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In India, one of the major technological developments in recent year, that is impacting retail in a big way, has been the fast-paced transition from physical, paper-based exchange of value to a virtual electronic payment mode. Though the process started off in the early 1990s when automation was first applied to paper based clearing activities, today we find various payment systems functioning – ranging from paper-based systems where the instruments are physically exchanged and settlements worked out manually, to the most sophisticated electronic fund transfer system which is fully secure and settles transactions on a gross real time basis.

“The full potential of retail electronic payment has not yet been explored or exploited in India,” says a recent NCAER-Visa study entitled “Emerging India: Transition to a Cashless Economy”. Electronic payments can change the way we shop, the way we pay our bills, the way we travel, the way we conduct business, the way we bank and the way we live. On a macro socio-economic level, electronic payments can act as a tool of national empowerment, change the way businesses function, stimulate economic growth and bring about social change, the study says.

Both Electronic Clearing System (ECS) and Electronic Funds Transfer (EFT) have grown rapidly over the past six years. ECS volumes have picked up from a base of Rs.67.4 crore (USD 15.67 million) in 1999 to Rs.9,676 crore (USD 2.25 billion) in 2004. EFT too has grown from Rs.0.6 crore to Rs.15,711 crore over the same period.

On the usage of payment cards, the NCAER-Visa study notes that the barely two-decade-old system has grown from 3 million credit cards in 1998 to an estimated 44 million plus credit and debit cards in 2004, giving a CAGR figure of 55 per cent. Debit and credit card transaction volumes also increased from USD 1 billion in 1998 to USD 23 billion in 2004. However, the usage is mostly confined to ATM cash withdrawals (80 per cent) and the transition to bill payment and shopping has just started picking up.

Organised retailing itself is at a nascent stage in India, constituting barely three per cent of the overall retail segment. Most organised players have managed to put the front ends in place, but the relatively complicated back-end supply chain information systems and underlying technologies are yet in the process of being established. Grocery retailers such as Food World and Food Bazaar have started tracking consumer purchases through CRM and co-branded cards, lifestyle retailers are doing so through their “affinity clubs” and “reward clubs”.

The traditional retailers will always continue to exist but organised retailers are working towards revamping their business to obtain strategic advantages at various levels – market, cost, knowledge and customer. With differentiating strategies like value for money, shopping experience, variety, quality, discounts and advanced systems and technology in the back-end, change in the equilibrium with manufacturers, and a thorough understanding of the consumer behaviour, the ground seems all set for the organised sector to come up in a big way.

“The Indian retail sector is witnessing tremendous growth and with the advent of international players such as Wal-Mart and Tesco on the cards, the adoption of technology will be a crucial factor in the success of domestic retail players,” says Jangoo Dalal, senior vice-president- Enterprise, Cisco Systems (India & SAARC), and adds: “Today we have a number of established domestic retail giants such as Shoppers' Stop, Pantaloons, Big Bazaar who have been early adopters of cutting-edge networking technologies and who are in fact driving the growth of the country's organised retail market.”

George Zacharias of Sify sounds very optimistic of domestic retail sector: “The future of Indian retail seems very bright, especially with Government showing intension to open up the market to foreign companies with loads of expertise and resources. Malls are coming up very fast and demand for branded products is building up, which is fuelling tremendous growth in the organised sector. Things are moving in the right direction and I feel organised retailing has the potential to grow at 100 per cent in a few years.”

India's leading retail chains Shoppers' Stop Ltd and Pantaloon Retail (I) Ltd have been among the early adopters of sophisticated technology platforms in their enterprises. Other prominent players like Lifestyle, Westside, Globus, Ebony Retail have also made extensive use of technology in the store operations. We present in some detail the technology adopted by Wills Lifestyle, the exclusive lifestyle retail chain, and catering chain Café Coffee Day.

Predator at Wills Lifestyle

Corporate major ITC's exclusive fashion retail chain Wills Lifestyle has recently implemented the Intentia solution and Predator (Proactive Demand Accelerator) integrated retail solution, which is being used in the manufacturing unit of ITC Lifestyle Retailing Business Division (LRBD) and also its chain of specialty stores spread across 38 locations. The integrated solution will help the company streamline its operations in the areas of retail, manufacturing, finance and accounting management, customer order processing, distribution, and supply chain management. The work was started in July 2003 and became fully operational in end-2004.

According to Prabir Sengupta, vice-president (finance & IT), ITC Wills Lifestyle, the integrated Intentia Fashion solution and Predator solution is highly scaleable and has helped the retailer to effectively manage its back-end by providing stock visibility across the supply chain from 'vendor' to 'shelf,' and to optimise inventory levels for savings on interest costs and improved return on investment (ROI), besides other benefits. “As a result, we have been enjoying improved service levels at retail stores and overall increased efficiencies with our manufacturing and distribution operations," he says.

Before deciding on Intentia's offering, ITC Wills Lifestyle evaluated various solutions to find out the one that would best meet the retail chain's multi-locational requirements. The solution is built on 100 per cent Java technology and provides a future-proof platform with high scalability, independence and interoperability with other extension solutions.

Café Coffee Day Goes Hi Tech

In the Indian catering services segment, Café Coffee Day (CCD) has always been a leader in adopting latest technologies. CCD was the first to launch India's first Internet cyber cafe way back in 1996. Ever since the concept of cyber cafes has become very popular in India. Very recently CCD capitalised on Wi-Fi technology by converting most of its cafes into “hotspots” offering to its customer's access to Internet without the use of any wires or cables. This enables a user to access the net and also enjoy company of friends over coffee and snacks unlike the conventional cyber cafés, which allow Internet access only on a PC from a fixed place.

“Commonly, Wi-Fi is associated with wireless internet access, but we realised that lot more could be extracted from this ocean,” says Shivaprasad, head, Information Systems, CCD. “Our team has come up with a Wi-Fi integrated enterprise solution, which is the first of its kind for the retail industry across the globe. We have launched this system at our café's in Chennai and soon this will be a part of our cafes all over the world,” he adds.

As part of this innovative system, all Team members (stewards) at CCD are provided with a state-of-the-art NURIT 8010 Wi-Fi enabled Palmtop system, which is inbuilt with a Microprocessor, Thermal printer and a smart card reader. This device is used for billing and can accept Credit/ Debit cards. Also, it is wirelessly connected to a central computer system and can communicate with similar devices anywhere in the world in real time. “Therefore, sitting in New York, one may find out with exact precision the “happenings over a cup of coffee” at CCD outlets located in Bangalore, Dubai or even those located in remote locations such as Katra in Jammu and Kashmir,” asserts Shivaprasad.

The system claims to make life of the café staff easier and also enables management to quickly capitalise on changing market situations across the chain so as to be able to serve the customers better. But it also has its challenges. Given the scale of operation, it needs to result into a complete integration of information, and it also remains to be seen how far the segments to be most affected by the technology – the café staff and the customers – like or dislike the process. Monitoring and rectifications in case of bottlenecks happening is yet another problem area that remains to be tested out.

Besides, CCD has also launched an effective Café citizen loyalty program wherein a smart card provided to the customer stores all-important customer-related information such as his/her profile, likes and dislikes, previous visit to any of the CCD outlet, and so on. When this card is swiped on any of these NURIT 8010 devices anywhere in the world, all vital information is displayed on the screen to enable the front-end café staff to serve him to the best of his satisfaction. For every purchase the customer accumulates points on the card and he may use these points and redeem the same on his subsequent purchases. Also, customers may register their complaints/queries at the outlets, which is communicated instantly to the “Customer care” staff who instantly gets going to provide solution to the queries.

Benefits from efficient information capturing notwithstanding, the CCD example shows that a lot has indeed happened over Coffee!