A Report On

Productivity in Retail Industry in India

Submitted By Loony and Partner

The Indian Retail Scene
Organized Retailing and Kirana Shops
India's retail sector is going to transform and with a three-year compounded annual growth rate of 46.64 per cent, retail sector is the fastest growing sector in the Indian economy. Traditional markets are transforming themselves in new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and near metro cities, introducing the Indian consumer to a new shopping experience. KSA-Technopak, a retail consulting and research agency, predicts that by 2010, organized retailing in India will cross the US$ 21.5-billion mark from the current size of US$ 7.5 billion. The Indian retail market is of enormous size about US$ 350 billion. But organized retail is not so huge and it is at only US$ 8 billion. However, the opportunity for growth is huge —by 2010, organized retail is expected to grow to US$ 22 billion. With the growth of organized retailing estimated at 40 per cent over the next few years, Indian retailing is clearly at a tipping point. This report attempts to analyse the areas where retail sector is growing and will grow, what will be the target market segment for the retailers and how will they try to serve this segment.

India is witnessing an unprecedented consumption boom. The economy is growing between 8 to 10 percent and the resulting improvements in income dynamics along with factors like favorable demographics and spending patterns are driving the consumption demand. Indian Retail Industry is ranked among the ten largest retail markets in the world. The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have transformed the face of Retailing in India. The Indian retail industry is currently estimated to be a US$ 200 billion industry and organized Retailing comprises of 3 per cent (or) US$6.4 Billion of the retail industry. With a growth over 20 percent per annum over the last 5 years, organized retailing is projected to reach US$ 23 Billion by 2010. The Indian retail industry though predominantly fragmented through the owner -run " Mom and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International. In the last few years, Indians have gone through a dramatic transformation in lifestyle by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste. Modern retailing satisfies rising demand for such goods and services with many players entering the bandwagon in an attempt to tap greater opportunities. According to the report of American Management Consulting Firm A. T. Kearney's 2006 Global Retail Development Index (GRDI), India is on the first position , continuing for

two years (2005 and 2006), among 30 countries as the world's most attractive market for mass merchant and food retailers seeking overseas growth. On the other hand, China is loosing its attractiveness and making the way to India GRDI helps retailers to prioritize their global development strategies by ranking emerging countries based on a set of 25 variables including economic and political risk, retail market alternatives, retail saturation level, and the difference between gross domestic product growth and retail growth. The study quotes: "The Indian retail market is gradually but surely opening up, while China's market becomes increasingly saturated."

The Growth Drivers
The Indian Retail growth can be attributed to the several factors including * Demography Dynamics: Approximately 60 per cent of Indian population below 30 years of age. * Double Incomes: Increasing instances of Double Incomes in most families coupled with the rise in spending power. * Plastic Revolution: Increasing use of credit cards for categories relating to Apparel, Consumer Durable Goods, Food and Grocery etc. * Urbanization: increased urbanization has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale. Investment Opportunities * Potential for Investment: The total estimated Investment Opportunity in the retail sector is around US$ 5-6 Billion in the Next five years. * Location: with modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5 years. * Sectors with High Growth Potential: Certain segments that promise a high growth are o Food and Grocery (91 per cent)o Clothing (55 per cent)o Furniture and Fixtures (27 per cent)o Pharmacy (27 per cent) o Durables, Footwear & Leather, Watch & Jewellery (18 per cent). * Fastest Growing Formats: Some of the formats that offer good growth potential are: o Specialty and Super Market (45 per cent) o Hyper Market (36 per cent)o Discount stores (27 per cent)o Department Stores (18 per cent)o Convenience Stores and E-Retailing (9 per cent) * Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain and Logistics. * Rural Retail: Retail sector offers opportunities for exploration and investment in rural areas, with Corporates and Entrepreneurs having made a foray in the past. India's largely rural population has caught the eye of retailers looking for new areas of growth . ITC launched the country's first rural mall 'Chaupal Sagar', offering a diverse product ranges from FMCG to electronics appliance to automobiles, attempting to provide farmers a

one-stop destination for all of their needs. There has been yet another initiative by the DCM Sriram Group called the 'Hariyali Bazaar', that has initially started off by providing farm related inputs and services but plans to introduce the complete shopping basket in due course. Other corporate bodies include Escorts and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in order to tap the vast rural market. * Wholesale Trading: wholesale trading also holds huge potential for growth. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who do not have to maintain relationships with multiple suppliers for all their needs. * Cheap Consumer Credit

Major Formats of In-Store Retailing
Format Description The Value Proposition Branded Stores Exclusive showrooms either owned or franchised out by a manufacturer. Complete range available for a given brand, certified product quality Specialty Stores Focus on a specific consumer need, carry most of the brands available Greater choice to the consumer, comparison between brands is possible Department Stores Large stores having a wide variety of products, organized into different departments such as clothing, house wares, furniture, appliances, toys, etc. One stop shop catering to varied/ consumer needs. Supermarkets Extremely large self-service retail outlets One stop shop catering to varied consumer needs Discount Stores Stores offering discounts on the retail price through selling high volumes and reaping economies of scale Low Prices Hyper- mart Larger than a supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city Low prices, vast choice available including services such as cafeterias. Convenience stores Small self-service formats located in crowded urban areas. Convenient location and extended operating hours. Shopping Malls An enclosure having different formats of in-store retailers, all under one roof.

Variety of shops available to each other. Indian Retail- expanding the number of formats In modern retailing, a key strategic choice is the format. Innovation in formats can provide an edge to retailers. Organized retailers in India are trying a variety of formats, ranging from discount stores to supermarkets to hypermarkets to specialty chains.

Formats Adopted by Key Players in India
Retailer Original formats Later Formats RPG Retail Supermarket (Foodworld) Hypermarket (Spencer's)Specialty Store (Health and Glow) Piramal's Department Store (Piramyd Megastore) Discount Store (TruMart) Pantaloon Retail Small format outlets (Shoppe) Department Store (Pantaloon) Supermarket (Food Bazaar) Hypermarket (Big Bazaar) Mall (Central) K Raheja Group Department Store (shopper's stop)Specialty Store (Crossword) Supermarket (TBA) Hypermarket (TBA) Tata/ Trent Department Store (Westside) Hypermarket (Star India Bazaar) Landmark Group Department Store (Lifestyle) Hypermarket (TBA) Others Discount Store (Subhiksha, Margin Free, Apna Bazaar), Supermarket (Nilgiri's), Specialty Electronics Road Ahead; Plans of Large Retailers * Reliance Retail: investing Rs. 30,000 crore ($6.67 billion) in setting up multiple retail formats with expected sales of Rs. 90,000 crore plus ($20 billion) by 2009-10. * Pantaloon Retail: Will occupy 10 mn sq.ft retail space and achieve Rs.9,000 crore-plus ($2 bn) sales by 2008.* RPG: Planning IPO will have 450-plus Music World, 50-plus Spencer's Hyper covering 4 mn sq.ft by 2010. * LIFESTYLE: Investing Rs.400 crore-plus ($90 mn) in next five years on Max Hypermarkets & value retail stores, home and lifestyle centres. * Raheja's: Operates Shoppers' Stop, Crossword, Inorbit Mall, and 'Home Stop' formats. Will operate 55 "Hypercity" hypermarkets with US$100 million sales across India by 2015.* Piramyd Retail: Aiming to occupy 1.75 million sq.ft retail space through 150 stores in next five years.* TATA (Trent Ltd.): Trent to open 27 more stores across its retail formats adding 1 mn sq.ft of space in the next 12 DLF malls. Titan industries to add 50-plus Titan and Tanishq stores in 2006.

Small is big for Indian retail

It's raining malls in small-town India. Whether it's Kanpur, Ahmedabad, Indore, Agra, Baroda or Surat, the mall and multiplex culture has caught on in the country's smaller cities, powered by the burgeoning purchasing power of India's middle-class. From a handful of malls in the mid '90s, India today has nearly 200 malls spread across large and small cities. And 700 new malls are coming up all over India-40% of them concentrated in the smaller cities. Small-town India is the next big thing in the retail business. Consider these numbers: in 2005, the contribution of smaller cities to total organized retailing sales was 15%. By the end of this year, that proportion is expected to grow to 25%. Organized retailing in smalltown India is growing at a staggering 50-60% a year compared to 35%-40% in the large cities. The striking point is that it is the big names in the organized retail business that are eyeing these new opportunities. The Kishore Biyani-owned Future Group, India's largest retailer, plans to invest Rs 3,600 crore in 100 stores in 30 cities, increasing its retail space from 3.5 million square feet to 30 million sq feet. The RPG group plans to open malls in all cities with a population of over 8 lakh. Similarly, Wills Lifestyle, the garments and accessories retailing division of ITC Ltd, plans to increase its footprint by doubling the number of stores from 50 to around 100 in the next two to three years, mostly in smaller cities. Even Sunil Mittal's Bharti group has announced plans to get into food and farm products retailing. All these plans, however, are dwarfed by Mukesh Ambani's ambitions to do a Wal-Mart in India by investing $5.60 billion (Rs 25,000 crore) and covering 1,500 cities and towns. The small-town retail boom could be considered a show-case of India's free-market prosperity. It is being powered by healthy economic growth that is making more Indians more prosperous. Organised retailers have understood this and are hoping to ride the wave, exploit the first-mover advantage and establish strong brand loyalties in these relatively under-served markets. Indeed, this is probably the most compelling example of the trickle-down impact of liberalisation in India. Looking ahead, retail analysts suggest that the sustained success of the IT and ITeS industries in small towns is expected to create more jobs and enhance spending power. Typically, small cities offer a 15% to 30% cost advantage over larger cities, not just in terms of employee costs but real estate costs as well, not to speak of the gains that accrue from reduced staff attrition rates. This gap is expected to widen over the next few years, creating a pull for smaller towns that will, in turn, power the small-town retail revolution. At present, real estate costs present a major incentive for India's organized retailers. Average rental values for ground-floor space are Rs 50-60 per square foot a month, against Rs 100-120 per sq foot a month in the bigger cities. However, a strong demand for retail space has more than doubled rentals in cities like Jaipur, Chandigarh, Surat and Lucknow. While in the metros, retailers are filling gaps by increasing more stores, in small towns, these malls are way beyond the expectations of the consumers. These cities are untapped markets and retailers find it important to establish their brands there. Most smaller cities are seeing plenty of action. For instance, Ludhiana can already boast worldwide restaurant chains like KFC, McDonald's, Pizza Hut, Domino's Pizza, Ruby Tuesday and Subway. A new world-class, 25-acre commercial centre and some seven new

shopping malls-cum-entertainment centres are under construction. The Indian retail market is estimated at $350 billion. But organized retail is estimated at only $8 billion. However, the opportunity is huge—by 2010, organized retail is expected to grow to $22 billion. With the growth of organized retailing estimated at 40% (CAGR) over the next few years, Indian retailing is clearly at a tipping point. India is currently the ninth largest retail market in the world. It is names like Dehradun, Vijayawada, Lucknow and Nasik that will power India up the rankings soon. Small Local Stores / Kiranas The small local stores have dominated Indian retailing over the decades and are present in every village and local community, addressing the needs of the population in the area and being the point of contact with the consumer. The distribution networks of brands extend right upto this point to stay in touch with customer needs and preferences. India like most other countries has a very large network of local stores. The retail industry in rural India has typically two forms: "Haats" and "Melas". You will find these in almost every village and locality. A lot of them function as paan and cigarette outlets with tea and coffee sometimes also offered. Besides this these stores stock and offer small eats and soft drinks including biscuits, soft drinks, chocolate, sweets, bread and baked products. Many of them also sell fruits like bananas and a range of toiletries and cosmetics like soaps, shampoos, toothpastes and some creams. These small stores cater to the needs of their own local population and travelers who stop by for a smoke or a snack. A little larger format is the neighborhood grocery store that focuses on grains, foods, snacks and toiletries besides other home essentials. Fruits and vegetables that are perishable are usually maintained and offered by exclusive vegetable stores and not by the normal groceries. Every fair sized village is likely to have at least one grocery store, a fruit and vegetable shop and a paan and cigarette shop. The new addition of the past decade is to have a telephone booth that lets locals and travelers make national and international telephone calls. This network is very large and spread all across India. It is not really a network since each store is individual or family owned and has no connection with the other. It does however represent a network since large consumer product companies like Unilever, Procter & Gamble, Colgate-Palmolive, Cadbury, Coca Cola, Pepsi and ITC uses them as their final point of retail to the consumer. While it is commonly believed that the new retail chains will drive these small stores out of business, reality points the other way and it is likely that these stores will continue even in the next two decades of growth. These small stores are very personal and have strong relationships with the local population. They are points of news and connection. They offer credit to the local population and help out in times of crisis. They also have a very good understanding of requirements of the local population and have very low overheads enabling them to offer the best price for their products. Shopping Malls The new shopping malls that have been expanding their footprint across Indian cities are well designed, built on international formats of retailing and integrated with entertainment and restaurants to provide a complete family experience. Over 300 malls are expected to be built over the next two years and most Indian cities with over a million population will be exposed to this modern method of retailing. Shopping malls have existed in India since several decades but were designed and built to house several shops in a single facility. These malls also known as Shopping Arcades

offered only rows of shops, most of which were small stores that promised bargains for their various wares. These Shopping Arcades tried to maximize on their store space and did not offer any areas for recreation and entertainment. The present day malls are a creation of the past few years post 2000. They are designed professionally using a lot of international experience and combine shopping with a lot of brand building, recreation, food and entertainment. Malls also have a large format store that serves as their anchor for shopping and a prominent restaurant that anchors the food needs of visitors. Most malls also feature a multiplex cinema that offers entertainment to the visitors of the mall. Finally the mall has large atria and open spaces to allow visitors and families to hang-out. These new format malls are coming up in all the major cities of India. The cities that are seeing the first rush of malls are New Delhi, Noida, Gurgaon, Chandigarh, Mumbai, Pune, Bangalore, Ahmedabad, Chennai, Kochi, Hyderabad, Kolkata The next run-up of the malls will be the second level cities of India that includesVisakhapatnam, Coimbatore, Trivandrum, Raipur, Bhopal, Surat, Jaipur, Kanpur, Lucknow, Ranchi, Cuttack, Dehra Dun. The new malls are air-conditioned and have spacious areas and accesses which make them a true breath of fresh-air from the earlier arcades and shop line streets that used to be the available options for Indian customers.

Malls: The new face of retail market
Robust GDP growth, stronger currency reserves and ever-improving market and operating environments are propelling the Indian market through a period of stellar growth - and the retail community is responding with newer formats and innovative products. The economy of India has shown a remarkable increase driven by overall political and social stability. The decade-old economic reforms have engendered a new, shop-till-you-drop breed of middle class Indians who, having tasted the shopping experience of big cities overseas, have fuelled a demand that was inevitable -- the rise of the shopping malls. Centrally airconditioned malls with piped music, high-speed lifts and escalators, underground parking space, a multiplex movie theater, multi-cuisine restaurants and a host of national and international brands, these malls generates approximately 25,000 footfalls each, per day, with figures doubling on weekends. Sobha Group has set its eyes on launching the largest retail mall in the country. Retail Biz tracks this unprecedented move that is ready to add a new chapter in the history of Indian retailing.It is estimated that there are 450 malls in various stages of development across India, 60 in the greater Delhi area alone. This trend has attracted several major global retail players to India. International style shopping has finally come to India - and with a splash.

Productivity in retail industry in India
Below given is the retail trade figures in India for the corresponding years : Retail Trade 2005 2006 2007 2008 2009 2010 Retail Sales 15,409 17,360 19,465 21,715 24,215 27,107 (Rs Bn) Retail sales 349.4 385.8 421.3 467.0 516.3 564.7 (Us $bn) Retail Sales volume 6.0 7.5 7.7 6.9 6.8 7.3 growth (%) Retail sales US$ Value 13.6 10.4 9.2 10.8 10.6 9.4 growth (%)

The trends that are driving the growth of retail sector in India are:
• • • •

Low share of organized retailing Falling real estate prices Increase in disposable income and customer aspiration Increase in expenditure for luxury items

INDIA RETAIL: 2006 (at current prices)
India Organised % Retail Retail Organised Value (Rs.Crore) in 2006 (Rs.Crore) 113,500 60,200 3,950 13,750 3,800 42,200 48,100 21,400 1,680 1,800 5,200 400 1,100 5,000 18.9 2.8 45.6 37.8 10.6 2.6 10.4

Retail Segments Clothing, Textiles & Fashion Accessories Jewellery Watches Footwear Health & Beauty care services Pharmaceuticals Consumer Durables, Home

Appliances/equipments Mobile handsets. Accessories & Services Furnishings, Utensils, Furniture-Home & Office Food & Grocery Catering Services (F & B) Books, Music & Gifts Entertainment

21,650 40,650 743,900 57,000

1,740 3,700 5,800 3,940

8.0 9.1 0.8 6.9 12.6 4.1

13,300 1,680 38,000 1,560 US$ 270 US$ 12.4 Billion Billion

Quick Stats of Indian Retail
• • • • • • • • •

Market size (total) 2006: US$ 300 bn/annum Market size (total) 2010: US$ 427 bn/annum Market size (total) 2015: US$ 637 bn/annum Market size (modern retail) 2006: US$ 9-12 bn/annum Market size (modern retail) 2011: US$ 60 bn/annum Annual rate of growth (modern retail): 35% Penetration (modern retail) 2006: 3 to 4% Penetration (modern retail) 2010: 10% Number of retail outlets (total): 12 million

Investment New Investment by 2011: US$ 30 bn Employment
• •

No. of persons employed (total): 21 mn No. of new jobs in next two years: 2 mn.

Wealth No. of dollar designated millionaires in India(2006) 100,015 Retail Space

• • • • • •

Typical space per outlet: 100 to 500 sq.ft. Space occupied (modern retail): 35 mn sq.ft. Operating Malls 2007: 114 (35 mn sq.ft.) New Malls under construction: 361 (117 mn sq.ft.) New space distribution: 65% (top 7 cities), 35% (tier II & III cities) New space distribution (among top 7 cities): NCR 34%, Mumbai 23%, Rest 43%

Labor Productivity Growth Improves Worldwide
Worldwide labor productivity growth is improving, despite political and economic crises in Asia and Russia, and significant economic slowdowns in Europe, according to a report by The Conference Board. Global labor productivity growth was 1.8% for the 1995-2002 period, up from only 1% in the first half of the 1990s. But the rest of the world’s productivity level relative to the U.S. is just 21%. This translates into per capita income amounting to only just 19% of the U.S. level. The Conference Board report is based on a comprehensive and regularly updated statistical database that now covers 97 countries. It includes more than 20 years of economic performance, revealing both productivity levels (GDP per employee for all countries and GDP per hour for 36 more developed economies) and growth rates of GDP, labor input and productivity. The report also measures average per capita income and explains why, despite comparable levels of productivity, many countries are still far behind the U.S. on this key measure of economic strength and prosperity.

Asia leads the world in labor productivity growth at 3.4% between 1990 and 2002. East Asia has rebounded strongly from its 1997-1998 crisis, registering solid 3.6% productivity growth since 1998. China continues to be a worldwide leader in labor productivity growth, at 6.5% annually. India leads South Asia with 3.4% productivity growth between 1995 and 2002. Japan experienced a significant acceleration in per hour labor productivity growth in 2003, increasing from 1.8% in 2002 to 2.9% in 2003. In addition, its labor-input growth was positive for the first time in 3 years. Even Africa has returned to positive productivity growth, with improvements in almost all countries since 1995. But it still lags significantly behind most regions at 0.9%. Productivity growth in the Middle East has also been very slow – just 0.8% between 1995 and 2002. “Gains in East Asia and the Pacific, which account for 42% of world employment, and South Asia, with 18% of world employment, are critical to future productivity advances,”

says Robert McGuckin, Director of Economic Research at The Conference Board and coauthor of the report with Bart van Ark, Consulting Director for The Conference Board’s International Economic Research. Critical areas to watch for significant improvement in living standards are China, which has 28% of all the world’s jobs, and India (15%). Both China and India have shown very strong productivity growth, with China’s at over 6%, driven by massive restructuring and privatization. India’s productivity is growing at 3.5%, spurred by reforms that have opened up competition and increased foreign investment. The gains in productivity were mirrored in the 10 new European Union members that have also been privatizing inefficient government enterprises at a rapid rate. “China and India will have to continue the reform process, since their productivity levels are only 14% and 9% of the U.S. productivity levels,” concludes McGuckin. “Per capita incomes aren’t likely to rise without stronger productivity growth in these areas.”

Retail Hardware: An important aspect of Productivity
Technology and innovation seem to be the only saviours for the highly competitive Indian retail industry as it now faces up to global competition. By Varun Aggarwal The Indian organised retail segment is seeing companies like Globus, Pantaloon and Reliance gearing up to fend off the challenge of foreign players who are poised to enter the Indian market. However, it is not going to be that easy for Indian retailers to handle the competition. Indian companies need a sound infrastructure something that foreign companies already possess. Today, a shopper needs much more than just a wide range of products. He needs convenience and quick cash-out all at a competitive price. Technology plays an important role in overcoming such hurdles. Cost savings through technology can help garner a competitive price for a retail vendor. At the point of sale Instead of a PC or cash register, a growing number of Point of Sale (POS) solutions take advantage of a colour touch screen at the sales counter. Many POS systems connect to instore computers that, in turn, link to computers at the company’s headquarters. With welldesigned software, touch screens can provide a simple, easy-to-use mechanism for cashiers to handle just about any transaction—reducing training time while improving productivity and customer service. Touch screens are popular in the hospitality and convenience store industries and are rapidly gaining acceptance in other retail markets. Some businesses choose to combine other options with a touch screen POS. For example, full motion video and integrated stereo speakers (or optional headphones) provide a

multi-media platform that allows these workstations to do double duty as Web- or computer-based training during non-business hours. Add a swivel base and your associates will be able to use a workstation to review services or products with customers.

RETAIL SOLUTIONS FROM CISCO Cisco retail solutions have four modules, each designed to meet specific needs in the retail environment: Store Connectivity Increases operating efficiency across stores using wide-area networks (WANs) and virtual private networks (VPNs) to access corporate and store information, including radio-frequency identification (RFID)-based inventory management and standard retail applications Uses wireless technologies at the point of sale for faster checkout and real-time product information, in the store to improve operations, and throughout the supply chain to reduce costs Reduces retail costs through converging data and voice systems, providing instant communication throughout stores and with enterprise applications and resources Supports employee training and productivity and maximizes customer satisfaction with in-store broadcasting, multichannel shopping, and digital signage, as well as revenue-boosting smart technologies and information kiosks

Store Mobility

IP Communications

The Store as a Medium

Bar code scanners enable you to collect detailed data regarding products that your customers purchase—information that is useful for inventory management,

merchandising and marketing decisions. Successful retailers use this information in data warehousing applications to fine-tune store assortments and help assure that consumers find the products that they want on the shelves, when they shop. A quality scanner that reads bar codes on the first try will speed checkout and lead to cashiers who are more comfortable and less frustrated. A pleasant cashier will transfer this positive energy to customers. On the customer side of the counter, most POS workstations are available with a choice of customer displays, ranging from simple one- or two-line read-outs to full colour screens that display Web-based colour graphics. The latter devices allow your customers to learn more about your store, merchandise, or special promotions while they view details of their transaction. Electronic payment peripherals enable you to readily and efficiently handle credit and debit card transactions. Among these are terminals that not only process electronic payment but also capture signatures electronically. A signature capture terminal incorporates a credit/debit card reader, provides means to enter a PIN number, and includes a display for other customer input (e.g. for market surveys) and graphics-based advertising. Retail POS printers, especially thermal printers, deliver fast, quiet printing of receipts and paper forms at the point of service. A quality thermal printer can have a positive impact on store productivity through intelligent design and operator-friendly features. Because of their speed, thermal printers can produce a record of most transactions in a fraction of a second. This makes it possible to add information and graphics, such as a company’s logo, to the customer receipt, or to print multiple receipts for credit authorisation or for coupons, rebate offers or gift receipts, without adding to the transaction time. ENDPOINT SECURITY AT RETAIL Gateway anti-virus Detects and eliminates viruses, worms and spyware in real time. It scans incoming and outgoing email attachments, FTP, and HTTP traffic. Firewall It inspects content in network packets to ensure that unauthorised traffic does not pass into or out of the intranet. With adequate performance, a firewall can be deployed in-line for real-time protection.

Intrusion Detection Stops attacks at network perimeter by and Prevention analyzing traffic for worms, viruses and other hazards. Analysis techniques

include behaviour-based learning and heuristics in addition to signatures defining known hazards. VPN Enables secure communications tunnels across the public Internet between computing devices. With adequate performance, a VPN can authenticate users, encrypt data and manage sessions. It stops junk e-mail in its tracks. Optimises or guarantees network performance with packet classification, queue disciplines, policies, congestion management, quality of service, and fairness techniques. It improves latency, service availability and bandwidth utilisation for cost efficient, high performance networking.

Anti-spam Traffic Shaping

Web-based Content It processes Web content to block Filtering inappropriate material and malicious scripts from Java Applet, Cookies and ActiveX scripts entering the intranet.

Networking and Security With standalone networking systems, retailers run the risk of not getting information quickly enough. Problems such lack of visibility into inventory, weaker relationships with partners, poor forecasting, lost sales opportunities, or inconsistent customer service can materialise. Globus understood this and implemented VPN. According to Meheriar Patel, DGM & Head IT, Globus stores Pvt Limited, “We are using LAN and WAN setup connected by MPLS, VPN. All our stores are connected through RF VPN.” Many retailers lack instant lines of communication between workers, customers, managers, vendor partners, and stores. This shortage of real-time information exchange often compromises service, inventory, policy changes, and management decision making. A solution that maximises responsiveness by offering full networking of data, voice, and video communications is essential. This can include mobile communications, providing information access to workers at every level, from stockroom to store to executive offices.

Retailers still often rely on older processes that increase operational costs and lower productivity, such as outdated point-of-sale systems and technologies, ineffective employee-management and training practices, or outdated inventory-management and partner policies. The hurdles can be overcome using products from vendors such as Cisco that improve store operations and productivity with offerings in mobile and telephony communications, collaborative technologies, in-store broadcasting and training, and integration with inventory-management and supply-chain applications. Many retailers have set up data centres. Raymond has a data centre at Thane at its HO. According to Anil Arora, Sr. Manager, IT, Raymond Limited, “The stores are not interconnected but they are connected through a bulletin board which is a collaboration Web site, where the stores exchange information.” The company also has a DR site to ensure business continuity. This site is also located at the HO. Though security solutions such as IP surveillance and automation remain a pipedream, most retailers take other measures to ensure a secure network. For instance, Globus uses a SonicWALL 4060 UTM box, which works as a firewall, content filter device, gateway antivirus, IPSec VPN appliance, spam filter, Intrusion prevention system, antispyware etc. Pantaloon on the other hand chose to deploy Fortinet’s FG500A after an intensive evaluation process. “The device allows unified capabilities and is easy to manage and monitor. It is used at the perimeter,” said Vishak Raman, Country Manager India, Fortinet.

RFID for inventory control In the retail industry, RFID assists in inventory control. All stocked items in a retail outlet sport an inexpensive read-only tag that stores the product code and its description, including the manufacturer, brand, batch number, expiry date and price. The shelves, exit gates and warehouses are fitted with a small antenna that senses the RFID tag and reads the information on it to update the inventory system in real-time. The benefits of such a system are that it provides for total asset visibility, full inventory history with tracking and reduced inventory-stocking levels that facilitate just-in-time deliveries. It also ensures better process control for products in the facility, reduced shelf space and leadtime that shorten across docking time, higher-level security, fewer errors and better visibility of goods. In warehouses and container depots, pallets and containers are marked with read-write RFID chips that contain details of origin, destination and other material details. Entry and exit gates, vehicles and cranes are fitted with an antenna that senses the RFID tags and records and updates the system to check for any deviation in the schedule. With precise tracking of the location of pallets and containers within the warehouse, it is easy to pinpoint unscheduled movements. The system also considerably helps reduce costs and time for check in and check out.

While Globus has already begun testing RFID, Madura Garments has implemented the technology at its newly opened retail store, Planet Fashion in Bangalore. RFID tags help automate dispatches from one factory and inventory at the warehouse. Pantaloon Retail (India) has piloted an RFID project at one its warehouses in Tarapur using a thousand RFID tags. The company is starting by implementing the technology at its warehouse. It has selected a few lines of apparel, primarily shirts and trousers, for the RFID pilot. The RFID application developed by Wipro Infotech fits to the overall solution in line with Pantaloon’s business processes and IT landscape (from the factory outward to the warehouse inward and from the warehouse outward) in order to capture real-time data. The application integrates with Oracle database 10g and middleware along with an implementation of the RFID hardware. It integrates with the existing IT infrastructure, the in-house developed Retail Enterprise Manager. The primary objectives are a smoother product lifecycle and item-level tagging for identification. The pilot was also an opportunity to do a feasibility study regarding additional uses for RFID.

Other technologies An interesting technology deployed at HyperCITY is the I-Scan (Symbol TechnologiesNew York) that allows the customer to scan merchandise as they pick products off-theshelf, thus saving them significant amount of shopping time. Once he finishes shopping, the customer can hand the device over to the customer service desk and cash-out quickly. The I-Scan hardware supports applications such as inventory scanning, price check, selfcheck, self-check-out PoS and warehousing receiving. IP surveillance is picking up steam. With IP cameras going for as low as Rs 7,000, the technology is ripe for deployment. CIOs can use it to monitor remote locations over a LAN or the Internet. R Mall uses D-Link’s IP surveillance cameras. D-Link has two more advanced IP based Video Surveillance Cameras from their SecuriCam range, the DCS6620 and DCS-6620G (Wireless) with 10X Optical Zoom. The cameras feature dual Codec support, a 10X optical zoom lens, built-in microphone and low-light sensitivity for nighttime surveillance.

The productivity in retail depends on various factors such as * Demography Dynamics, Double Incomes, Plastic Revolution, Urbanization, Potential for Investment, Location, Sectors with High Growth Potential, Fastest Growing Formats, Supply Chain Infrastructure, Rural Retail, Wholesale Trading, Cheap Consumer Credit, retail hardware and technology.