro group are eying to capture a pie of this market but also the

domestic corporate behemoths like Reliance, KK Modi , Aditya Birla

group, and Bharti group too are at some stage of retail development.

Reliance, announced that it will invest $3.4 billion to become the


26/73

country's largest modern retailer by establishing a chain of 1,575 stores

by March 2007. The last couple of years have been rosy for real estate

developers and the retailers are finding suitable retail space in prominent

locations. The industry is buoyant about growth and the early starters are

in expansion mood. There is increased sophistication in the shopping

pattern of consumers, which has resulted in big retail chains coming up

in most metros; mini metros and towns being the next target. Consumer

taste and preferences are changing leading to radical alteration in

lifestyles and spending patterns which in turn is giving rise to new

business opportunities. Companies need to be dynamic and proactive

while responding to the ever-changing trends in consumer lifestyle and

behavior.

Retailing in India is currently estimated to be a USD 200 billion

industry, of which organised retailing makes up 3 percent or USD 6.4

billion. By 2010, organised retail is projected to reach USD 23 billion

and in terms of market share it is expected to rise by 20 to 25 per cent.

The report also predicts a stronger retailer growth than that


27/73

of GDP in the coming five years.

The generic growth is likely to be driven by changing lifestyles and by

strong surge in income, which in turn will be supported by favorable

demographic patterns. Rapid growth in international quality retail space

brings joy to shoppers and shopping malls are becoming increasingly

common in large cities, and announced development plans project at

least 150 new shopping malls by 2008. The number of department stores

is growing at a much faster pace than overall retail, at 24 per cent

annually. Supermarkets have been taking an increasing share of general

food and grocery trade over the last two decades.

Development of mega malls in India is adding new dimensions to the

booming retail sector. Shopping experience in the nation of shopkeepers

is changing and changing very fast. There is significant development in

retail landscape not only in the metros but also in the smaller cities. Even

ITC went one step ahead to revolutionize rural retail by developing

Choupal Sagar a rural mall. On one hand there are groups of visionary

corporate working constantly to improve upon urban shopping

experience and on the other hand some companies are trying to infuse

innovative retail experience into the rural set up.


28/73

After leading the IT bandwagon, India is poised to grow as a Retail hub. It is

imperative to sustain the modernization of the retail sector and dispel the

myth that the game is big Vs smallortraditional Vs modern ororganized Vs

unorganizedorlocal Vs foreign . What is needed is to create an appropriate

environment to propel retail where all benefit, he said.

India's huge population, he said, has the potential for mammoth consumption

if given the power of spending and that is only possible through large scale

development generating employment which is already happening with retail

as the driving force.

Talking about the key challenge areas for the retail growth Mr. Nath

expressed concern over escalating real estate cost, scarcity of skilled

workforce and structured supply of merchandise which he assured would be

tacked in co-operation with the retail industry and the support organizations.

Revealing key figures from the India Retail Report 2007, Amitabh Taneja,

Chief Convenor of India Retail Forum said that the organised sector


29/73


30/73

reduced prices of farm sector goods, rural farmers benefit by way of higher

returns for their produce.

With several States allowing retailers direct access to farm produce, there is

a new revolution taking shape in rural India. Farmers are cultivating crops as

per specifications and requirements of retail companies such as Reliance,

ITC, Godrej and many others. More than 2,000 small farmers, for instance,

are benefiting from such arrangements in Andhra Pradesh, he said.

Talking about the global perception about India, about its economic might

and potential in terms of market size, Mr. Kamal Nath said that there had

been a drastic change over the last few years. While the buoyant

manufacturing and services sectors had contributed in fuelling consumption

demand in urban as well as rural areas, the government on its part remained

committed to improving infrastructure and providing a congenial

environment for indigenous business modules to blossom and harness

domestic as well as foreign investment to optimum levels. Economic

prosperity also meant higher standards of living and higher consumption

levels, and only an efficient and organised Retail sector could ensure and

sustain this growing demand of the evolved consumer.


31/73

But unlike the experiences in most other countries, growth of Indian retail

is not going to be a staggered and time-taking process: India has already

shown the world how quick it can adapt to hi-tech products and services and

will again set a record of sorts in setting up world class retail formats across

the country in record time. In the next five years India should have retail

entities strong enough to compete with the best in the world, added Mr.

Nath.

At present, he said, India's retail sector is largely unorganized, with about 15

million tiny outlets catering to consumer needs across the country it

employs the second-largest number of people after agriculture. Organised

retail is now focused primarily on the 300 million urban "middle classes''

and an additional 200 million rural rich, who form a consumer market worth

more than US$100 billion. So, there is enough ground for the modern and

the traditional formats to co-exist.

Narrating India's economic growth story Mr. Nath highlighted three

important things:

One - that here is a society in which the fruits of development are more

evenly spread, in which democracy is more real and palpable to the mass of


32/73

the population, which makes for a stable social environment that is attractive

and reassuring;

Two - that India is an enormous market, of which you are seeing only the tip

of the iceberg;

And Three - the tremendous resilience of India: we survived the zooming oil

prices, the fluctuating dollar and global recession, with barely a hiccup.

The Indian economy is integrating with the world, and yet it simultaneously

has its own dynamics, which cushion global shocks as in no other country.

India had kept the retail sector largely closed to outsiders to safeguard the

livelihood of nearly 15 million small storeowners and only allows 51 per

cent foreign investment in single-brand retail with prior government

permission. FDI is also allowed in the wholesale business. Single-brand

retailers such as Louis Vuitton, Fendi, LLadro, Nike and Toyota can operate

now on their own. Metro is already operating through the cash-and-carry

wholesale mode.

The issue of Foreign Direct Investment (FDI) has been debated time

and again as the Indian Government has been under pressure to open up

further. The policy makers continue to explore areas where FDI can be

invited without hurting the interest of local retail community. Mr. Kamal


33/73

Nath confirmed that the Government is considering opening up of the retail

trading for select sectors such as electronic goods, stationery, sports goods,

and building equipment.

To understand the reasoning and implications of such moves it was vital to

size up the entire retail market in various segments and consumption levels

across product categories with share of the organized segment and it was just

the right time for India Retail Forum to take the initiative of researching the

scope of retail businesses in India, said R S Roy, Editorial Director, Images

India Retail report 2007.

Mr. Nath commended the pioneering efforts of the Images Group and India

Retail Forum in compiling and pooling together relevant yet highly scattered

and difficult to get information on this vital sector, which helps investors get

a better understanding of the unfolding scenario. India Retail Report 2007

will set benchmark figures on consumer spend, retail market size across key

categories and segments with scope and also performance of key players and

their expansion plans.

In his address Dr. Ajay K Dua, Secretary, Department of Industrial

Policy & promotion, Ministry of Commerce & Industry said, The

growth of the Indian economy is now manifesting itself in the growing


34/73

purchasing power of its citizens. A ten to twelve per cent increase in the

economy's disposable income and a much higher one in urban areas is also

reflecting itself in the way goods and services are bought and sold.

There would be a real revolution in the Indian retail industry, if the changes

being witnessed in the metropolitan and other tier-one towns percolate to all

the 784 urban settlements, with populations above 50,000 persons. This is

likely to happen as the real estate prices in the large metropolitan towns are

increasingly becoming prohibitive and consequently giving distinct

advantage to those who are already in the business of retailing, viz., the

traditional mom & pop stores. Rural and semi-urban incomes are also

expectedly to grow much faster in future, once the agriculture growth rate

pushes up. Our civic laws concerning construction and property

development also need to be re-looked, as the earlier convenience-stores get

replaced by shopping malls and other formats of organized retail trade, he

added.

Expressing concern over the consumption and mall development trend,

Editorial Director of this mega research of India retail research, R S Roy

called upon the entire retail fraternity, concerned Govt. departments and the

supporting organizations to work towards giving Indian retail - a face of

India. India Brand Story can travel across the globe with 'Delhi Hat' type


35/73

shopping cum entertainment centres opening not only across India but all

over the world. Public private partnership can revitalise the formats like

Khadi Bhawans that runs one of the largest retail networks in the world, and

also govt. state run emporia, he said.

As India emerges as one of the most potential markets for global brands and

retailers and retail reinvents the way modern Indians celebrate their spending

power, India that takes pride in its rich culture, heritage, art, craft and variety

of wares must capitalize on this ever escalating consumerism and channelise

the spending towards healthy consumption for overall development of the

country.

Initiated by India Retail Forum and Images F&R Research, world's some of

the top global research & consulting firms like AT Kearney, Ernst & Young,

PWC, Technopak, KPMG, ICICI, AC Nielsen-ORG Marg, Synovate,

Cushman & Wakefield etc. contributed for the India Retail Report 2007

research.

IMAGES India Retail report 2007 sizes up the entire retail market in various

segments and consumption levels across product categories with share of the

organized segment. Profiling formats and retailers therein, the study, full of

facts and figures, is expected to reveal many interesting facets of the Indian


36/73


37/73

development tools, it will also contain exclusive and investigative editorial

content that we can promise, no other media has access to, he added.

Besides retail news feeds, indiaretailing.com will boast an exclusive

database of retailers, retail real estate developers, retail technology and

systems firms, retail finance outfits, store design and shopfit pros, human

resource sourcing and jobsite management, exclusive video interviews, live

coverage of retail events and many more.

The portal is expected to have around 200000 page views in the very first

month of operation and is strongly geared up to enjoy a very high and

filtered subscriber number. To begin with the subscription number for daily

News Letters is expected to reach over 25000 key people in the retail

industry

The Larger Picture

Indian economy has shown an impressive growth of over 6 per cent for

last five years and continues to surge ahead. GDP growth rate in 2003-04

recorded a fifteen year high of 8.5% and subsequently maintained a

steady growth for the next two years. Real GDP growth accelerated from


38/73

7.5 per cent during 2004-05 to 8.4 per cent during 2005-06 on the back

of buoyant manufacturing and services activity supported by a recovery

in the agricultural sector. The central bank forecasts similar growth of

7.5-8 percent during 2006-07. With strong economic growth

consumerism is increasing in the country and India is the fourth largest

economy as far as purchasing power parity is concerned, just behind

USA, Japan and China.

Organised retail in India has the potential to add over Rs 2,00,000 crore

($45 billion) business by the Year 2010 generating employment for

some 2.5 million people in various retail operations and over 10 million

additional workforce in retail support activities including contract

production & processing, supply chain & logistics, retail real estate

development & management etc., said Mr. Kamal Nath, Commerce &

Industry Minister .

Consumer Trend

India is currently having the largest young population in the world and

54 per cent of Indias population is below 25 years of age and 80 per

cent are below 45 years. As per Indias Marketing Whitebook (2006) by

Businessworld, India has around 192 million households. Of these only a

little over six million are affluent that is, with household income in

excess of INR215, 000. Another 75 million households are in the


39/73

category of well off immediately below the affluent, earning between

INR45,000 and INR215,000. This is a sizable proportion which offers

excellent opportunity for organized retailers to serve.

AC Nielsens Retail and Shopper Trends 2004 Report made the

following observations on shoppers behavior in India:

(1) Indian shoppers spend an average of INR2500 on food, groceries and

personal care items every month and

(2) Convenience stores are booming in most markets, as the number of

such stores exceeds 80,000.

According to the report, 48 per cent of shoppers in India admit that they

love to try new things, making them the most novelty seeking shoppers

around the region and total average monthly expenditure is only $50, of

this, $21 is spent on fresh food, comprising 42 per cent of the entire

monthly spend. Indians also appear to spend more on groceries and

personal care items.

Business communities believe that sizable disposable income in India is

concentrated in the urban areas and well off and affluent classes; income

distribution is unequal compared to other Asian economies. In fact, the

20 million middle class home in rural India equal the number in urban

India and thus have the same purchasing power. Therefore, there is

significant and considerable opportunity for organized retailers in the

rural areas. There is no denying that the rural market holds immense

promise for the organized retail but companies ponder over how to serve

that market profitably.


40/73

Unlike the urban market, it is less developed in terms of infrastructure

and facilities. More than any thing else, the larger issue is to find out a

suitable business model and retail format to fit local taste and preference.

Of course cost of doing business in rural market would be lesser

compared to urban market but reaching out to the mass is a concern. It is

not impossible but a bit more difficult. For example the most successful

and the largest incorporation Wal-Mart started in the rural market where

as competition started in the urban market. This retailer has proved that

it is important to understand how do you operate your business model

rather than where you do it.

Given the increasing urban exposure of rural India, the urban and the

rural upper-income groups can form an interesting continuum market,

giving it a scale of 23 million households, or 115 million consumers. In

2006-07, the consuming class would be about 60 million households, or

300 million consumers.

NCAER data shows that for 1998-99, for a basket of 22 FMCG productsit tracks, a total of over Rs 91,500 crore was spent. Of this, 37% was

spent by the two lowest-income groups in rural India, and only about

20% by the top two income groups in urban areas. This is, perhaps, the

best and only statement of the structure and potential of the Indian

market. Hence, marketers have to worry about purchasing power of

consumer not where he is living. For example there are nearly 42,000

rural haats, average number of sales outlets per haat is 300 and average

sales per outlet is INR 900 and average foot fall in a haat is about 4,500.

In rural India there are 50 million Kisan Credit Card (KCC) holders and


41/73

in 2002-03, LIC sold 50 percent of its policies in rural India. These are

some of the indicators how rural India is performing.

2.2-Drivers of Retail

On one hand favorable demographic and psychographic changes in the

Indian consumer class, rising income, international exposure, availability

of quality retail space, wider brand choice and better marketing

communication are some of the factors driving Indian retail. On the

other side a lot depends on the preparedness of Indian retailers in terms

of having suitable formats, scalable business model, appropriate

technology and relevant organization capability for the success.

Currently the country has a population of over one billion, 60% of which

is under 30 years of age. This means majority of the population is young

and working class with higher purchasing power. The low median age of

population means a higher current consumption rate which augurs well

for the retail sector. Consumer spending in India has grown at over 12

percent since mid-1990s and 64 per cent of Indian GDP is accounted for

by private consumption. Over the last decade, the average Indian

spending has gone up from INR 5,745 in 1992-93 to INR 16,457 in

2003-04 and is expected to grow around its trend rate of 12 per cent

There are fundamental but significant changes underway in this country.

In January 2006, the government announced that foreign companies can

own up to 51 percent of a single-brand retail company, such as Nike or


42/73

Adidas. This decision would certainly encourage retailers such as Zara

and Gap to enter this market. Tesco is planning to enter the market

through a partnership with Home Care Retail Mart Pvt Ltd and expects

to open 50 stores by 2010.

2.3-Use of IT in Retail market-

In India, organized retailing, is contributing 3% of total retail sector and is

still evolving. However, it is expected to increase to 5%, by 2010. Retail

sector forms 10-11% of GDP. It is alluring in terms of investment,

employment opportunity, and usage of technology.

Retailing is in a rapid state of change due to speedy technological

developments, changing competitive positions, varying consumer behavior

as well as their expectations and liberalized regulatory environment. In such

a scenario, information is crucial to plan and control profitable retail


long as it is affordable and readily available.

2.4-Retailing in India-

Indian organised retail industry was to the tune of Rs. 13,000 crore for the

year 2000. Organised retail industry was expected to grow by 30 per cent in


43/73

the next five years and was expected to touch Rs. 45,000 crore in 2005, by

2010.Indian retailing is clearly at a tipping point. India is currently the ninth

largest retail market in the world.

In west, many organisations have deployed ERP as the foundation of their IT

Set Up, organised retailers are exploring CRM (customer relationship

Management), BI (Business Intelligence) , RFID (Radio Frequency

Identification Deployment).

Each sector with unique characteristics poses very different challenges to an

organisation; hence in-depth understanding of one sector would provide

deeper insight into the requirement of DSS to enable managers in that sector

to take effective decisions. The proposed study, exploratory in nature aims at

understanding DSS, its application in sector and issues arising out of

implementation of DSS in Indian retail sector.

In west, retail businesses have been the early adopters of Information

Technology (IT). As there is a need to capture accurate information and

make it available not only within the store but send it to warehouse,

distributors and manufacturers in real time to manage the short shelf life of

some goods in grocery sector and costs of inventory.


44/73


45/73

sed DSS for different decision situations using two specific measurements:

DSS spread and DSS complexity. The results obtained suggest that the

framework which was developed by the authors is useful for categorizing the

degree of maturity of organizations regarding their usage and development

of actual DSS applications.

Implementation challenges of Decision Support Systems in Pricing for retail

managers. With the evolution/explosion of quality data and computing

ability, retail managers have desired to implement demand based

management. Demand based management uses statistical models to predict

consumer price response using historical information. Many firms are

offering software to perform price optimization.

Any DSS for strategic, tactical or operational planning is based on

interaction of information systems and decision models and progressive

transformation of data into information and knowledge. DSS for supply

chain planning (SCP) decisions SCP system has an embedded decision

engine that uses a two-stage stochastic program as a paradigm for

optimization under uncertainty. The system has been used for decision

making in diverse domains, including automotive manufacturing and

consumer products.


46/73

The role of model-based decision making is gaining increasing acceptance

as organizations try to gain a competitive advantage. The progress in

information systems development has led to a natural coupling between the

data modeling, symbolic modeling and What-if analysis phases of a

decision support system (DSS). DSS tools help companies automate an

enterprise-wide assessment of cause and effect. The software monitors "soft"

factors, which indicate whether a certain strategy has been successful, as

opposed to operational measures. These tools can help in creating a culture

of management based common views and goals.

The goal of the DSS system is to improve marketing strategy and marketing

resource allocation for a large multi store, multi department retailer.

However effectiveness of the system will depend on willingness on the part

of managers to adapt. DSS evolves constantly as its users and developers

interface, generate problems, questions and desires.

2.5-DSS in retailing -

Decision support "represents one of the key enabling technologies allowing

corporations to unlock useful information hidden away in databases."

Decision support queries need to be executed against large databases which

often grow into the "hundreds of gigabytes" range. The technology is

prohibitively expensive, except for the largest retailers such as Walmart, it is


47/73


48/73

Advantages of DSS are: faster data accessibility, stock availability resulting

into no lost sales due to stock outs, better choice of assortments, timely

distribution, tracking buying patterns of consumers and quick decisions.

Softwares in retailing-

Fusion Retail

Collection of smartest retail techniques & ideas

Out-of-the-box, mature and ready to use retail automation software

Efficient & error free data entry

Real time reports with on-line filters and zoom in

Customizable search for product, customer and supplier

Fastest implementation

Highly scalable & flexible

Fully modular system

Secure, reliable & robust database

Manage chain stores (across cities & countries)

Manage your sales staff

Integrated financial accounting

Integrated customer loyalty programs

Integration with Tally accounting software


49/73

Third party link for integrating with other systems

Utilize a wide range of barcode & POS hardware

Ongoing upgrades

Chapter-3

Research Methodology


50/73

3.1-Research Design Descriptive and conclusive3.2-Data used-Both primary as well as secondary.

3.3-Tools & Instruments-Questionnaire & Personal Interview3.4Sample plan-

3.4.1 Sampling method-Judgment based convenient sampling34.2 Sample Size- 3 Retailers.3.4.3Sample area- Bareilly, & Kanpur City

3.1-Research Design-

Fundamental to the success of any formal marking research project is sound

research methodology. A research design purely and simply the framework

or plan for a study that guides the collection and analysis of the data.

In my research I use Descriptive & conclusive research design.

It involve collecting quantitative information & Involves gathering data that

describe events and then organizes, tabulates, depicts, and describes the data.


51/73

It Uses description as a tool to organize data into patterns that emerge during

analysis .It Often uses visual aids such as graphs and charts to aid the reader.

3.2-Data used-

The research was conducted using primary as a source of information and

the method adopted was 'surveying'. Survey is the most commonly used of

primary data collection in market research. This widely used of its extreme

flexibility.

Survey research is a systematic gathering of data from respondents through

questionnaires. The purpose of research is to facilitate understanding the role

of IT in organized retailing.. A questionnaire is a formal list of questions to

be answered in the survey.

The questionnaire formed contained direct question, which was close-ended.

The questions were framed keeping the objective of research in mind and in

such a way that they are able to extract the required information from the

respondents.

3.3-Tools & Instruments-

The task of data collection begins after a research problem has been defined

and research design is chalked out. While deciding about the method of data


52/73

collection to be used for the study; the researchers should keep in mind two

types of data i.e. Primary and Secondary data.

The primary data are those which are collected afresh and for the first

time, and thus happen to be original in character. The secondary data on

other hand are those which have already been collected by someone else and

which have already been passed through the statistical process.

The data used for the present research is primary data. The different

methods that are used for collecting primary data are as follows:

A) Contact Method:

The 'contact method ' considering the short coming was selected to personal

interviewing. This method being versatile was arranged interviewing as it

made concerned approach to the respondent.

B) Questionnaire Method:

The method of data collection is quite popular and is being adopted by

research workers, private individuals and organization.

3.4- SAMPLING PLAN:


53/73

The Sampling plan was designed as follows:

Sampling Unit :

Organized Retailers

.

Sample Size: To gather information which could form a reliable

database? The sample size was as follows:

Retailers - 3

Sampling method

Convenient & judgmental

Sampling area

Bareilly & Kanpur city


54/73

Chapter-4

Data Analysis & Interpretation


55/73

Analysis of data

Q.1-Are you using IT based services in your retail store?

No %

YES 3 100

NO 0 0

YES


56/73


57/73

business operation.Retail stores have implemented IT services in all sections

of stores.

Q.3-IN which area of store you have implemented IT successfully?

No. %

Order Fulfillment 3 100

Billing 3 100Order Taking 0 0

Procuring 3 100

0

20

40

60

80

100

120

Order

Fulfillment

Billing Order

Taking

Procuring


58/73

Interpretation-All retailers are using IT based services to reduce their

cost & to serve customers in an effective manner. In my study no retailers

are providing the facility of E-retailing.

Q.4-How IT is helping you in serving customer?

Yes No

Customers are better

served

3 0

0

0.5

1

1.5

2

2.5

3

Yes No

Customers are bet

served

Yes No

Customers are not

friendly with the use of

IT

0 3


59/73

Customers are not friendly with the use of IT

0

0.5

1

1.5

2

2.5

3

3.5

Yes No

Customers are not frien

with the use of IT

Interpretation-With the effective use of IT customers are served &

retailers are creating value for them. Customers are very much aware about

aware about the IT. They perceive IT as a enabler for themselves.


60/73

Q.5. Your IT based services are whether internally managed or

outsourced!

PercentageOutsourced 100

Internall managed 0

0

10

20

30

40

50

60

70

80

90

100

Outsourced Internall managed

Interpretation-All the IT services which are using by the retail stores

are outsourced. They purchased the IT services from various service

providers.


61/73

Q.6-How IT is helping in Supply chain?

Percentage

Highly Supportive 100Suuportive 0

Not suuportive 0

Percentage

0

20

40

60

80

100

120

Highly Supportive Suuportive Not suuportive

Interpretation-The use of IT services are very supportive in every

manner or in every aspects of retailing. Pantaloon & Big bazaar uses WAN

for its retail store format.


62/73

Q.7- Customers are satisfied by the use of IT or not?

Percentage

Highly Satisfied 100

Satisfied 0Dissatisfied 0

0

10

20

30

40

50

60

70

80

90

100

Highly Satisfied Satisfied Dissatisfied

Percentage

Interpretation- The benefits which It based services are providing

customers perceive them fruitful for them. Customers are highly satisfied

with the use of IT based services.

Q.8- How much IT has changed the face of organized retailing?

Percentage

0-40% 0

40-60% 0

Above 60% 100


63/73

Percentage

0

20

40

60

80

100

120

0-40% 40-60% Above 60%

Interpretation- With the use of IT the face of retailing has changed

drastically. IT is playing a crucial role in providing value to both retailers &

customers. The whole face of retailing experiencing the benefit of IT.

Q.9- Are your IT system is working properly or need some changes?Interpretation-Here through research I found that it depends on the area in

which retail organization using IT services. I found that most of the retailers

are working on SAP.


64/73

SAP-SAP provides a comprehensive range of enterprise software

applications and business solutions to empower every aspect of your

business.

You gain the visibility to pinpoint inefficiencies and the capabilities to

transform them into competitive advantage. The foresight to identify new

opportunities and the agility to respond. The functionality to optimize your

operations and resources to extend best practices to your entire value

chain.

Vishal mega mart using SAP 5.0. But after 2 months from now they will be

able to work on SAP new version 6.00.

Write now organizations are successfully using IT services. Their systems

are efficiently working. But as the time passes they need changes.

Q.10- If system fails for a period then in how much time it is trouble

shooted?

Answer of this question is varying from organization to organization. Big

bazaar & pantaloon said that It depends on the nature of problem.They never

encounter with any such problem.

Vishal mega mart said that they have a 24*7 solution named RXCL.


65/73

But it does not take more than 30 min to solve that issue.

The most important thing is that it does not affect the sale of stores.


66/73


67/73

3. Retailers in India do not provide E-Retailing services.

4. IT is creating value for both retailers as well as customers. It is giving an

edge to the retailer.

5. IT is helping in all manner means Procurement, order fulfilling, billing.

6. The various IT services which are using by Retailers are outsourced.

7. Organized retailing is in its nascent stage in India but it is developing in a

very fast pace as compared to other sectors.

8. with the use of IT based services retailers are able to meet customers

demand in vary rapid manner.

9. With the use of IT based services a close relationship is maintained with

the suppliers as well as customers.

10. Retailers are highly dependent on IT based Services & are better serving

to its customers.

Limitations

1. The study is confined to only 3 retail stores named Pantaloon, Big bazaar

& Vishal Mega Mart.

2. As I was concerned only a very limited area such as use of IT based

services.

3. The study is confined to very limited area of retailing.


68/73

Recommendations

1. E-retailing facility should be provided to increase customer bases.

2. IT based services should increases in all functions of retailing.

3. Retailers increase or update its IT based services according to time.


69/73

Bibliography

1. www.indiaretailing.com

2. www.arabnews.com

3. www.icmrindia.org

4. www.thehindubusinessline.com


70/73

5. www.indiaground.com

6. www.rediff.com

Report-

1. A study from Ankush Sharma (IIM-A)

2. A report from TSMG (Tata Strategic Management

Group)

Books-

1 .Retail Mgmt.-Berman & Evans

2. Retail Mgmt.-Lusch & Griffith
http://www.indiaground.com/http://www.indiaground.com/


71/73

Annexure

Questionnaire

1. Are you using IT based services in your retail store?


72/73

a) (Yes) b) (No)

2. To what extent you are implemented IT in your retail store?

a) (0-40%) b) (40-60%) c) (Above 60%)

3. IN which area of store you have implemented IT successfully?

a) (Order fulfillment) b) (Billing) c) (Order taking) d) (Procuring)

4. How IT is helping you in serving customer?

a) Customers are better served.

b) Customers are not very friendly about IT.

5. Your IT based services are whether internally managed or outsourced!

a) Outsourced b) Internally managed

6. How IT is helping in Supply chain?

.

a) Highly Supportive b) supportive c) Not supportive

7. Customers are satisfied by the use of IT or not?


73/73

a) Highly satisfied b) satisfied c) Not satisfied

8. How much IT has changed the face of organized retailing?

a) 0-40% b) 40-60% c) above 60%

9. Are your IT system is working properly or need some changes?

a) Efficiently working b) need changes.

10. If system fails for a period then in how much time it is trouble shooted?

a) 0-10 min b) 10-30 min c) 30 min -1 hour d) more than 1 hour

Documents

Mayank Dwivedi