With several disruptive technology related pilot projects including AI in the pipeline, IT heads reveal why 2017 is the year for IoT in retail.
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One of the oldest sectors in the history, retail has seen a lot of action since the advent of ecommerce. Today both brick and mortar retail companies and ecommerce retailers are engaged in an intense battle for marketshare.
Beginning with Flipkart in 2007, ecommerce took a big swing at retail in India and hit its mark. There are over 100 ecommerce companies constantly changing how we shop. Additionally, with several recent changes in shopping behaviour, retail has now become one of the most disrupted sector.
Customers are now digitally armed with countless websites and apps, and the time to move away from a mere ‘stock and sell’ model is long gone. Retail chains are ramping up their game with apps, digital payments, chat bots and even offline augmented reality booths to attract customers in this ‘digital-first’ century.
The Indian retail industry accounts for more than 10 percent of the GDP and around 8 percent of the employment in the country. According to a report by India Brand Equity Foundation (IBEF), the sector is predicted to reach USD 1 trillion by the year 2010, and is expected to grow at a yearly rate of 12 percent.
To understand what path retail IT heads will take in 2017, we spoke to Ranjit Satyanath, Head – IT of Infiniti Retail, Debojit Maitra, IT Head (Infrastructure) of Aditya Birla Retail, Anil Shankar, Customer Care Associate, VP – Solutions & Technology of Shopper’s Stop, Balaiah L Bekkam, Head – IT and SAP.
Which technologies do you think will prove to be the most disruptive for retail in 2017?
Satyanath: In 2017, mobile payments will become a reality, big data will get bigger, and IoT will drive a lot of customer experience and supply chain optimization stories. Additionally, cognitive computing will make its debut in many retailers’ technology landscape.
Shankar: Augmented Reality (AR), Sensors/IOT, Cognitive, Wearables and contact less payment are the technologies which are likely to influence the retail business the most in 2017.
Bekkam: In 2017, the retail industry will most likely be disrupted by contact less payments, fingerprint authentication, IoT and cognitive computing.
How has technology shaped your business strategy for 2017?
Satyanath: We would like to influence our customers’ preference digitally by guiding them to our stores where we would win them over by our obsessive focus on service and product range. We’ll also use technology to ensure that customers who come to our stores with an intent to buy will seldom go back empty handed.
Maitra: Data from IoT will be coupled with increasingly powerful artificial intelligence capabilities. In 2017, teams will search through more than 19 new wireless connectivity choices and protocols to support the company’s diverse set of IoT devices.
Shankar: Retail has always been a very dynamic business and effective use of technology would be the greatest game-changer of all in retail now than ever before. With the technology savvy consumer at the centre of the newer business model, most business strategies are reshaping to address the ever increasing expectations across different channels and customer touch points. Digital and mobile technologies are empowering the retail business to take their offerings closer to the homes of customers.
How are you leveraging newer technologies like robotics, AI and cognitive?
Satyanath: At Croma Retail, we are in the process of early pilots in AI and Cognitive.
Shankar: There are different use cases constantly identified for creating POC and run pilot deployment in the process of making such technology mainstream. We are trying out some of these technologies to make overall shopping experience more personalised.
Bekkam: At Reliance Retail, we are trying to evaluate how to leverage these technologies to our best use.
The 2016 market witnessed demonetization, the GST bill and Make in India. How do you think the retail industry should tackle these issues?
Satyanath: With demonetization, the cost of handling cash will come down but will get compensated by merchant discount rate (MDR). Lesser cash will also speed up the checkout lines. With GST, we are expecting to increase retailers’ margins by lowering costs but it will add processes for the finance teams.
Maitra: Demonetization has increased the retail sales across India and we have focused more on Plutus Payment, Loyalty Payment and Store Card. For the Indian retail sector, the introduction of GST will act as a benefit at different stages of the value chain. To begin with, the procurement of raw materials, movement of goods would become less cumbersome, which opens gates for more suppliers /vendors to merge. Following this, a wider base of distributors would be available as state boundary paperwork will not be a hurdle, resulting in better access and low transportation costs. A favorable environment for a supply chain would reduce in-transit inventory, further reducing the working capital requirement. Adding to this, simplified taxes and availability of input tax credits can help fetch better margins. GST will also avoid the red tape and documentation on collection and submission of various forms.
With Make in India, the price tag of imported items would decrease and profit on volume would increase if sold items manufactured in India especially for MNC products and the retail sector would benefit.
Shankar: The business models would have to be prepared to handle such disruptions. While some of them may impact businesses adversely, they could also offer an opportunity for facilitating transformation required for the next phase of business growth. The organizations would have to be better prepared for change management, to remain relevant for their customers in a continuously dynamic environment. Retailers would have to look for innovations in business model for a sustained competitive advantage.
What is your technology strategy for 2017?
Satyanath: We have some interesting projects around inventory optimisation and improving customer experience lined up. We are focusing a lot on improving our supply chain efficiency. We are cognizant of the increase in malicious threats and are working to beef up data security.
Maitra: We are emphasizing on security, introduction of IoT, combating the challenges of GST in financial part of ERP, and working towards a platform enhancement for ecommerce.
Shankar: We are currently focusing on a few key areas like transformation of the supply chain, creating best cross-channel fulfilment capability, and drive better customer engagement through personalization for both in-store and online. These are to support the business to be become omni-channel.
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