In what can be termed as maturing in IT software implementation, domestic retailers are increasingly opting for packaged IT solutions, as against the earlier practice of developing in-house software.
?We are seeing a shift in retailers operating across all scales, even retailers with as low as five stores to more than 500?, said Naresh Ahuja, managing director ETP Retail Software, adding that everyone now realises that scale is the name of the game and that needs advanced IT support. ETP?s client portfolio has clients like Benetton, Hot Spot, and ITC?s Wills Lifestyle.
However, an interesting trend is that the practice is most prominent in the lifestyle and apparel segment, while grocery and vegetable retailers are still lagging behind despite being the most popular retail segment. This is because food and grocery requires a sound infrastructure; including a proper cold chain before IT solutions can be implemented, which is still a daunting challenge in India.
In India global giants dominate the market scene, with SAP and Oracle sharing a massive chunk of the market, followed by other IT companies like Polaris and ETP. The market is growing at an attractive rate of 40% annually and is expected to continue like this for a couple of years.
Most retailers who are in the growth range of 15% or above need to get sound IT systems in place so that they can scale. They need standardised processes as well as flexibility to support their businesses. The growth rate of retail in China has been about 3-5% higher than in India in the past 3-5 years.
The most popular solutions are the POS (point of sale) and the supply chain management (SCM). Though POS has been there for quite some time now, SCM is a rapidly growing software not only in India but also in the entire Asia-Pacific, where it recorded a growth of 12% annually. Since the retail business is all about reducing costs efficiently, coupled with increasing the volumes, a software like SCM leverages a retailer in achieving the twin objectives of fast scaling operations and cutting costs in the supply chain to maintain margins.