Getting
hi-tech
As
the food retail market changes with increased demand and newer entrants,
its time for technology to step in and take control, says Sidharth Kaushal,
Seacom
The
food-retailing segment in India is in a state of rapid change. The labour
pool is shrinking and, at the same time, consumers are demanding value
for money and efficient service. Threats abound from competitors such
as mass merchants, restaurants and e-retailing. Supermarkets are spearheading
the changes in food retailing. Retailers like Giant and FoodWorld depend
upon efficient supply chain management of inputs to ensure that goods
reach the stores in proper condition and on time. Some of the key challenges
in the food retail sector are:
Cluttering of market space
Pantaloon, RPG and Shoppers’ Stop have ambitious
plans to exploit the potential of the organised food-retailing sector
in India. The RPG group has already started two hypermarkets under the
brand name Giant in Hyderabad and Mumbai; Pantaloon has introduced Food
Bazaar. Other players have also set up similar formats. The cluttering
of the market space has resulted in shrinkage of catchments area and
profit per sq ft for larger retailers. Apart from that, bigger industrial
houses like Reliance, Munjals and ITC are also closely watching the
developments taking place in this segment.
The changing consumer
Most of the consumers today are conscious of price,
yet are desirous of high levels of service. Retailers need to devise
strategies that meet these needs.
Shrinking labour pool
In today’s economy, the labour pool available
for low-skilled jobs traditionally offered by food retailers is shrinking.
Most stores are unable to maintain a full staff, and the turnover is
constant.
Unorganised farmers
In India, farmers are largely illiterate and fragmented.
As a result, the procurement of farm produce becomes an uphill task.
Distributed chains
There is high wastage through the supply chain in
India due to a lack of proper infrastructure facilities and support.
Keeping these in mind, the survival and growth strategies employed by
retailers are:
• Low cost distribution
• Low price points
• Extraordinary customer service
• Consumer responsiveness
• Time-valued retailing.
Role of technology to meet challenges in food
retailing
One of the common challenges faced
by retailers is the lack of proper IT support systems to ensure that
the processes are implemented effectively. Retailers are increasingly
demanding and recognising the importance of a wireless system to seamlessly
integrate the various units of the value chain. The more successful
retailers today are continually revamping their strategies to meet the
increasing challenges. This revamping has been made possible by re-engineering
through technology, rather than simply automating the current systems.
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