The retailer

EY’s publication in consumer

products and retail sector

January to March 2017

 Foreword
Dear reader,

We are delighted to present to you the January—March 2017 edition of The retailer, our quarterly publication in the
consumer products and retail (CPR) sector.

In this issue, we have highlighted the emerging dynamics of the vast Indian market. This potential growth can drive
businesses to progress toward better analytics, evolve with better solutions and improve compliances.

In the US$49 billion Indian FMCG sector, food has a 20% share of the market1 . However, food safety is starting to attract
attention with concerns raised around popular food products. The tidal wave in the sector has heightened awareness
across sections of the Indian population.

With growing market opportunities, product compliances have come under the scanner of the Food Safety and Standards
Authority of India (FSSAI), which was established to enforce provisions of the Food Safety Standards Act.

We bring to you the role of FSSAI and an overview of the compliances required in the food cycle. The farm to fork
mechanism will give you an understanding of the risks and the way forward.

Not only have compliances brought about a change in the way businesses function, but the role of analytics is also
changing in a successful business atmosphere. This number game for companies is best won when it is insights-driven.
The escalation and integration of analytics in daily business is a global phenomenon.

Finally, we continue our featured section, the “Innovation board,” where we attempt to present to you snapshots of
recent innovations that have emerged in the Indian and global consumer goods and retail space.

We hope you enjoy reading this issue of the retailer and look forward to your valuable comments and feedback.

Pinakiranjan Mishra

Partner and National leader, Consumer Products and Retail, EY, India
Market Segment Leader, Consumer Products and Retail, EMEIA

1
Source: http://www.ibef.org/download/FMCG-February-2017.pdf
Contents

04 India growth paradigm

Understanding the growing

10 significance of food safety in the
retail sector

16 Analytics — an enabler
or hurdle?

20 Innovation board

Involve yourself:

We look forward to hearing your feedback and suggestions.

To contribute to editorial content, please contact Riddhi Bhimani
T: +91 22 61921618
E: riddhi.bhimani@in.ey.com
 1
India growth paradigm
Executive highlights
Urban areas are the engines driving India’s growth

>470mn >70% 8.8%

People will reside in Indian Of national GDP will be generated Real GDP growth of urban India
cities in 2020, up from 420mn by urban areas by 2020, up from 2015-20 4% higher than rural
in 2015 65% in 2015 India

The 50 largest cities* have transformed into major consumption hubs

123mn INR 26.4trn

Of household income was concentrated
People lived in these cities in 2015** in such markets in 2015

A “new wave” of metros and mini-metros has emerged

8 2 26
Metros which possess household Additional markets-Jaipur and Cities’ household income will
income of atleast INR 800bn Surat-will cross this INR 800bn exceed INR 400bn in 2020-up
threshold before 2020 from 18 such cities in 2015

* Largest 50 cities as per cumulative household income, excluding cities bordering metros and in Jammu & Kashmir
** A further 41mn lived in surrounding areas as part of the wider urban agglomeration-areas that do not fall under the definition of a ‘city’ per the government Census

4 | The retailer
 42 new wave markets are catching up to India’s 8 metros

6.9mn 61% Top-11

Addition to the population base
of 42 new wave markets from
2015-20- these cities’ population
recently surpassed that of metros
and the gap will continue to widen
Share of household income in 2020 Fastest growing cities in terms of
for new wave markets relative to 2015-20 annual GDP growth are
metros-up from 58% in 2010 new wave markets

Markets with the greatest gap between demand-side consumption

and supply-side penetration belong to this new wave of non-metros

Top-23 19% of metros’ household

These 23 markets represent

income-but only 12% of retail outlets 15% of telecom

Markets that are the most
under-tapped by companies centres and 17% of malls
today are all new wave cities

Media penetration in these new wave markets is rising and has

even passed that of metros in certain mediums

42 new wave markets’ total population is similar to that of 8 metros today, but they have…

.88x
as many TV households
1.06x
1.26x times a large print circulation***
as many DTH households

0.63x 2.17x
as many active Facebook users as many operational radio frequencies

*** Adjusted from urban area-level to city-level.

Reference: Above article is an extract of the following EY publication, “India’s growth paradigm” authored by Farokh Balsara, Ashish Pherwani, Bharat Rajamani, Nripendra Singh

The retailer | 5
 Amritsar
Jalandhar
Chandigarh
Ludhiana
Dehradun

Meerut
Delhi

Agra
Jaipur Lucknow
Kanpur
Jodhpur
Gwalior Varanasi Patna
Kota Allahabad

Dhanbad
Bhopal Ranchi
Ahmedabad
Indore Jabalpur Jamshedpur Kolkata
Rajkot Vadodara
Surat
Nagpur Raipur
Bhubaneshwar
Nashik
Aurangabad
Mumbai
Pune
Warangal
Vizag
Hyderabad
Vijaywada

Hubli-Dharwad

Bangalore
Chennai
Mysore

Kozhikode Coimbatore
Trichy
Kochi
Madurai

6 | The retailer
Trivandrum
 8 metros
Traditional

Ahmedabad AHM

Bangalore BNG

Chennai CHEN

Delhi DEL

Hyderabad HYD

Kolkata KOLK

Mumbai MUM

Pune PUNE

Guwahati

42 New wave cities

2 Fresh metros 10 Next set of 30 Additional emerging markets
high-potential cities

Jaipur JPR Bhopal BHOP Agra AGRA Kota KOTA

Surat SURT Chandigarh CHND Allahabad ALLH Kozhikode KOZH

Indore INDR Amritsar AMRT Ludhiana LUDH

Jabalpur JBLP Aurangabad AURA Madurai MADU

Kanpur KANP Bhubaneswar BHUB Meerut MRUT

Lucknow LUCK Coimbatore COIMB Mysore MYS

Nagpur NAGP Dehradun DHRD Nashik NASH

Patna PATN Dhanbad DHNB Raipur RAIP

Vadodara VAD Guwahati GUW Rajkot RAJK

Vizag VIZ Gwalior GWAL Ranchi RNCH

Hubli-Dharwad HUBL Trichy TRCH

Jalandhar JALN Trivandrum TRV

Jamshedpur JMSH Varanasi VARAN

Jodhpur JODH Vijayawada VIJY

Kochi KOCH Warangal WRNG

The retailer | 7
 Untapped
FMCG
The steady rise of modern trade channels and disposable incomes
provide a strong platform for India’s FMCG industry, projected 2016e Ad spend: FMCG
2
to grow 6%-8% annually till 2020 . While consumption has been
sluggish in recent years, particularly in rural areas, a normal 6%
2
monsoon in 2016 is expected to increase demand . Meanwhile, 1%
the continuing strength of urban clusters has seen brands focus 19%
TV
on new products/variants in urban-centric categories, and as these
INR 146bn Print
consumers move up the economic ladder, there is a burgeoning
3 Radio
demand for premium products . Given these consumption trends,
and amid a fiercely competitive marketplace, it becomes imperative Other
74%
for companies to tap under-saturated markets.
Top-10 untapped markets: Chandigarh, Dehradun, Jabalpur,
Jamshedpur, Kolkata, Kota, Kozhikode, Trivandrum, Vijayawada,
Vizag

Market trends: FMCG39

4

20 Under-tapped
Annual expenditure per capita on FMCG (INR 000s, 2015)

MUM
markets
CHND

18
BNG
TRV
16
PUNE

VIZ
14 KOLK

CHEN

12
VIJY
KOZH
JBLP
DEL
10 JMSH KOTA HYD
DHRD JPR

8 SURT AHM

6
Size of bubble denotes
total 2015 population
4
0 10 20 30 40 50 60 70 80

Penetration of retail outlets (index, 2016)

2
EY Analysis
3
“FMCG Sector Overview”, India Brand Equity Foundation, Jan.2016; “Is FMCG growth story tapering?”, Business Standard, Jan.2016; “Anticipate with Analytics: The
Future of FMCG”, Nielsen, Nov. 2015; EY industry discussions
4
“Market Skyline”, Nielsen Micro Marketing & Economics, 2015; “Census of India”, Ministry of Home Affairs, 2011; “City-wise Points of Interest”, MapMyIndia, 2016; EY
Analysis. (Penetration defined as per capita/per sq. km. density of retail outlets).

8 | The retailer
potential
Retail, fashion and durables
India’s retail sector is set to continue its double-digit growth on
the back of rising disposable incomes, rapid urbanization and 2016e Ad spend: Retail, fashion and durables
the growth of organized and internet retailing. Fashion (apparel
and footwear) is the largest segment in Indian organized retail
and this market is projected to grow at a healthy CAGR of ~13% 15%
5
during 2015-2020 from ~INR 4trn in 2015 . While organized 4% 31%
retail’s share of the national market is projected to rise from TV
~10% today to ~16% by 2020, many new wave cities remain INR 56bn Print
under-penetrated and hybrid offline/online distribution models Radio
5,6
are becoming increasingly popular . Given the millions of Other
aspirational consumers in these markets and their appetite for 50%
brands, the untapped opportunity is significant.

Top-10 untapped markets: Jaipur, Jamshedpur, Kota, Mysore,

Nagpur, Raipur, Trivandrum, Vadodara, Vijayawada, Vizag

Market trends: Retail, fashion and durables743

Under-tapped
Annual expenditure per capita on clothing, footwear and

markets
- MUM
16 TRV

VIZ
PUNE

14
appliances (INR 000s, 2015)

NAGP
JPR
RAIP VIJY
12 VAD

KOLK
HYD AHM
JMSH BNG
10 KOTA
MYS
SURT

CHEN
DEL
8

Size of bubble denotes

total 2015 population
4
10 20 30 40 50 60 70 80

Penetration of malls (index, 2016)

5
EY Analysis
6
“Retail 2020: Retrospect, Reinvent, Rewrite”, Retailers Association of India, 2015; “The Year That India’s eTail Announced Its Arrival”, Technopak, 2014
7
“Market Skyline”, Nielsen Micro Marketing & Economics, 2015; “Census of India”, Ministry of Home Affairs, 2011; “City-wise Points of Interest”, MapMyIndia, 2016; EY
Analysis. (Penetration defined as per capita/per sq. km. density of malls).

The retailer | 9
 2
Understanding the growing significance of
food safety in the retail sector
The Indian food industry is on an upward trajectory and Regulatory background
emerging as a high growth space considering its contribution
to the global food industry. Showing immense potential, it is Governments around the globe have been actively introducing
expected to grow at an 11% CAGR to US$65.4 billion by 20188. regulatory standards and guidelines for the procurement,
The food space also forms a significant chunk of India’s retail production and provision of safe and hygienic food. In India,
sector, which is further expanding and is expected to reach historically the onus for safe and wholesome food for human
US$894.98 billion by 20209 . The successful penetration of consumption has been with multiple ministries and departments.
retail into tier 2 and 3 cities driven by the introduction of diverse The Food Safety and Standards (FSS) Act, enacted in 2006,
food varieties (both ethnic Indian and global foods) is one of the was India’s endeavor to harmonize its food regulations with
prime reasons for the phenomenal growth of the industry. Some international standards. A statutory body, the Food Safety
other factors that have fueled this growth include: and Standards Authority of India (FSSAI), was established to
►► I  ncreasing disposable income and awareness of health and enforce the provisions of the FSS Act, which regulates the
nutritional food choices manufacturing, storage, distribution, sale and import of food
and related products. The responsibility of implementing the
 rowing organized retail and e-commerce, which is
►► G FSS Act rests with the Ministry of Health and Family Welfare.
prompting increasing investments in infrastructure and cold
chains
 he Government’s aim to build India as a food sourcing hub
►► T
given its large agricultural base and growing sectoral food
processing focus

8
Source: http://www.ibef.org/industry/indian-food-industry.aspx
9
Source: http://www.ibef.org/industry/indian-food-industry.aspx

10 | The retailer
The key milestones in the journey of food safety regulations are captured in the illustration below:
2006
►► 23 August: FSS Act 2006 approved. Focus
shifts from adulteration to a more holistic
2008
approach of ensuring food safety ►► 5 August: FSSAI established to lay down
science-based standards and regulate the
2011 manufacture, storage, distribution, sale
►► FSSAI Rules and 6 major regulations notified and import to ensure availability of safe and
under the FSS Act wholesome food for human consumption
►► Licensing and registration of food
businesses
►► Packaging and labeling of food products
►► Food product and additive standards
►► Prohibition and restriction on sales
►► Contaminants, toxins and residues 2012
►► National survey on adulteration of milk
►► Laboratory and sampling analysis
►► Product approval guidelines
►► Food import clearance system
►► Authorization of NABL accredited food testing
►► Food licensing and registration business laboratories

2013
►► Notification on FSSAI license number and logo
on every food label
►► CCSCH established in Codex with India as the
host country
2014
►► Online food product approval system

2015
►► First ever food product recall in India
►► Gazette notification on trehalose, phytostanol
2016
►► Risk Assessment Cell set up in FSSAI
and oligofructose
►► FSMS Division set up in FSSAI
►► Standards for NOTS and crop contaminants,
►► 10@10 initiatives
pullulan, lecithin in biscuits and steviol
►► Food import regulations
glycoside
►► Standard for proprietary foods
►► India (FSSAI) becomes the regional
coordinator for Asia in Codex ►► Laboratory parameters for analysis of food
products
►► Notification on standards for nutraceuticals,
health supplements etc. ►► Adopted 33 Codex Vertical Standards for food
products
►► Operationalization of FSSAI functioning at
Tuticorin Port ►► Revised limits for heavy metals in food
►► Manuals of Methods of Analysis
►► Adoption of 11,000 standards for additives
and limits in various food categories
►► Establishment of FSKAN
►► Standards for alcoholic beverages
►► Standards for fortification of foods
Source: EY Research ►► Launch of Food Safety Voice
The retailer | 11
 01
02
Safety and Scientific committees
Awareness/training standards: and panels
science and Networking of
risk-based institutions
Risk assessment and
communications
06 Some key
Licensing/ responsibilities of
Licensing and registration Outreach:
FSSAI include
registration
Renewals,
360-degree
view
03
modifications and
returns Citizen outreach
Improvement notices Corporate inclusion
and audits Partner programs
Surveillance and
enforcement
Infrastructure and

05 capacity building

Recall/traceability 04
Passive
Active

Source: EY Research

Rising concerns around food safety

The question of food safety has always been a global concern.
Recent reported cases of food adulteration, increasing
consumer awareness and rise in the volumes and frequency of
food imports and exports have elevated the risks associated
with the quality and safety of food products. As a result,
global regulators have increased their scrutiny on the quality
of food during its entire life cycle — from procurement to
consumption. Large food business operators (FBO) in the food
ecosystem will be expected to step up and conduct proactive
food compliance and capacity-building activities to provide safe
and wholesome food to consumers. This can be done through
various mechanisms and tools to measure the quality standard
of products. FSSAI regulations may differ for the various FBOs —
for instance, the requirements for products would vary based on
their medium of sale, such as through brick-and-mortar stores
or e-commerce websites and as non-prepacked (loose) foods.

12 | The retailer
They may also be different based on the type of food product. managing food safety and adhering to FSS Act have become
Setting up a robust food safety management (FSMS) plan and important cogs in the wheel of compliance for all companies.
dashboards for real-time monitoring is another way to regularly
Below are the key risks and compliance areas that require
check food safety standards. Non-compliance with regulations
attention in the food cycle — from the point of procurement to
can have a damaging impact on a company’s reputation in
the point of consumption.
the market, possible penalties and even product recalls. Thus,

Pre-treatment
Sorting
Consumer: local and
Processing
exports
Retail and e-tail

Packaging and labelling

Raw material: Local
Storage
and foreign
Advertisement
Transportation
Research and
development (R&D)

Risk Compliance

►► Vendor and raw material non-compliance ►► Vendor license and raw material standards

►► Unsafe practices leading to unsafe foods: contaminants, ►► Product and operational compliance, comprehensive
microbes, pesticides, metals etc. FSMS and Schedule 4 audits

►► Non-standard packaging, misbranding and labeling ►► Packaging and labeling compliance

defects
►► Supply chain compliance
►► Contamination, temperature abuse, product spoilage
►► Advertising compliance
etc.
►► License and consumer complaint redressal
►► Misleading advertisements
►► New product standards, advertisement and claims
►► Misinformation to the consumer
assessment
►► Novel/non-standardized products

The retailer | 13
What does this mean for retailers? Way forward
FBOs today need to strike the right balance between being For retailers, it would be prudent to understand the changing
successful and profitable and, at the same time, complying with regulatory trends in the food safety space, and imbibing
regulatory requirements. In striving to do so, FBOs may face a leading global practices in daily processes can help mitigate
number of challenges, which include: potential cases of non-compliance. Some of the ways through
which retailers can help in mitigating cases of low quality food
 aintaining the safety and hygiene of food products
►► M
distribution are:
throughout the supply chain and when crossing borders
►► E
 xercising caution and undertaking required procedures
►► Providing safe food to the end consumer
►► For importing food into the country
►► Complying with evolving regulatory requirements
►► For introducing own or private labels
►► Adopting food safety systems
►► Ascertaining traceability and maintaining previous
►► Identifying, mitigating, controlling and monitoring risks compliance records from procurement source
New age and discerning consumers are steadily demanding ►► Formulating adequate procedures for maintaining records
better and safer food through convenient channels. As a result, of retail compliances in order to demonstrate that
retail becomes a critical touch point in the lifecycle of a food necessary requirements were adhered to
product. If an issue is reported at a retail outlet, the FBO in
question should ideally be able to trace each ingredient used ►► Having a consumer grievance redressal process along with
in product manufacturing back to its source. FBOs should also operating procedures for regulatory inspections and recalls
have proper documentation, records, paper trail and approvals ►► Using technology for compliance management
of any sort to solve a problem.
The last mile of the consumer food chain can be safeguarded
Food traceability is therefore becoming increasingly important through a “farm to fork” compliance approach only with the
to garner visibility in the supply chain and possibly manage proactive and collaborative participation of the retail sector.
future issues to safeguard public health as well as FBOs. This
is intended to help companies understand and implement
ways to track products throughout the food chain with an
intent to improve food safety and deter fraud, adulteration,
product recalls and counterfeit products. Determining the
origin of products and ingredients from the farm through food
processing to retail, foodservice and the consumer is growing in
importance.

14 | The retailer
Vinay Garodiya, Executive Director, Fraud Investigation & Dispute Services
Vinay Garodiya is an Executive Director with EY India’s Fraud Investigation & Dispute Services practice. He
has 13 years of experience and has led large investigations around corporate fraud, misconduct, bribery
and corruption as well as risk assessments for global multinational companies. Vinay leads the Anti-bribery
& Corruption and Food Safety Compliance Services as part of the practice. His areas of expertise include
investigations, risk assessment, setting up of compliance frameworks, compliance testing, due diligence and
conducting compliance training.

T : +91 22 619 22164

E : vinay.garodiya@in.ey.com

Raghu Guda, Director, Fraud Investigation & Dispute Services

Raghu Guda is a Director with EY India’s Fraud Investigation & Dispute Services practice, focusing on food
safety compliance. Raghu has more than 25 years of work experience advising clients on business processes,
IT systems and regulatory compliance. Raghu has worked with the Retailers Association of India (RAI) in
disseminating food safety licensing and other compliances to the members of the Association. Raghu’s
experience includes validation of the vendors, products and the supply chain for both, online and retail chains.

EY continues to be the thought leader and the knowledge partner for FSSAI, including initiatives around the
development of sector-specific food safety management plans and e-commerce regulations.

T: +91 40 6736 2000

E: raghu.guda@in.ey.com

The retailer | 15
 3
Analytics — an enabler or hurdle?
Big data is fundamentally changing the way an enterprise operates. Companies are recognizing the importance of the insights that
data can deliver and help them not only improve their bottom line but also enhance the customer experience and relationships.
Some of the key trends in analytics are as follows10:

Explosion of data

“
Explosive growth of mobile devices and machine sensors is dramatically increasing
the data that organizations need to consider.

Companies don’t have

Lower technology costs
Falling costs associated with data storage and processing are making it possible to analytics challenges or
handle the explosion of data. opportunities. They have
business challenges and
Core analytics opportunites, which
Need to combine transactional data into a single, coherent set of services that has analytics can play a
the potential to increase the efficiency and effectiveness of real-time analytics.
role in tackling.
Chris Mazzel
Less complex tools

“
The power of analytics is now in the hands of many more individuals. New tools have Global Chief Analytics Officer, EY
reduced the need to understand advanced statistics and programing languages.

C-suite agenda
Increasing competition, cost and regulatory pressures are motivating leaders to
apply analytics to derive insights for key business operations.

However, with ever-increasing data sources, it is not always

easy to integrate the information and derive a meaningful
conclusion. Companies today are faced with the following
45% Must devote significant manpower to collecting
and analyzing data

44%
challenges10: Too much information to effectively leverage for
business
►► Companies have difficulty identifying the right data and
determining how to best use it.

►► Data access and connectivity can be an obstacle. A

34% Between social media and traditional internet
information outlets, too many data sources to
keep track of
majority of the data points are not yet connected today,
and companies often do not have the right platforms to
aggregate and manage the data across the enterprise. 22% The time devoted to collecting and analyzing data
is more than its value to the company

20%
►► Data security: Companies also have some misguided Ever-changing web data makes it impossible to
perceptions regarding some of the challenges data analysis track trend
presents. And, unfortunately, these misconceptions are
holding many companies back from taking advantage
of a data analytics solution. Here are the top challenges
reported:

10
Source: Challenges regarding big data and analytics
http://www.askingsmarterquestions.com/big-data-what-it-is-and-how-to-overcome-its-challenges/

16 | The retailer
Challenges in the CPG sector:
A survey conducted for CPG companies with the aim of understanding the role of analytics in the sector, specifically which analytics
activities are most commonly adopted for decision-making, highlighted the following**:

CPG companies seeking to differentiate and build competitive advantage are looking to analytics.

►► 78% of the respondents claim that analytics and business intelligence are a top priority in their organizations.

►► Leading analytics adoption is in operations and production, followed by financial management and budgeting.

►► Basic analytics tasks, such as aggregating and capturing information (88% and 68%, respectively), are more popular,
particularly for corporate performance management and for sales and marketing activities.

►► The strength of social media is rising: it should be used for sales and marketing, but also to fuel innovation when consumer
insight has been captured through analytics.

36% of the respondents ranked “Existing culture does not encourage sharing information” as a challenge11.

Solution to these challenges:

A global survey of 652 CFOs, CIOs and EY professionals
highlighted the following:

►► The need to improve analytics capabilities and data

“ Analytics is the foundation for the CEO
to get greater transparency and insight,
and and to sheer the business.

“
management is the top driver of collaboration between Helen Arnold, CIO, SAP
CFOs and CIOs.
►► However, only 53% of CFOs say that they make a significant
contribution to determining where analytics can add most
value to the organization.

“
Too often, businesses have a discussion around
technology, when actually the conversation should
be about the outcome they’re trying to achieve
David Whiteing, CIO, Commonwealth Bank of Australia
The potential of analytics is so
great, however, that knowing where
to start can be very difficult to identity.
For now, the role that CFOs play is relatively
limited. Only 53% of CFOs say that they make a
significant contribution to determining where

“
analytics can add most value
to the organization

11
Source : ** https://www.accenture.com/t20150523T033001__w__/usen/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/
Global/PDF/Dualpub_7/Accenture-CPG-Analytics-European-Survey.pdf

The retailer | 17
On the basis of the survey results, the top 5 factors for building an analytics-led organization have been identified as follows12:
Take a business-led approach, not a
01
technology-led one
Organizations need to have a strategy and vision for how data
will deliver competitive advantage and create value. World-
class, data-driven organizations need to embed analytics in
most, if not all, decisions and processes.
A technology-led approach will not deliver this transformation.
For example, success will rest, in part, on individual business
units sharing information and data, bringing their perspectives
to the bigger picture. Broad alignment of the organization
behind a strategic vision will therefore be crucial.
Analytics efforts should be focused on solving specific issues
with a tangible return.
Make data a fourth pillar of the business, and
02
leverage it as an asset
Standing alongside people, process and technology, data is now
becoming a fourth pillar of the business. Businesses see data
insights as potentially transformative and as a crucial source of
competitive edge over their industry rivals. In a recent EY study
of data’s impact on the financial services industry, 83% of the
firms surveyed agreed that data is their most valuable strategic
asset.
For example, analytics provides CFOs with powerful information
to drive investment decision-making. Gary Lennon, Executive
General Manager, Finance at National Australia Bank, used
analytics to assess the profitability of customer transactions
across different channels, which enabled the bank to adjust its
pricing strategy.
“We can now assess and make decisions based on the richness
of information we have,” says Lennon. “Because we know
exactly the cost of selling through a digital channel versus the
cost of selling through a broker or retail network, we can make
different pricing decisions. That sort of insight has incredible
possibilities.”
12
Source: EY Publication Partnering for performance. Our findings are based on a global survey of 652 CFOs, conducted by Longitude Research on
behalf of EY, and a series of in-depth interviews with CFOs, CIOs and EY professionals.
18 | The retailer
03 Do not forget the human element of analytics
Analytics involves much more than the right technology or
insights from the smartest data scientists. Although these are
important factors, analytics will ultimately fail unless it impacts
the decisions of end-users.
At heart, most analytics programs still involve human beings
making decisions. For large organizations, this raises the need
for sophisticated change management for its people, including
training. At a broader organizational level, it is a question of
how the company can embed analytics into its day-to-day
business processes at scale. Incentives and metrics will need
to be adjusted so that they encourage the right behaviors and
mindset.
Build the right organizational structure and
04
governance framework
Building a coherent and integrated organizational structure
and governance framework is essential to support value-driven
decision-making. A fragmented approach can cause a range of
problems, from high costs to a lack of standardization on KPIs.
It is an ongoing issue across industries, and there is increasing
focus on addressing this problem.
Historically, governance of data was spread across a range
of functions, from HR to IT, each with its own policies and
standards. Data fragmentation was often the result. This is why
some organizations are introducing chief data officers or chief
analytics officers, who are charged with driving a coherent
approach to enterprise-wide data governance and management.
Consider legal, regulatory and trust issues
05
throughout the journey
The legal and regulatory questions that surround the use of
data represent a significant barrier. Concerns such as privacy,
data protection, competition law and intellectual property rights
remain hugely sensitive. The potential penalties for the misuse
or loss of data are rising.
In a recent EY research, 70% of consumers said that they are
“never happy” with companies sharing personal information,
and 49% said that they will be less willing to share personal
information over the next five years.
Niyati Sood, Senior Manager, Risk Advisory
Niyati is a part of the EY Analytics team focusing on Digicube (EY’s Risk Analytics suite) and CIC (Continuous
Control Monitoring) as a solution.
She has over 10 years of experience in Advisory services working across clients in India, the UK, Asia, Europe,
South Africa, Australia and the US.

T: +91 22 6192 23792

E: Niyati.sood@in.ey.com

The retailer | 19
Innovation
board
Walmart adopts blockchain technology
to tackle food safety
The leading retailer has launched a test with blockchain,
a database technology already being widely tested in the
financial and healthcare industries. Blockchain is a digital ledger
system that allows companies involved in business — including
growers, distributors and retailers — to record their transactions
securely in the cloud. The database makes it difficult to reverse
or change the recorded data. Walmart is leveraging the
technology, co-developed with IBM, to track and trace pork in
China and packaged produce in the US. Walmart aims to utilize
the technology to improve the safety and security of fresh food
in its supply chain. With blockchain, the retailer will have better
understanding of suppliers and third-party logistics as well as
a database that can be referred to if anything goes wrong.
The technology will help Walmart to improve its supply chain
efficiency, identify bottlenecks and reduce food waste.

Link used — www.progressivegrocer.com/departments/

technology/blockchain Link accessed on – 1 March, 2017

Nestlé Waters adopts iControl’s retail
analytics solution
Nestlé Waters, the leading global bottled water company, has
adopted iControl’s Retail Analytics Solution. iControl provides
retailers, consumer product goods companies, brokers etc.
with a collaborative SaaS solution where they can share critical
trading information such as POS activity in a secure web portal.
The platform enables timely, data-driven decisions that boost
sales, reduce waste and promote efficiency.
Link used — www.icontroldata.net/blog/nestle-waters-adopts-
icontrols-retail-analytics-solution Link accessed on – 1 March,
2017
Ikea creates kitchen from recycled
plastic bottles
Aiming to create a more sustainable kitchen front, Ikea has
paired with Swedish design studio Form Us With Love to create
kitchen cabinets made entirely from reclaimed industrial wood
and recycled plastic bottles. IKEA’s efforts form part of a
circular economy based on the principle of recovery, recycle and
regenerate. Other major global brands are also getting involved
in circular economics. P&G plans to produce the world’s first
recyclable shampoo bottle made from up to 25% recycled beach
plastic. Adidas has partnered with Parley For the Oceans to
create running shoes made from waste plastic recovered from
the sea. Unilever aims to have all of its plastic packaging fully
reusable, recyclable or compostable by 2025.

Link used — www.weforum.org/agenda/2017/02/ikeas-latest-

kitchen-is-made-of-recycled-plastic-bottles/ Link accessed on – 1
March, 2017

20 | The retailer
McDonald’s innovation of the straw
McDonald’s has introduced a special three-holed plastic straw to
help customers better mix the mint and chocolate flavors of their
new dual-layer shake Chocolate Shamrock Shake. The company
hired two engineering firms JACE and NK Labs — people behind
Google, NASA and DARPA projects — to build a straw that allows
for perfectly proportioned sucking of its new shake.
Link used — www.psfk.com/2017/02/mcdonalds-innovates-
straw.html Link accessed on – 1 March, 2017
Paytm introduces Paytm Mall
Paytm has launched Paytm Mall, a dedicated smartphone
application and website for its online marketplace business. The
platform, inspired by Alibaba’s B2C portal TMall, will focus on
structured categories and brand-authorized stores with focus on
electronics, fashion brands and FMCG categories. It aims to offer
a combination of the mall and bazaar concepts to consumers.
Link used — tech.economictimes.indiatimes.com/news/internet/
paytm-debuts-paytm-mall-a-dedicated-app-website-for-
marketplace-business/57368295 Link accessed on – 1 March,
2017
The retailer | 21
22 | The retailer
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The retailer | 23
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