Information Technology and Indian Apparel Retail

India being one of the new emerging economies has opened it's gateway to a host of new products and brands. Many businesses are now targeting the Indian population as their new market and potential customers. The retail segment is booming and the Indian consumer is now looking beyond the store at the corner of its street. With global as well as Domestic retailers compete to capture the Indian market, Strategies are being evolved and deployed tailored for the Indian market. Yet however, for numerous reasons, the domestic retailers fail to comprehend the need of Information Technology (IT) in their supply chain whereas, global retailers are spending a considerable amount of their revenues in deploying more IT based solutions. Indian retailers are more focused in increasing their sales by providing a competitive price compared to their counterparts, where the global retail mind is strongly focused on making their business more agile. In fact, the focus of the industries is so impressive that they are the new preferred customers of many Supply Chain solution providers.

So what keeps us as Indian retailers from investing into IT solutions? Stating the obvious - The investment involved. Any quality service provider has premium rates. The lesser ones in the category aren't reliable enough to deliver complex solutions usually associated with Supply Chain Management (SCM). Licenses of SCM engines don't come cheap and that's not all. There's a non-trivial cost involved such as the consulting, Deployment and maintenance of complex solutions.

Quite of the failure of IT in the domestic market can be attributed to the way the economy is driven locally. Organizations have yet to evolve to a system where the demand is first created and then fulfilled (pull Based System). The biggest names in domestic retailers are still buying the grey Stocks in order to reduce the buy price because for them their only USP being a competitive price. This way they end up competing among themselves. Global retailers on the other hand are striving towards adding more value to their supply chain and making their business more agile. IT solutions like Decision Support Systems (DSS), Enterprise Resource Planning (ERP) and e-commerce gives higher visibility into their supply chain. They get better managed inventories, more accurate demand forecasting and fulfillment. They work towards optimizing retail cycle and reducing cycle time. They continue to provide premium content to the customers and survive the competition from the Domestic market.

Another big one is the executive and the middle management level mental roadblock and lack of faith in IT. This mentality can also be attributed to the lack of awareness and knowledge of them in the IT itself. In case of Developed Economies, the IT and automation is omnipresent to the level that people even don't notice them around. Compared to societies where people order food online, we are in a phase where many of us still rely on Cheques and pass books when facilities like ATMs are available to us. Even though organizations in India have accepted automation and IT, it is poorly implemented and loosely coupled. Many Formidable manufacturers and Retailers have ERP available and yet they use it for purposes which probably can be taken care by some neatly designed spreadsheets and simple databases. CRM solutions are being implemented but then are not vertically integrated. Hardly Indian retails have an e-commerce website.

Like there's a dawn to every night, both the retailers as well as solution providers are waking up to the new realization. SCM Product companies are working towards a better pricing model for Indian market like Subscription based and On-Demand Solutions. Few of the retailers already have started looking in this direction and though with difficulty, started shelling out hard earned bucks. Maybe, this is the first sign of the changing winds.