Definition

Information Technology – A Definition:

We use the term information technology or IT to refer to an entire industry. In actuality,

information technology is the use of computers and software to manage information. In
some companies, this is referred to as Management Information Services (or MIS) or simply
as Information Services (or IS). The information technology department of a large company
would be responsible for storing information, protecting information, processing the
information, transmitting the information as necessary, and later retrieving information as
necessary.

2nd slide:-

Kiranas

 Kirana stores are owned and operated on a small scale, usually in a space of 500sq.ft. or
less. These places are easily available within residential localities. However, for a
supermarket to operate, a minimum of 2000 sq. ft. would be required, and usually, so
much space would usually be found in commercial localities.
 Supermarkets have the benefit of economies of scale over kirana stores.
 Kirana stores are operated by the owners themselves and thus provide the benefit of low
operational costs.
 Supermarkets are capable of eliminating the wholesalers from the chain and can provide
benefits of saved margins.
 Kirana stores target a much smaller market than supermarkets and thus, can be more
responsive in terms of their exclusive demands.
 Supermarkets often offer more variety to customers. Moreover, it is likely to receive the
newly launched products earlier than kirana stores.
 Kirana stores are likely to be in the immediate locality and thus have a better
understanding of customer preferences.
 Supermarkets often offer the best bargains, and experts from the company explain the
usage and care of a particular product to its potential buyers.
 Kirana stores are more likely to provide services like free home delivery.
 Supermarkets have big names backing them; moreover they have stronger advertising,
probably on national or state level. At the same time, there have been instances of
kiranas selling at prices higher than the MRP and tampering with the quantity of loose
products.
 Each of us knows our kirana store for a long time, probably from our birth or so. Thus,
the customer-trust ratio is very high. The billing is also very fast when compared to the
supermarket.

A convenience store is a small store or shop that may sell items such as sweets, ice-cream, soft drinks,
lottery tickets, cigarettes and other tobacco products, newspapers and magazines, along with a selection
of processed food and perhaps some groceries. Stores that are part of gas stations may also sell motor
oil, windshield washer fluid, radiator fluid, and maps. Often toiletries and other hygiene products are
stocked, and some of these stores also offer money orders and wire transfer services or liquor products.
They are often located alongside busy roads, in densely-populated urban neighborhoods, at gas/petrol
stations or near railway stations or other transportation hubs. In some countries most convenience
stores have longer shopping hours, some being open 24 hours

Types:-

Various types exist, for example: liquor stores (off-licences–offies), mini-markets (mini-marts) or party
stores. Typically junk food (sweets, ice-cream, soft drinks), lottery tickets, newspapers and magazines
are sold. Unless the outlet is a liquor store, the range of alcohol beverages is likely to be limited (i.e.
beer and wine) or non-existent. Most stores carry cigarettes and other tobacco products. Varying
degrees of food and grocery supplies are usually available, from household products, to prepackaged
foods like sandwiches and frozen burritos. Automobile-related items such as motor oil, maps and car kits
may be sold. Often toiletries and other hygiene products are stocked, as well as feminine hygiene and
contraception. Some of these stores also offer money orders and wire transfer services. Convenience
stores that are near fishing destinations may carry live bait, such as nightcrawlers or crickets.
A shopping mall, shopping centre or shopping precinct is one or more buildings forming a
complex of shops representing merchandisers, with interconnecting walkways enabling visitors
to easily walk from unit to unit, along with a parking area – a modern, indoor version of the
traditional marketplace.

Modern "car-friendly" strip malls developed from the 1920s, and shopping malls corresponded
with the rise of suburban living in many parts of the Western World, especially the United States,
after World War II. From early on, the design tended to be inward-facing, with malls following
theories of how customers could best be enticed in a controlled environment. Similar, the
concept of a mall having one or more "anchor" or "big box" stores was pioneered early, with
individual stores or smaller-scale chain stores intended to benefit from the shoppers attracted by
the big stores.[1]

The sector in India is highly fragment with organization retail contributing to only 20% of total retail
sales

Today in India we see a rise in the purchasing power and growth of middle class which follows the
western lifestyle. Hence condition is conducive for rapid growth of organized retail in India

The emergence of large organized retail chain like shopper stop, lifestyle and website are enticing
consumer towards a retail style of shopping

Retail in India’s large industry after Agriculture with around 20% of the economically active population
engaged in it and generation 10% of our country’s GDP

The opportunity in retail industry will increase since Indian retailers is on the threshold of a major
change

The organization retail sector has recognized that IT can give it an edge over the neighborhood Kirana
store and more fields of opportunities for retail in the country.

Types of retails:-

The retail industry is divided into organised and unorganised sectors. Over 12 million outlets
operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size. Organised
retailing refers to trading activities undertaken by licensed retailers, that is, those who are
registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets
and retail chains, and also the privately owned large retail businesses. Unorganised retailing,
on the other hand, refers to the traditional formats of low-cost retailing, for example, the local
kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand
cart and pavement vendors, etc.[2] In India, a shopkeeper of such kind of shops is usually
known as a dukandar.
Most Indian shopping takes place in open markets and millions of independent grocery shops
called kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008.
[3]
Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations
such as "signboard licences" and "anti-hoarding measures" may have to be complied before a
store can open doors. There are taxes for moving goods to states, from states, and even within
states.[3]

The Indian Retail Market

Indian market has high complexities in terms of a wide geographic spread and distinct consumer
preferences varying by each region necessitating a need for localization even within the
geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail
space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6
percent is highest in the world.[9] 1.8 million households in India have an annual income of over
45 lakh (US$101,250)[10].

Delving further into consumer buying habits, purchase decisions can be separated into two
categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing
machines, dishwashers, microwave ovens and DVD players fall in the status category.
Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods,
high-end digital cameras, camcorders, and gaming consoles. Consumers in the status category
buy because they need to maintain a position in their social group. Indulgence-oriented buying
happens with those who want to enjoy life better with products that meet their requirements.
When it comes to the festival shopping season, it is primarily the status-oriented segment that
contributes largely to the retailer’s cash register.[11]

While India presents a large market opportunity given the number and increasing purchasing power of
consumers, there are significant challenges as well given that over 90% of trade is conducted through
independent local stores. Challenges include: Geographically dispersed population, small ticket sizes,
complex distribution network, little use of IT systems, limitations of mass media and existence of
counterfeit goods

RFID:-

Consumer identification using RFID:- this involves identifying customer by issuing them smart cards
embedded with smart chips. This cards would be RFID enabled and would give information regarding
the customer like preferences, shopping behavior etc

The RFID ecosystem has come of age. Solutions providers have

honed application expertise while software vendors now provide
fieldproven,
retail-specific applications. Encouraged by the development of
industry standards, major technology companies such as Microsoft,
Intel, Oracle and IBM have made significant investments, which puts
standard, interoperable RFID within the grasp of many more users.
Tags now come in a wide variety of shapes and sizes, enabling tagging
of any product, size or application — at very low cost and high return
on investment.
Significant performance improvement in RFID hardware has led to a
leap in capability. Drastically improved read rates have made previously
untouchable applications effective and economically attractive to users.
There has been a flowering of new applications based on the higher utility
of Gen 2 RFID.
RFID is ready to provide value to retailers and their suppliers today.
Gen 2 RFID provides many opportunities to reduce cost, raise revenue and
boost customer satisfaction in the retail sector. Access to more accurate
and frequent inventory data for both retailers and vendors improves
product availability and reduces inventory costs. Brand authentication
technology enables an elegant and highly-effective method for ensuring
that a high-value product is the real thing and not a cheap knock-off –
protecting both brand and customer satisfaction. Promotional display
deployment tracking ensures high-impact marketing and high ROI on
marketing dollars. Asset tracking applications ensure efficient capital
usage and accurate billing for pooled assets like pallets. In the end, RFID is
leading to higher revenue and profits for retailer and vendor alike.
The following retail applications can provide ROI using Gen 2 RFID today:
› Promotional Tracking
› In-Store Inventory Management -- Items
› In-Store Inventory Management -- Pallets
› Brand Authentication
› Inventory Visibility in the Supply Chain
› Asset Tracking

What is RFID Technology? Description

RFID is a method to identify objects, products, animals or people using radio waves and
microchip tags. This wireless technique relies on storing and remotely retrieving data using
devices called RFID tags or transponders. An RFID tag is an object that can be applied to or
incorporated into any object for the purpose of identification using radio waves. Some tags can
be read from several meters away.

Most RFID tags contain at least two parts. The first is an integrated circuit for storing and
processing information, modulating and demodulating a (RF) signal, and other specialized
functions. The second is the antenna to receive and transmit the signal. Chipless RFID is a
technology allowing for discrete identification of tags without an integrated circuit, printing tags
directly onto objects.
 
Usage of RFID Technology. Applications

 Personnel identification, id-cards, passports.

 Patient identification, safety and medication.
 Livestock and animal identification and tracking.
 Cargo and container identification and security.
 Tracking of high-value assets with real-time location systems.
 Visibility of supply chain objects through product tracking.
 Transportation payments.
 Money cards.
 Electronic toll collection.
 Wireless commerce.
 Various administration usages.

Steps in applying RFID Technology. Process

1. Assess your numbering options.

2. Assess management of your RFID readers and devices.
3. Assess management of your data.
4. Assess integration of your business applications.
5. Assess integration with your trading partners.
6. Assess management of your processes.
7. Assess your scaling capabilities and management of architecture.

RFID versus Barcode. Strengths of RFID Technology. Benefits

There are a number of advantages of RFID over the barcode. The tag does not have to be
physically scanned or read in any way, so merely being within proximity of a detection unit
allows the data to be read. No more creased barcodes. Furthermore, unlike barcodes, RFID tags
can be read through desktops and book covers (no line of sight is required). RFID tags can be
read in any orientation to the reader/antenna. RFID tags can be read while moving (i.e. while
being deposited through a return chute). RFID tags can be read several at a time.

Limitations of RFID Technology. Disadvantages

 Cost. RFID tags are more expensive than barcodes.

 No global standard. The frequencies used for RFID in the USA are currently incompatible with
those of Europe or Japan.
 Security and privacy concerns. The illicit tracking of RFID tags poses a risk to both personal
location privacy and corporate or military security.
 Cancer risk. Certain veterinary and toxicology studies indicate that RFID chips may induce
malignant tumors.
Have you been to a retail store where the individual at the checkout uses a device to scan the
stuff you have just brought into the store computer? Well, that is a barcode scanner and the store
clerk has just scanned a bar code affixed to the product you have bought to prepare your retail
invoice.

Barcodes are much in use in the retail as well POS industry all around the world for
identification of products and product tracking as well. In more advanced scenarios, they are
used in product tracking and inventory management at larger warehouses and industrial
organizations.

There are a number of barcode scanners available in the market, but the right kind of scanner that
you will need to buy is the one that suits your business more effectively. The right type of
barcode scanners improve your efficiency at work and make your business into a profitable
venture. This is because they save considerable time in processing data. Moreover, they push up
your business efficiency considerably.

Depending upon the requirements of your company, one of the many types of barcode scanners
available on the market will definitely suit your needs. Briefly explore the market and even do a
casual search on the internet to find out what is best suited for your needs. They actually depend
upon the kind of application you need.

Therefore, for retail requirements, you will discover that a handheld or wireless scanner is good
enough for your needs. Some retail units also use a pen or a wand type of scanner for their
scanning requirements. This is good where the volume of products required to be scanned are
lesser, but where there are a large number of products that require scanning, your business may
as well as require a countertop model which is of a semi-automatic type. A typical scenario for
this scanner is a store checkout catering to a large volume of customers.

However, if your scanning requirements are for industrial use, then a different type of barcode
scanner must be used. This scanner can be of a fixed mount type. This scanner typically bounces
a laser beam off the bar code at a larger distance. The device is fixed while the product or object
that needs to be scanned is typically moving. In an industrial scenario like this, the product is
usually on an assembly line, and the barcode is generally larger in size that can be read even at a
distance.

However, retail barcodes are generally small. Moreover, they are usually printed on thermal
labels, which fades after sometime. This is because the retention period of retail products on
store shelves is generally lesser than that of industrial products, so it is generally not so important
to retain these barcodes for a longer time.

However, if the products need retention for a longer period, for example, in an industrial
warehouse, then they require to be printed on normal labels rather than thermal paper. This
scenario typically requires fixed barcode scanners or reader gate scanners for scanning. Here,
products are generally transported on a conveyer belt, and for this reason, it is important for the
scanning to be thorough and reliable.
Therefore, provided you have the right type of software to go along with the scanning hardware,
your scanning requirements can be fully taken care of with the wide variety of barcode scanners
available in the market.

Scanner:-

Have you been to a retail store where the individual at the checkout uses a device to scan the
stuff you have just brought into the store computer? Well, that is a barcode scanner and the store
clerk has just scanned a bar code affixed to the product you have bought to prepare your retail
invoice.

Barcodes are much in use in the retail as well POS industry all around the world for
identification of products and product tracking as well. In more advanced scenarios, they are
used in product tracking and inventory management at larger warehouses and industrial
organizations.

There are a number of barcode scanners available in the market, but the right kind of scanner that
you will need to buy is the one that suits your business more effectively. The right type of
barcode scanners improve your efficiency at work and make your business into a profitable
venture. This is because they save considerable time in processing data. Moreover, they push up
your business efficiency considerably.

Depending upon the requirements of your company, one of the many types of barcode scanners
available on the market will definitely suit your needs. Briefly explore the market and even do a
casual search on the internet to find out what is best suited for your needs. They actually depend
upon the kind of application you need.

Therefore, for retail requirements, you will discover that a handheld or wireless scanner is good
enough for your needs. Some retail units also use a pen or a wand type of scanner for their
scanning requirements. This is good where the volume of products required to be scanned are
lesser, but where there are a large number of products that require scanning, your business may
as well as require a countertop model which is of a semi-automatic type. A typical scenario for
this scanner is a store checkout catering to a large volume of customers.

However, if your scanning requirements are for industrial use, then a different type of barcode
scanner must be used. This scanner can be of a fixed mount type. This scanner typically bounces
a laser beam off the bar code at a larger distance. The device is fixed while the product or object
that needs to be scanned is typically moving. In an industrial scenario like this, the product is
usually on an assembly line, and the barcode is generally larger in size that can be read even at a
distance.
However, retail barcodes are generally small. Moreover, they are usually printed on thermal
labels, which fades after sometime. This is because the retention period of retail products on
store shelves is generally lesser than that of industrial products, so it is generally not so important
to retain these barcodes for a longer time.

However, if the products need retention for a longer period, for example, in an industrial
warehouse, then they require to be printed on normal labels rather than thermal paper. This
scenario typically requires fixed barcode scanners or reader gate scanners for scanning. Here,
products are generally transported on a conveyer belt, and for this reason, it is important for the
scanning to be thorough and reliable.

Therefore, provided you have the right type of software to go along with the scanning hardware,
your scanning requirements can be fully taken care of with the wide variety of barcode scanners
available in the market.

Benefits
In point-of-sale management, the use of barcodes can provide very detailed up-to-date
information on key aspects of the business, enabling decisions to be made much more quickly
and with more confidence. For example:

 Fast-selling items can be identified quickly and automatically reordered to meet

consumer demand,
 Slow-selling items can be identified, preventing a build-up of unwanted stock,
 The effects of repositioning a given product within a store can be monitored, allowing
fast-moving more profitable items to occupy the best space,
 Historical data can be used to predict seasonal fluctuations very accurately.
 Items may be repriced on the shelf to reflect both sale prices and price increases.
 This technology also enables the profiling of individual consumers, typically through a
voluntary registration of discount cards. While pitched as a benefit to the consumer, this
practice is considered to be potentially dangerous by privacy advocates.

Besides sales and inventory tracking, barcodes are very useful in shipping/receiving/tracking.

 When a manufacturer packs a box with any given item, a Unique Identifying Number
(UID) can be assigned to the box.
 A relational database can be created to relate the UID to relevant information about the
box; such as order number, items packed, qty packed, final destination, etc.
 The information can be transmitted through a communication system such as Electronic
Data Interchange (EDI) so the retailer has the information about a shipment before it
arrives.
 Shipments that are sent to a Distribution Center (DC) are tracked before being forwarded
to the final destination. When the shipment gets to the final destination, the UID gets
scanned, so the store knows where the order came from, what's inside the box, and how
much to pay the manufacturer.
The reason barcodes are business-friendly is that the scanners are relatively low cost and
extremely accurate compared to key-entry, with only about 1 substitution error in 15,000 to 36
trillion characters entered.[15][unreliable source?] The exact error rate depends on the type of barcode.

Electronic data interchange (EDI) is the structured transmission of data between organizations
by electronic means. It is used to transfer electronic documents or business data from one
computer system to another computer system, i.e. from one trading partner to another trading
partner without human intervention.

It is more than mere e-mail; for instance, organizations might replace bills of lading and even
cheques with appropriate EDI messages. It also refers specifically to a family of standards, e.g.
UN/EDIFACT, ANSI X12.

The National Institute of Standards and Technology in a 1996 publication [1] defines electronic
data interchange as "the computer-to-computer interchange of strictly formatted messages that
represent documents other than monetary instruments. EDI implies a sequence of messages
between two parties, either of whom may serve as originator or recipient. The formatted data
representing the documents may be transmitted from originator to recipient via
telecommunications or physically transported on electronic storage media.". It goes on further to
say that "In EDI, the usual processing of received messages is by computer only. Human
intervention in the processing of a received message is typically intended only for error
conditions, for quality review, and for special situations. For example, the transmission of
binary or textual data is not EDI as defined here unless the data are treated as one or more
data elements of an EDI message and are not normally intended for human interpretation
as part of online data processing." [1]

EDI can be formally defined as 'The transfer of structured data, by agreed message standards,
from one computer system to another without human intervention'. Most other definitions used
are variations on this theme. Even in this era of technologies such as XML web services, the
Internet and the World Wide Web, EDI may be the data format used by the vast majority of
electronic commerce transactions in the world.

1. e-choupal:     

It is designed especially forward to have a direct contact. It provides an e-procurement system

through which the farmers can access the latest and updated information (local, national and
international) related to different farming practices. It provides real time information and
customized knowledge to the farmers through which the farmer can take better decisions and can
have direct contact with the customer, reducing the amount wasted by moving through the
distribution channel of intermediary.        for the farmers of India. Through e-choupal, farmers
who are living in the remote area of the country and cannot manage to have direct contact with
the consumer can come
E-choupal has already become the largest initiative among all internet-based interventions in
Rural India. E-choupal is present in 36,000 villages through nearly 6,000 kiosks across nine
states. ITC (Indian Tobacco Company) is planning to expand the concept of e-choupal further in
15 states of India.  

Wal-Mart: attaining competitive advantage from information technology

Wal-Mart is the world's largest and most profitable retailer, with $44 billion in 1992 sales and
380,000 employees. Its growth from a single store in Rogers, Arkansas to almost 2,000 bright,
attractive stores in 43 states is legendary in American business. Sam Walton was central to the
legend. He built his empire on a belief in providing value for the customer and empowering
employees, who are called associates. The Wal-Mart culture is built on obtaining the most
current information about what customers want, getting the best ideas from employees about
how to run the stores well, and sharing some of the profits with employees. The way Wal-Mart
operates has been a model for General Electric's quest to increase speed and productivity. Jack
Welch, CEO of General Electric said "Many of our management teams spent time there
observing the speed, the bias for action, the utter customer fixation that drives Wal-Mart."

The use of information technology has been an essential part of Wal-Mart's growth. A decade
ago Wal-Mart trailed K-Mart, which could negotiate lower wholesale prices due to its size. Part
of Wal-Mart's strategy for catching up was a point-of-sale system, a computerized system that
identifies each item sold, finds its price in a computerized database, creates an accurate sales
receipt for the customer, and stores this item-by-item sales information for use in analyzing sales
and reordering inventory. Aside from handling information efficiently, effective use of this
information helps Wal-Mart avoid overstocking by learning what merchandise is selling slowly.
Wal-Mart's inventory and distribution system is a world leader. Over one 5 year period, Wal-
Mart invested over $600 million in information systems.

Wal-Mart use telecommunications to link directly from its stores to its central computer system
and from that system to its supplier's computers. This allows automatic reordering and better
coordination. Knowing exactly what is selling well and coordinating closely with suppliers
permits Wal-Mart to tie up less money in inventory than many of their competitors. At its
computerized warehouses, many goods arrive and leave without ever sitting on a shelf. Only
10% of the floor space in Wal-Mart stores is used as an inventory area, compared to the 25%
average for the industry.

With better coordination, the suppliers can have more consistent manufacturing runs, lower their
costs, and pass some of the savings on to Wal-Mart and eventually the consumer. Some 3,800
vendors now get daily sales data directly from Wal-Mart stores. And 1,500 have the same
decision and analysis software that Wal-Mart's own buyers use to check how a product performs
in various markets.

Aside from computers and telecommunications equipment, the technical basis of the point-of-
sale system is the bar code scanner. Bar code scanners make it possible to record the sale of each
item and make that information available immediately for both reordering and sales analysis. The
first use of bar code scanners occurred in the 1970s. After two decades of experience, accurate
inventory tracking using bar code scanners is a competitive necessity for large grocery stores and
retailers.

Consistent with the adoption of any information technology, development and acceptance of bar
codes required agreements on standards. The idea of bar code scanning required that industry
develop a universal product code (UPC) system, a standard method for identifying products with
numbers and coding those numbers as the type of bar code shown in the photo. The UPC codes
that we see routinely today were chosen from a number of alternatives developed by different
companies.

As happens with other uses of technology, the use of bar codes has brought a range of problems
along with the benefits Wal-Mart and other retailers have realized. The use of bar code scanners
made it unnecessary to stamp the price on every item (except in states that still require this for
consumer protection). This reduced costs but also eliminated jobs of some of the clerks who
formerly did the stamping. Other problems (not necessarily related to Wal-Mart) were uncovered
when a UCLA study of 1,200 purchases at three retail chains in California found mischarges on
5% to 12% of the purchases. For example, a researcher was charged a scanner price of $21.99 for
a pair of jeans that were marked on sale for $15.44. The ratio of overcharges to undercharges at
one chain was as high as 5-to-1. In other words, the majority of the mistakes were overcharges,
not undercharges. The Riverside, California district attorney who prosecuted three retailers for
scanner overcharges said, "I don't believe scanners have helped the consumer at all." On the one
hand, the productivity of modern retailing depends on bar code scanners; on the other, the system
of updating the prices is imperfect and may even be an opportunity for dishonesty.

Stepping away from the technology and back to Wal-Mart, even its tremendous success has
brought some problems. The huge Wal-Mart stores on the outskirts of small towns have
overwhelmed many merchants on Main Street. Wal-Mart is so large that it can sell products
profitably at prices less than many small-town merchants' cost. Some feel that Wal-Marts have
killed the traditional business districts of some small towns. If this is true, consumers in these
towns receive the benefits of the best selection and pricing, but lose some of the benefits of
living in a small town.

Pantaloon's experiment with RFID

: Much has been written about Radio Frequency Identification (RFID) and what it can do to
manufacturers–improve production operations, asset utilisation, forecasting, inventory accuracy,
and finally, customer satisfaction by pinpointing the location and status of products as they move
through the manufacturing and retail value chain.

Taking a cue from this, Pantaloon Retail (India) has piloted an RFID project at one its
warehouses in Tarapur using 1,000 RFID tags. Pantaloon is starting from where it matters the
most-the real advantage is to implement this technology at the warehouse and then extend it to
branch offices or retail outlets.

Says Chinar Deshpande, CIO of Pantaloon, "We want to use IT as a strategic tool to differentiate
ourselves in the marketplace with new initiatives such as the RFID project.

While a SAP implementation is currently underway, the RFID initiative was more to do with
improving the efficiency of the entire supply chain as it has become economically viable (for
piloting), and we wanted to be the first to execute it. We want to automate the entire supply chain
from suppliers to warehouse to stores, and make it transparent."

Customer focus

The company began to focus more on IT to bring in greater transparency in its customer
relationships and to streamline its supply chain. Since Tarapur is Pantaloon's central warehouse,
the company decided to deploy RFID there. Deshpande says, "Whenever we procure
merchandise from our suppliers, the entire process had to undergo two to three steps before it
reaches outlets."

At each step, considerable human intervention was required and barcode readers had been
installed at all merchandising locations. Traceability & visibility of goods in the supply chain,
lack of unique identity at each item level, human intervention in processes leading to errors,
effort required for production cycle counting, and tracking reverse logistics were some of the
issues at the apparel factory. Additionally, these challenges led to lack of co-ordination with the
backend at the stores, hampering the company's production planning and inventory management.

Simplicity wins the day

Pantaloon went in for RFID for its simplicity of tagging, operational overhead, efficacy of tag
use, product buffering, its ability to keep track of over-produced items, product-line lead time at
the warehouse, and fast-moving product-lines.

Pantaloon selected a few lines of apparel, primarily shirts and trousers-John Miller formals and
casuals-for its RFID pilot.

The RFID application developed by Wipro Infotech was tailored to the overall solution in line
with Pantaloon's business processes and IT landscape...

Use of IT in retail:-
Overview

IT transformation is a key factor in achieving high performance for retailers. Accenture can help you streamline information technology to enhance

overall performance.

Today's retailers need to transform their IT capabilities for a number of reasons. These include:

To aggregate and analyze customer data to enhance differentiation.

To increase a company's ability to respond to a rapidly changing marketplace through enhanced flexibility and speed.

To operate effectively, retailers need to have one system working across stores (sometimes across national borders) to ensure the most

effective use of stock and to support optimized business processes.

As the hype around technology decreases, retailers are seeing clearly that technology's role is one of an enabler, speeding up of processes and

delivering cost savings. The retail industry faces specific IT management challenges:

Transparency and tracking: Retailers need greater transparency between systems and better tracking to integrate systems from

manufacturer through to consumer to obtain customer and sales information.

Customer data: Information overload is a challenge for retailers because they need to collect and sift through data to convert it into

useful information in a customer-centric industry.

Global data synchronization: Enabled by radio frequency identification/electronic product coding, the entire supply chain is becoming

more intelligent. This creates what Accenture calls Silent Commerce. Benefits for retailers include enabling the use of real-time data to monitor

inventory levels. Radio frequency identification tagging also positions the company to better safeguard its shipments by enabling the tracking of

products from manufacturer through the supply chain.

Accenture collaborates with companies to meet the need for positive IT management. The goal is to enhance business processes and keep up to date

with innovation to become a high-performance business.

Use of IT in the Retail Industry

Retail industry is one of the most prominent business categories in the modern world. It is spread
all over the world, and has a history that is almost as long as human nature. The definition for
Retail is 'Sale of goods in small quantities to the public, usually not for re-sale'.

Historical existence of the industry is clear by the definition itself. Today it has a wide scope
which spans from house hold items such as bread, sugar to electrical and electronic items,
jewelry etc. Stores also range from large supermarkets to small village boutiques.

Retail industry drives the economy of a country. While manufacturing industries create the goods
and services that people need, the retail industry provide a marketplace where people as
consumers, have convenient access to those products and services.

The retail sector is one of the largest industries worldwide. And it is the second-largest industry
in the United States both in number of establishments and in the number of employees. Retail
trade accounts for about 12.9 percent of all business establishments in the United States.

Wal-Mart is the world's largest retailer and the world's largest company with more than $256
billion (USD) sales annually. Wal-Mart employs more than one million associates in the United
States and more than 300,000 internationally. The second largest retailer in the world is France's
Carrefour.

Customer handling is a critical aspect of retailing since it deals with customers directly. Retail
Information Technology, commonly known as Retail IT has become very important in this sense,
since traders have understood the ease it could give for large volume of customer handling.
Computerizing retail stores became a common practice some years ago, but research and
development in the areas have not ended. IT evolves day by day, and it is wrong to believe that
technology, which we use today, is the best, since development is never-ending. Therefore, even
for the retail industry, application of advanced IT solutions would go on.

A basic retail system would have a Point-of-Sale (POS) system to sell goods to the customers.
This can be considered as the front-end of the retail system. A POS would normally allow
cashier to issue goods and tender. The back-end of the system should manage stores, update
accounts, allow periodic reports etc. The system should be able to handle customer returns, apply
special discounts, handle special categories of customers etc. A good retail system should be
competent in enabling users to tender in different types. The number of new tender types is on
the rise with the advancement of technology.

As an example, few decades back, cash was the only mode of tendering, but later, payment types
such as credit cards came in to play and systems in the future would need to handle tendering
offered through mobile phones(May be a payment order bound to a bank sent through a
SMS(Short Message Service) of mobile phones).

The system depends on the business requirements. It is the business that requires systems and
adopts suitable ones for them and not the other way round. Therefore, functionality scope of a
system is purely driven by the business itself. Complexity of the system would increase with the
complexity of the business requirement.

As an example, a small supermarket having a single store would be well off with a standalone
system operating on a single machine. But imagine a large supermarket chain having several
stores and within each store, several terminals. In such a situation, networking and
communication would also be issues that need to be addressed.

Database updates related to store management would become quite tricky with both software and
hardware advancements needed.

About SAP® for Retail

SAP® for Retail is a solution portfolio for end-to-end retail management that allows retailers to
base operations around common insight into the business. The solutions cover merchandise
lifecycle management and planning, supply chain, store operations, shopper experience, and core
finance and human resources capabilities for grocery, hardlines, and softlines retailers. SAP for
Retail helps retailers to better understand their business, anticipate their business needs, and
inspire their shoppers, employees, and shareholders by delivering results.

The SAP for Retail solution portfolio provides grocery, hardlines, and softlines retailers with a
means to turn today's challenges into opportunities with solutions that help drive profitable
multichannel retailing by offering retailers the insight to better understand your shoppers and
business, the operational efficiency to ensure profit, and the adaptability to capitalize on the best
opportunities to grow.

SAP provides retailers with proven solutions for:

 Business intelligence
 Customer loyalty
 Merchandising
 Merchandise and assortment planning
 Price optimization
 Promotion management
 Forecasting and replenishment
 Warehouse management
 Workforce management
 Point-of-sale
 Sustainability performance management

Wal-Mart: attaining competitive advantage from information technology

Wal-Mart is the world's largest and most profitable retailer, with $44 billion in 1992 sales and
380,000 employees. Its growth from a single store in Rogers, Arkansas to almost 2,000 bright,
attractive stores in 43 states is legendary in American business. Sam Walton was central to the
legend. He built his empire on a belief in providing value for the customer and empowering
employees, who are called associates. The Wal-Mart culture is built on obtaining the most
current information about what customers want, getting the best ideas from employees about
how to run the stores well, and sharing some of the profits with employees. The way Wal-Mart
operates has been a model for General Electric's quest to increase speed and productivity. Jack
Welch, CEO of General Electric said "Many of our management teams spent time there
observing the speed, the bias for action, the utter customer fixation that drives Wal-Mart."

The use of information technology has been an essential part of Wal-Mart's growth. A decade
ago Wal-Mart trailed K-Mart, which could negotiate lower wholesale prices due to its size. Part
of Wal-Mart's strategy for catching up was a point-of-sale system, a computerized system that
identifies each item sold, finds its price in a computerized database, creates an accurate sales
receipt for the customer, and stores this item-by-item sales information for use in analyzing sales
and reordering inventory. Aside from handling information efficiently, effective use of this
information helps Wal-Mart avoid overstocking by learning what merchandise is selling slowly.
Wal-Mart's inventory and distribution system is a world leader. Over one 5 year period, Wal-
Mart invested over $600 million in information systems.

Wal-Mart use telecommunications to link directly from its stores to its central computer system
and from that system to its supplier's computers. This allows automatic reordering and better
coordination. Knowing exactly what is selling well and coordinating closely with suppliers
permits Wal-Mart to tie up less money in inventory than many of their competitors. At its
computerized warehouses, many goods arrive and leave without ever sitting on a shelf. Only
10% of the floor space in Wal-Mart stores is used as an inventory area, compared to the 25%
average for the industry.

With better coordination, the suppliers can have more consistent manufacturing runs, lower their
costs, and pass some of the savings on to Wal-Mart and eventually the consumer. Some 3,800
vendors now get daily sales data directly from Wal-Mart stores. And 1,500 have the same
decision and analysis software that Wal-Mart's own buyers use to check how a product performs
in various markets.

Aside from computers and telecommunications equipment, the technical basis of the point-of-
sale system is the bar code scanner. Bar code scanners make it possible to record the sale of each
item and make that information available immediately for both reordering and sales analysis. The
first use of bar code scanners occurred in the 1970s. After two decades of experience, accurate
inventory tracking using bar code scanners is a competitive necessity for large grocery stores and
retailers.

Consistent with the adoption of any information technology, development and acceptance of bar
codes required agreements on standards. The idea of bar code scanning required that industry
develop a universal product code (UPC) system, a standard method for identifying products with
numbers and coding those numbers as the type of bar code shown in the photo. The UPC codes
that we see routinely today were chosen from a number of alternatives developed by different
companies.

As happens with other uses of technology, the use of bar codes has brought a range of problems
along with the benefits Wal-Mart and other retailers have realized. The use of bar code scanners
made it unnecessary to stamp the price on every item (except in states that still require this for
consumer protection). This reduced costs but also eliminated jobs of some of the clerks who
formerly did the stamping. Other problems (not necessarily related to Wal-Mart) were uncovered
when a UCLA study of 1,200 purchases at three retail chains in California found mischarges on
5% to 12% of the purchases. For example, a researcher was charged a scanner price of $21.99 for
a pair of jeans that were marked on sale for $15.44. The ratio of overcharges to undercharges at
one chain was as high as 5-to-1. In other words, the majority of the mistakes were overcharges,
not undercharges. The Riverside, California district attorney who prosecuted three retailers for
scanner overcharges said, "I don't believe scanners have helped the consumer at all." On the one
hand, the productivity of modern retailing depends on bar code scanners; on the other, the system
of updating the prices is imperfect and may even be an opportunity for dishonesty.

Stepping away from the technology and back to Wal-Mart, even its tremendous success has
brought some problems. The huge Wal-Mart stores on the outskirts of small towns have
overwhelmed many merchants on Main Street. Wal-Mart is so large that it can sell products
profitably at prices less than many small-town merchants' cost. Some feel that Wal-Marts have
killed the traditional business districts of some small towns. If this is true, consumers in these
towns receive the benefits of the best selection and pricing, but lose some of the benefits of
living in a small town.

Challenges

Challenges(optional)
To become a truly flourishing industry, retailing needs to cross the following hurdles:[18]

 Automatic approval is not allowed for foreign investment in retail.

 Regulations restricting real estate purchases, and cumbersome local laws.
 Taxation, which favours small retail businesses.
 Absence of developed supply chain and integrated IT management.
 Lack of trained work force.
 Low skill level for retailing management.
 Lack of Retailing Courses and study options
 Intrinsic complexity of retailing – rapid price changes, constant threat of product obsolescence
and low margins.

To overcome some of the challenges faced by modern retail, the country is developing a support
infrastructure in form of specialised retail schools. One such skill development initiative has
been taken by TKWs Group. Its TKWs Retail School has already training over a thousand
students and retail professionals for different retail skills. TKWs Retail School is also associated
with government projects like enhancing retail experience of foreign tourists, improving retail of
handicraft and local produce, skill development of village youth.

SAP

The problem is not the software—the SAP Retail module now handles both the volume of
transactions and the complexity required by the retail industry. The primary culprits are data
quality and user errors.

Many payment errors can be attributed to insufficient controls and quality checks on the data
conversion and data entry processes. A large volume of data must be transferred from an old
system (or systems) into SAP. For pricing and multiple layers of SKUs, some of the data (or
even most, depending on the legacy system) is entered manually. Data entry often falls to
temporary workers who do not have the expertise to make sense of, or properly code,
complicated terms and allowances.

Unfortunately, this master vendor data feeds all of the payments processes.  The quality of
transactions will depend upon the quality and integrity of the data entered into the system. In one
Americas SAP Users’ Group (ASUG) survey, 93% of respondents said that data management
issues negatively impacted their projects.

The other culprit is related to the ongoing use of the system. Even with training, users will make
mistakes in data entry and clearing and in reconciling unfamiliar error and exception reports until
they have been on the system for many months. Some of the most common, ongoing challenges
include: duplicate payments, invoice-to-PO matching, variance handling, treatment of under-
charges, credit notes and memos, family product management, deal and promotion time frames,
conditional allowances, and correcting GR/IR Balancing.

The good news is that the spike in recoveries is just that—a spike. Based on the experience of
other large retailers, the dollar amount of recoveries will subside back to, or below, the old base
level.

Transistion from traditional to modern retailing:-

With a share of 95% of totaol retail revenews traditional retailing continues to be the backbone
of the retail industry.

Over 12 million small and medium retail outlets exisits in india the highest in any country

Traditional retail formats are highly popular in small towns and cities with primary presene of
neighbourgood(kirna stores, push cart, vendors, melas and mandies)