Retail sector plans huge IT investments

As the retail sector in India charts the organised path, there’s one addition it is making in its journey — Information Technology...

As the retail sector in India charts the organised path, there’s one addition it is making in its journey — Information Technology (IT) to match its global counterparts. The retail sector, which accounted for 1.2 per cent of the total domestic IT market in India in 2006, is set to grow at a CAGR of 32.5 per cent for the period 2006-11, predicted IDC India country manager Kapil Dev Singh. He was sharing the results of an yet unpublished survey exclusively with The Indian Express.

For Reliance Retail Limited, which has announced Rs 25,000 crore investment in retail, the spending on IT is equally ambitious. “25 per cent of the total retail investment goes into IT, ranging from building networks, creating applications, hardware, software and security systems,” said Reliance Retail (Lifestyle) president and chief executive Bijou Kurien. It has invested in front-end solutions, Enterprise Resource Planning (ERP) and various mid-level applications, in addition to applications like marketing, promotions and staff management, he added.

“With a larger number of stores across geographies and with the width and depth of merchandise getting larger, it would be impossible to manage without an integrated IT solutions,” explained Heritage Foods India Ltd operations and marketing head Santhosh Unni. In the wake of the country’s retail revolution, the organised sector is spending consciously on IT solutions to bring down costs, said TNS India vice-president (technology) Parijat Chakraborty. He added that domestic IT spending is bigger in four major areas — supply chain management (SCM), inventory management (IM) and cost solutions (CS), POS and back-end integration. A major driver of the growth of IT in retail will be the spending on hardware, which contributed 41 per cent to the total IT market in the segment in 2006, and is expected to grow at a CAGR of 32.8 per cent, added Singh.

It’s not only the retail sector that has adopted IT applications across the country. Domestic IT solution providers, too, have now embraced retail to come up with customised retail solutions. “Most IT companies are opening new verticals in retail and healthcare. The trend is changing from generic solutions to different modules for specific sectors like garments, footwear, apparel and large format multi-brand outlets,” said Chakraborty.