The big fat middle class, which has a substantial disposal income in hand, constitutes the largest shoppers? segment in India. Managing its consumer behaviour is becoming a task for Indian retail chains?big or small. Apart from the large format or niche retailers, the economic recovery has even driven the mid sized and small retailers to accelerate IT adoption in their outlets. From Pantaloons, Welspun, Megamart, Lifestyle, Titan, Reliance Fresh to Shoppers Stop and even smaller players, all want to keep their target customers intact. They are doing this by aggressively adopting IT applications to streamline their entire gamut of operations?from accounting and human resource management to core functions like buying, merchandising, supply chain management, store management, marketing and customer relationship management.

It is pertinent to note that though last year?s economic meltdown impacted the IT budgets of most retailers, the second half of 2010 is expected to boost IT investment. Out of the estimated $441 billion Indian retail sector, organised retail contributes around 6% of the market. Most of the IT investment is done by organised retail which comprises niche and specialty retail outlets relating to lifestyle or apparel. It excludes outlets like grocery and vegetables as they don?t require extensive IT applications due to the nature of their business. According to recent studies, the Indian retail sector is expected to invest around $503.2 million in retail technology service solutions in the current financial year.

Using IT applications and packaged software solutions definitely makes work manageable for retail chains. The latest data by Shoppers Stop, which has 30 stores in 13 cities, reports that using IT software solutions has reduced its time taken to refresh data from data warehouse from half a day to an hour. It also speeds up collation and cleansing of data for better sales decisions. Moreover, the sales reports by the retail house are now generated in as little as few minutes as compared to hours previously. ?In a competitive landscape and growing segment such as retail, it is prudent to drive business enablement with technology to improve customer satisfaction. IT helps optimise business and reduce operational IT budgets,? says Arun Gupta, customer care associate and chief technology officer, Shoppers Stop.

Analysts inform that as Indian and international retail chains continue to plan for growth, they face a pressing challenge for a single, enterprise-wide platform to manage the widely distributed business operations. The need of the hour is to sustain a profitable business growth and respond to rapid market changes through market insight, innovation and differentiation and appropriate business controls.

Following the footsteps of MNCs and big retail chains, even mid sized players have realised the benefits of customer relationship management (CRM), supply chain management (SCM) and business intelligence (BI) in their day-to-day activities. Abdulla Fatiya, head IT, Nilkamal @ Home, a manufacturer of plastic crates and molded furniture with pan-India operations explains, ?Using IT solutions has reduced our manpower requirement for the activity by 40% and supply chain turnaround time by 2 days.? Since April 2009, the company has implemented quite a few projects including warehouse automation, HRIS, BIO Matrix attendance systems, etc. It is also in the process of implementing a BI solution for its retail division. The spending on IT by this mid sized retail chain has increased 15% to 20% year-on-year since then.

Atul Bhandari, vice-president (value engineering and industries), SAP India captures the scenario: ?In the organised retail business, technology is needed not only in accounting and human resource management, but also in core functions like buying, merchandising, supply chain management, store management, marketing and customer relationship management. Thus IT applications are witnessing adoption from the very beginning till the ?last mile? of the operation for most retail functions.?

SAP?s clientele includes Welspun India, Pantaloons Retail, Reliance Retail, D-Mart, Nilkamal @ Home, DLF Retail, Khadim Jewellers, Fresh & Honest Caf?, Super Religare Laboratories and Religare Wellness and Dimexon Diamonds.

Naveen Mishra, principal research analyst at Gartner says, ?Mobile technology and radio frequency identification (RFID) at the front end are the new entrances in IT adoption by the retail sector. But, right now the focus is more on supply chain management and integrating IT solutions for the back end.?

Even Rakhee Nagpal, founder and director at Dynamics Vertical Solutions, a retail ERP solution provider notes that shoplifting can be avoided by IT implementation in the retail stores. The company counts Liliput, Pizza Hut, Barbeque Nation and the RPG Group as its customers. Nagpal believes that hospitality and real estate are the two emerging segments in retail that are adopting IT aggressively.

Another interesting trend is the use of research and analytics in the retail sector. Fatiya from Nilkamal says that by next month, the company intends to deploy an analytics platform as well. The retailer has started looking at analytics seriously to understand consumer behaviour and past trends.

It is evident that major IT investments are still going to be made by the leading retail majors. However, Mishra from Gartner believes that in the next two years, even mid sized players in tier 2 and tier 3 cities will invest in SCM software. Right now, they invest only in basic IT automation.?In the last few months, we have seen interest from mid sized and small retailers in Haryana, Punjab, etc who want to adopt IT in their outlets. Some of these retailers possess only one product line as well,?he adds.

In short, there is still room for Indian retailers to invest in IT applications as we lag behind in the global race.