Global chains to introduce handheld scanners, price verifier & mobile payment facility in stores.
Next time you shop abroad and feel good about not having to queue up at the cash counter because of the technology at work there, think India.
UK-headquartered Tesco, which has been exploring opportunities to open retail outlets in India once the FDI regime in the multi-brand space opens up, is developing innovative information technology (IT) solutions at its Bangalore lab to cater to the UK and other European markets.
Sandeep Dhar, CEO at Tesco Hindustan Service Centre (HSC), told Business Standard that the latest software and solutions the India centre has developed for the stores abroad, include electronic price tags on shelves and handheld price scanners for shoppers. A couple of Tesco stores in the UK have recently done test runs of these solutions, Dhar said.
The electronic shelf labels are meant to replace the traditional paper tags. Whenever the price of an item changes, the tag can be easily revised electronically, thereby saving cost and time. Similarly, with handheld scanners a shopper can scan the item himself as he puts it in the basket, rather than all the purchases being scanned at the billing counter. So, when it is time to pay the bill, the shopper does not have to queue up, said Dhar. Tesco HSC, owned and run by Tesco, was founded in May 2004 and employs around 5,000 people.
German retail chain Metro, too, offers scan-as-you-buy facility, an industry expert pointed out.
Analysts said although IT solutions are still low down in the priority list of Indian retailers, things are set to change with the sector maturing rapidily.
The low tech focus in the Indian retail space is despite software firms like Tata Consultancy Services (TCS) and Cognizant supporting many global retail chains in their IT initiatives.
US IT company, Cognizant, which has over 75 per cent of its employees based out of India, recently helped global retailers successfully manage the peak shopping season by using its business process as a service (BPaaS) platform, Intellipeak, a company spokesperson said.
The BPaaS platform combines software, services, and industry-specific best practices to provide an end-to-end business solution. Using Intellipeak, Cognizant supported more than a dozen retailers across three continents in the 2010 peak season, representing more than 30,000 stores and billions of dollars in online transactions.
While many Indian retail chains this newspaper contacted chose not to reply to queries on the IT solutions being developed and what was used at their stores, a Bharti Retail spokesperson said Easyday stores have recently implemented two IT solutions.
According to foreign investment rules of the country, Walmart runs wholesale cash and carry stores in many parts of India, while Bharti owns multi-brand retail outlets. Hundred per cent FDI is allowed in wholesale/cash and carry, but foreign investment is not permitted in frontend multi-brand retailing.
Bharti Retail chief operating officer Andrew Levermore said the mobile payment facility launched recently was geared towards facilitating payments at the stores and adding to the overall shopping convenience of the customers. Bharti stores also offered price verifier enabling customers at EasyDay stores to receive price information at strategic locations.
According to Purnendu Kumar, vice-president, retail and consumer products, Technopak Advisors, a global consulting firm, the organised retail industry in India spends only two to three per cent of the total revenue on IT solutions. But, in another three to four years, as the industry matures, the IT spend will increase manifold, he pointed out. Currently, the organised retail industry size in India is pegged at $21 billion, while the unorganised market is estimated to be worth over $400 billion. Even as the IT spend in percentage terms in many developed countries may be around the same level as in India, the organised market size there is much bigger, thereby making the IT spend significant.
At present, Indian retailers are mostly focused on the basics like procuring and stocking products, and supply chain, according to Purnendu Kumar. While IT investment is happening in backend, nothing much is being done when it comes to direct interface with customers, he said.
Even though loyalty programmes are being offered by several retailers in India, they hardly offer automatically triggered promotions and discounts, unlike in the West and many developed Asian markets, Kumar explained.
