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| Interview with Ms Rakhee Nagpal, MD, Dynamic Vertical Solutions | ||
"Retailers need to manage the entire shopping experience"
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Retailers in the so-called unorganized sector actually enjoy a very high demand, at the local community level. They also have some inherent strengths, like tradition and the understanding of customer requirements that goes with it. As an example, in a city such as Ahmedabad, a local vegetable vendor will know what vegetables the elderly lady would need. He probably knows what she buys regularly, and seasonally. On the other hand, a larger store may not have the necessary customer relationship management systems in place, and also cannot manage the interaction at the same level as the local player. So some of the key challenges facing the organized retailers are: Customer retention, managing the experience over the entire store, not just specific merchandise, and offering all the brands customers may desire. With the current FDI restrictions, it becomes difficult for retailers to offer all the international brands, but this is necessary for the young and brand-conscious customer, because the availability of brands plays a huge importance on these changing demographics. I think the revolution in retail is being ushered in by the changing demographics, by the increased Internet penetration, and number of people who have traveled abroad, and had an exposure to an international shopping experience. In 1998 the people in the age group between 21 and 34 accounted for 25% of the buying population, today it is 27%, amounting to 312 million people. Shopping is not just buying a bunch of products somewhere, it is now an entire experience. On a weekend, a family will go out for lunch, watch a movie, walk the mall and visit the multiplex, so it is a whole shopping and entertainment experience. In this highly dynamic market, retaining customers becomes very, very important for retailers. I do believe that it is technology that will give retailers the competitive edge and the ability to manage promotions and differentiations through service or products. Q: A retail set up needs to have a lot of inbuilt flexibility to respond to market moods. Does this throw up a lot of operational issues? A: For a retailer, flexibility is vital, absolutely. In an effort to stay competitive in a highly competitive domestic market, even keeping the international competition aside, the retail operation needs to be very agile. The challenge is to have the ability and the systems that allow one to take timely decisions, related to merchandising and promotions. This is only possible by the use of technology that enables seamless integration of the various aspects of operations, and complete transparency, for example, to see the outcome of specific promotions. The retailer needs to be able to make quick decision and also make changes. As an example, let us look at a situation that happened just last month, on a particular day in August, there were very heavy rains in Mumbai. The weather report was incorrect, and rains had been expected the next day. For a food and grocery store, this situation creates a challenge in the management of perishable goods such as fruit. The store manager should have the ability to take a decision to sell apples and bananas at half the price on that day, and implement this decision at the touch of a button. Q: Customer expectations from retailers seem to be rising all the time. What are the kinds of conveniences and innovations that will be required in the future? A: More and more buyers will soon be taking advantage of online retailing, it will be the logical way, as they are spending more time on the Internet, and want maximum convenience with minimum hassle. To respond to this, retailers should have fully integrated solutions, that can integrate the different modes of revenue including physical and online. I am also sure that RFID technology will be seen in retail in a big way and will enable a variety of conveniences. Then there will be international innovations, for example, in the UK, the concept of Chip & Pin has been introduced in place of signatures for transactions. Retail solutions will need to be compatible with hand held devices, as we are seeing internationally, where you can have Queue busting - that is, you control your shopping experience with the help of hand held devices such as mobile telephones. Q: What are the kinds of systems that a retail set up needs to be able to meet some of these market needs? A: As I mentioned before, a retail business needs technology that enables quick decision making of a high quality. Let us take another example the billing process. As a customer, it can be very inconvenient, because the current technology is unable to deliver the efficiency required. When I visited a fashion store recently, the billing desk was unable to provide a receipt incorporating 3 different promotions. This shows how ineffective technology solutions can be, to respond to the market realities. Such situations occur when retailers do not understand the need of technology to assist them in their aggressive growth plans. They need to understand that investment in technology is not a sunk cost, but an investment in long term business benefits. Retailers should have access to global best practices, localized for Indian conditions. There is no need to reinvent the wheel, but there is a need for localization, to take care of taxation and other specifics. We also believe that its unfair to clump all kinds of retail stores into the same category. There are at least 5 to 7 different segments, with very specific needs. The needs of a fashion retailer differ drastically from a grocery one, or any other for that matter. Their clientele is different, their inventory is different. Similarly with formats, the needs of a department store differ from that of a mall or a hypermarket. That is where we come in, we define different processes for different lines and retail formats, and tailor technology solutions accordingly. Q: Let us move from retail to hospitality, what does the new age guest expect from a hotel in terms of convenience, and how does a hotel match up to these expectations? A: Well, tourism, hospitality and retail are the booming sectors, and with the Commonwealth Games that are scheduled, the need for a world class guest experience becomes all the more important. I honestly believe that this will happen through efficient operations that offer the greatest convenience, the best quality and most attractive proposition. For example, service requests need to be dealt with quickly. Also, for long term business, the lifelong relationship with the customer needs to be managed. This takes an integrated solution that removes the need for manual effort, and can manage the different interaction points, such as the hotel store, bar, beauty saloon and front desk in one holistic manner. Currently, at many hotels, all these are managed using disparate systems, which increases the chances of manual errors, and also increases costs. The key is to have integrated solutions and increased efficiency, which helps to ensure customer loyalty. For example, let us imagine a chain of hotels, with 2 or 3 properties in the same city. If you stay at one hotel, then decide to move to another property of the same chain and in the same city, when you check in, you expect to get the benefit of the loyalty points that you just earned. In retail and hospitality, the future will belong to the most innovative players who can manage operations smoothly and effectively. Technology will be the vital piece towards making this happen. About Rakhee Nagpal: Rakhee is the Founder and Managing Director of Dynamic Vertical Solutions (DVS). Previously, Rakhee was DirectorMarketing with Navision India and has also worked with Merrill Lynch, UK and Barclays UK. Rakhee holds a bachelor's in Economics and a Master's in Marketing from London Universities and her hobbies include reading and traveling. About Dynamic Vertical Solutions: Dynamic Vertical Solutions (DVS) is a market and technology leader in end-to-end integrated and adaptable business management applications providing comprehensive solutions for organizations of all sizes and all Industry sectors. DVS is the exclusive distribution partner of the LS Retail Suite of solutions for the Indian market. Headquartered at Gurgaon, India, the team at Dynamic Vertical Solutions interacts with various industry and delivers solutions requiring research, analysis, product designing and market innovation. Copyright held by Ad Astra Media |
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Copyright © 2006 Dynamic Vertical Software Private Limited. - All rights reserved |
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