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IT + cheap labour = Indian solution

February 04, 2005 09:32 IST

What do you do when a store has run out of what you are looking for? You settle for an alternative or the store just loses your custom. American retailers lose 3.1 per cent of their sales through such 'stock out', the US commerce department has calculated.

An obvious solution to this is on-line retailing -- you order on the net. A via media increasingly adopted in the west IT kiosks in stores from where you can order on-line what you may not find in the store.

In India where either of the developed country options are barely used, a third one has been traditionally deployed by the typical retailer. He asks you to wait while his errand boy gets your item from a nearby competitor.

Enter Witco which bills itself as the largest Indian retail chain in travel ware or plain old luggage.

Its 16 stores in Chennai, Bangalore and Coimbatore are equipped with a networked online billing and inventory viewing solution which allows the chain to locate what a customer is looking for in any of its stores in a city and invoice it.

This combination of IT and low Indian logistical costs enables stores in the chain to minimise loss of business through 'stock out'.

The solution Retail Pro, owned by a US firm called Island Pacific, has been installed by Bangalore based Integrated Retail Management Consulting which serves retailers.

Bikash Kumar, managing director of IRMC says Witco's is the "first such real time solution deployed in India in brick and mortar (as opposed to on-line) retail which allows a chain visibility of stocks across stores through an IT solution and enables it to minimise sales loss owing to stock out."

The solution, a part of the retail supply chain management genre, comes in two layers.

First is the point of sale solution which includes billing, customer relationship management, cash till balancing, handling of promotions (the screen tells the billing clerk that a stroller will get the buyer a free tiffin box) and staff scheduling (have more staff on weekends).

The next layer allows inventory viewing across stores (yes, we will get you're the 20 inch suitcase from our Cunningham Road store, the Indiranagar buyer is told).

Kumar explains that for this to happen you need the solution in the first place, cheap connectivity and the customer's (chain owner) willingness to make the IT investment.

The current installation cost is around Rs 1 lakh per store and Rs 2,000 per month per store for a broadband connection. The good news is that boradband costs are going down and naturally, the cost per store will go down as the number of stores goes up.

"Even a 1 percentage point in sales loss avoided will pay for the investment," says Kumar.

IRMC, constituted as a private limited company, has been offering consultancy in the retail space for eight years now.

It currently has a topline of $ 1million and has been profitable for all of its eight years of existence. It operates in India, the Philippines, Thailand and the UAE, the last two being emerging markets for it.

The 28 professionals who man the business are specialists in various industry verticals with focus on retail and offer services in strategy, operations (defining standards and processes), deployment of technology (optimisation) and training.

Among its customers (in the broad retailing space) are Ebony Retail, Yamini (home improvement), Liberty, THS and Wills Lifestyle.

Subir Roy in New Delhi
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