Sunday, December 20, 2009

What an idea!

Sometime ago while I was browsing in a supermarket I noticed a person checking out products on the shelves and then fiddling with his mobile phone with a stylus. He would again check out something on the shelf and shift his attention back to his mobile. At first I thought he is one of ‘those’, people who are chronically addicted to their mobiles. Having seen increasing instances of such mobile centric behavior, I have a strong thought that human evolution might lead to ears with Bluetooth like capabilities and fingers which are more like the stylus.

Anyways.

Coming back to the story, I realized that the person was actually noting down something from the shelves. I could think of only two possibilities; one being that he was checking the stocks or he was checking the prices and was from a competing store.

(Please overlook the poor quality of the picture as it was taken with my mobile in indoor lighting)

My curiosity was piqued and I approached him to enquire. He was indeed taking stock and also taking down the requirements for each of the SKUs as he was the distributor’s representative. Being very impressed by this use of technology I requested a picture of his devise, which is what one can see here.

It is indeed heartening to see the slow intrusion of such technology into Indian Retail which has typically chosen man power options in the technology vs. people cost benefit analysis.

This person visits the stores, checks the stocks and captures the requirements, goes back to office and updates everything by plugging his phone to a computer. Technically he need not even go to the office and can do this from anywhere by sending it over a call or as a message.

This is just a representative use of technology in retail which is today affordable and helps increase efficiency and productivity. More importantly, the accuracy increases vastly in a context where data accuracy was guestimated to be anywhere from 60% to 80%.

Of course there are myriad such things which can bring about significant operating changes and shall detail a few in the coming posts.

Lastly one should remember why adopting such technologies is considered difficult in the Indian context. It is simply a matter of cost.

Quite a few number of years ago when a new store was being planned, the debate was about having a hand held, radio frequency based device to manage stock receiving, inventory checking, etc. versus having it done manually. Needless to say the manual way won out because the other option costed some 3 or 4 times that of doing it manually. With technology costs coming down (take the case of Netbooks) Indian Retail might find the time right to explore some interesting technological options in several functional areas. However, the fact of the matter is that a device that appears affordable at USD 1,000, might trigger second thoughts because; at INR 45,000 for a 3,000 sq. ft. store, it is Rs. 15 per sq. ft. and the meter starts ticking if multiple such devices are required to make it effective.

1 comments:

Rajaram Kudli said...

Its really feels good to know about proliferation of technology into consumer-oriented & growing sectors like Retail in India. Being a pro in Data Analytics which is most apt & matured for Retail, I can't overemphasize on availability of clean data with maximum coverage of the market. In fact me & some of my friends wanted to develop exactly this technology so that it would trigger flow of data from rural corners of India to centralized databases. When I did a little survey on both supply & demand side, i got stopped at a couple of basic barriers -
1. The cost of the technology - who'll bear it? Most certainly it'll have to be the suppliers, so,
2. What's the incremental ROI on the technology? - hopeless, since most of the sales happen in urban areas whereas those who need it most are rural-kirana shops - who cares for them anyway, particularly you can't use the intelligence to upsell/crossell to rural folks - and in any case Retail is a growing market, hence a sellers market ...
In summary, we were discouraged by the limited market.

If only there are enough suppliers & retailers who is the value of adapting technology for the entire value-chain ... you could see more competition & innovation in the technology too and hence more affordable options to all ...

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