Social networking for the retail enterprise

Social networking is the latest buzzword in the retail industry, here in MphasiS we have developed a platform which can help retailers to

Collaborate with Global & Remote workforce across the merchandising, supply chain, store operations, and head office workforce.

Break organizational Silos – Store Operations, Supply Chain, Merchandising organizations have their unique communication requirements.

Combat ineffective Knowledge Management – The new age retailer needs to continually keep on introducing new concepts, training to the personnel for enhancing customer satisfaction. New product launches, new promotions with quick turnaround. Addressing immediate feedback to the customers with multiple communication channels. Publish standards, guidelines, best practices, training, templates, research, news, and community features like blogs and forums.

Help changing organizational size, M&A – Consolidation of the organization with M&A with different systems and cultures.

Respond to increased velocity and acceleration of business - Retailers need  ability to respond to compete in near real time at promotions, products, services offered by competitors.

Grapple with increased turnover and attrition - Attrition at the stores and supply chain processes coupled with seasonal demands has always been a challenge for retailers. This platform can be used to reduce the cost of communication.

Connect with generational employees - The “net” generation has arrived and retailers with varied demographics are no longer immune to the way the new generation has adapted to the mobile devices and communication ways. The MphasiS social platform helps the retailer to adapt to this new communication paradigm. 

This platform is based on open source technologies and brings the best of the Web 2.0 world to the enterprise. Currently working with a leading US retailer on implementing this at the enterprise level. This space is new and evolving so expect some unique challenges going forward. Lets see how it goes :)  

Did you really save money Mr CFO ??

The recent downturn had got all the CFO's on the IT managers and CIO's after their neck on opex/capex reduction. As all retailers were struggling in India it was really a tough time for the IT managers and CIO's to act as per expectations of the CFO who were literally hounding them on cost reduction. Now the times are improving but will the decisions and some of the retailers are re-starting their growth plans. Will decisions taken last year come back and haunt the CFO's? Did they really save money by reckless cost cutting?


I remember the decision which I had to take due to behalf of a client CFO to procure cheap POS machines against my recommendation for just a paltry cost difference between the worlds best product (which I negotiated for a very decent discount and SLA) against a lower grade product. The POS machines have now been delivered at the flagship store and have started to show their true colors. They are failing and the vendor is unable to keep up his SLA. Same applies for the I.T Level 1 support staff who were treated with shabby at a client's place. 80% just went away in a span of a month as conditions have suddenly improved and they got good increments taking the support SLA's down drain. Quality of work done with minimum cost and quality have now started affecting the operations as we have had a couple of cases were cheap faulty electrical wiring has damaged POS/Scales due to short circuits in the store! 


How has the cost reduction affected the business? Will these decisions be a hindrance to future growth? Will these hasty decisions really add to the total cost of ownership of IT going forward?


Did Mr CFO really save money for the organizations by recklessly cutting costs or did they just achieve their cost cutting KRA's  for last year ? Lets see how it affects growth performance this year. 

CIO's challenge post 2009...

I recently had the opportunity to be with some Indian CEO/CIO's where there was a panel discussion on the role of the CIO in the post recession period. Even though India did not really go thru a slowdown it was nevertheless a time for all retailers to introspect and take a breather and work on improving efficiencies. This apparently seemed to have worked as the Indian retailers are posting better results.


In one way the CEO/CIO's in India on our panel arrived at a consensus that the slowdown  gave them time to stop for a while and get the dirt out of their systems. Real-estate prices in India are the highest, the slowdown gave the chance to the retailers to work out models which would help them come to realistic levels. 

Going forward all the CEO/CIO's in our panel were unanimous that IT was going to play a very vital part in their future growth of retail business in India and they would like to see the following coming from technology:

1. Flexibility  - business models in India are still evolving, so systems which allow the business to launch newer models, formats is going be the most important. CEO wants this flexibility from systems.

2. Control - With flexibility comes the need to keep control. Systems for retail in India should be flexible but at the same time need enhanced control. Since the business is evolving, new models getting tried out the managers need to be empowered. This comes at a price, internal control needs to be tight and CEO's want real-time monitoring to keep control.

3. Business Intelligence and Analytics - With India's demographics being so disparate, CEO's need real-time customized area wide business intelligence. Analytics to watch localized trends, ensure localized plans is vital.We had a CIO in our panel who gave us some interesting statistics on sales from Tier 2 and Tier 3 cities in India. He was giving examples where sales of lifestyle products from their stores in Tier 3 cities sometimes actually exceed Tier 1 cities in festival times by a wide margin. This is because the Tier 3 cities have pent up purchasing power which comes out during festival periods and since there are few organized retailers in Tier 3  this purchasing power is used to buy. Other trend which he mentioned is that today lot of their consumers are exposed to international trends so they are demanding their design team to create international grade products at local pricing and the expectation from the business is that IT would play a important part in innovation in product development.

4.  One more interesting perspective was put forward by a CIO of a leading retail finance company which specializes in rural finance product retail. The technology stack available in India currently does not cater to companies which want to do bottom of pyramid marketing and sales in India. Power supply challenges, cost per transaction, reliability, wide diverse demographics are some of the unique challenges which face retailers who want to get deep into India's rural geography. CIO's are expecting innovation in this area from IT product vendors which would enable them to leverage IT to tap this market. 
5. Another areas which the CEO/CIO's touched was the emergence of social networking to aid business. This is a fairly new area which the CEO/CIO's in India and even the world are watching keenly. How to tap the Facebook, Orkut, Linkedin phenomenon is currently being discussed. Once CIO of India's largest consumer goods company commented that they have already started investing in a platform to support social networks and they are launching their first business application ( I am lucky to be part of this project using IBM technologies). Going forward they would gauge the impact of this trend and continue to invest and try to innovate in using social networks for their product development feedback, product penetration, CRM area. 


So looks like 2010 is going to be a busy year for all CIO's in India... Lets see how it goes..

To be or not to be ... multi channel initiatives in India

In the last couple of months I am seeing a lot of large to mid sized bricks and mortar retailers in India wanting to go in for a integrated multi channel retail strategy. The observation they face is that most of the traditional retailers may not understand the the extent of business process changes they would need to do to their existing business process to adapt to multi channel. The IT departments want to put in a multi-channel technology platform in place but do not have the necessary investment budgets for them to truly go in for enterprise platforms like Sterling Commerce, IBM Commerce, Microsoft Commerce etc.. They seem to be in a dilemma on how to proceed next. I have been speaking to multiple retailers in India who are in this predicament.

So how do these guys go forward…

My suggestion is, first they need to get their business process planning in place. Points like, how will they plan and create a fulfillment strategy for demand from web, tele-sales, mobile sales in a diverse country like India which has complex logistical challenges. Challenges like multiple tax structures and transportation issues (hope some are eased once GST is introduced). Pricing strategy, promotion, assortment, branding strategy etc need to be evolved. Only if they have some idea on this then they should proceed to the IT side. I see most of the retailers not doing their basic homework before looking in for the IT solution and they seem to be jumping directly into IT solutions. So my suggestion is first do your basic homework…

From the technology side, even though mature platforms like IBM Commerce, Sterling, MS Commerce exist, I do not foresee the retailers putting in budgets immediately. Except a few retailers like telecom companies or CPG/Direct sales majors or B2B CPG MNC’s, Indian retailers do not have so much budget to spend. The only other way is for the technology vendors to come up with some kind of SaaS platform for these retailers. The other option which I see strongly coming up is usage of open source. I am working with multiple retailers in India to suggest them open source platforms like Jhoomla, OFBIZ etc to develop their first generation multi channel technology platform. These platforms have now matured and can be used for supporting enterprise e-commerce and MCR initiatives.

The other area which I suggest which some retailers are realizing is the importance which they need to give to customer experience online. The role of usability design and branding experts and the value addition which they bring is slowly seeping in the IT departments. In the last couple of months I am seeing a very good awareness created for this area.

Lets see what the new decade brings to multi channel retail … one thing is sure no retailer can afford to ignore this area...