India’s retail industry is booming. According to the India Brand Equity Foundation, the retail market is expected to grow to $1200 Billion by 2021 from $672 Billion in 2017. Part of the reason behind this spurt is the easing of regulatory terms in the country, which has led to a surge in the amount of foreign direct investments. Most notably, the American retail giant Walmart acquired a controlling 77% stake in home-grown e-tailer Flipkart in May 2018, making its intentions clear: it wants a share of the growing pie that is the Indian consumer’s income: consumer spending is projected to cross $350 billion next year despite the slowdown that the Indian economy is going through today.
These are, therefore, exciting times ahead for retailers, albeit with considerable uncertainty in the environment. To be able to capitalize on this opportunity companies must have efficient implementation processes for their plans. The status quo involves the use of manual processes, which is an extremely inefficient approach to business. Sub-optimal planning processes plague the company with issues like poor full-price sell-through, high markdowns, and unsold inventory, among others. To avoid them, companies must switch to a more automated process with the help of technology.
India is diverse
It is a well-known fact that India is among the most diverse countries in the world. While this must be celebrated, it also makes retail planning uniquely different for companies selling to the Indian consumer. In India, each demographic sub-region functions as its market because of the distinct tastes and preferences of buyers across regions, partly a result of cultural diversity.
The Indian market has multiple customer segments across the country that retailers must keep in mind while making their plans. A company dealing with markets pan-India, therefore, has to make a lot more considerations than its counterpart dealing with the relatively homogeneous markets in the western world.
A result of this diversity is that the assortments and size packs sent to different parts of the country are completely different, which means that the process demands a lot more attention and care. Companies in India selling to the entire sub-continent must, therefore, plan at a much deeper level to cater to the requirements of the various regions. Given that the retail market in the country is growing at a record rate, there is a need for companies’ plans to be rolled out much quicker without compromising on accuracy. This becomes a challenge if their planning processes are manual.
The rise of online fashion retail
There was a time when the Indian corporate community was sceptical about the suitability of the online-only channel for fashion retail industry because the common rebuttal was the belief that when it came to fashion and apparel, buyers would only pay for clothes once they had tried them on and had a feel of the clothing.
However, it is now proven that the online model works: there are multiple examples of this success in the market. However, there is an interesting development to this story – after tasting success in the online channels, these companies are pushing for getting an offline presence as well. This has forced the traditionally offline retailers to establish their online presence. Retailers are now facing competition on both channels.
This has led to the conundrum of finding the right retail model. Earlier conceptions are being challenged with the rise of the online marketplace. Both new entrants and established players are feeling the need to rework their approach to selling to the consumer, and are re-discovering the retail models that might work for them.
Consumer expectation
It is no secret that the value-conscious Indian consumer is sensitive to price, which leaves very razor-thin margins for retailers selling in the country. There is very little room for shrinkage in their supply chains. Add to this the practice of deep-discounting by the major e-Commerce players, especially in the festive season like the one going on right now, and you have companies in a major fix. They risk losing business by not cutting prices but risk running out of business if they try to undercut the big players.
Moreover, the penetration of internet connectivity in India has surged, with more than 566 million users in 2018, and expected to cross 620 million users by this year-end. A consequence of this increased connectivity is that any trend elsewhere the world is no longer ‘foreign’ to the Indian customer. This, along with the complex demography of the country, make it even more challenging to meet the consumer demand because of the diverse tastes.
Retailers also have to act fast to take advantage of these unforeseen opportunities since many of these turn out to be fads, and therefore are short-lived. Taking time to bring these products to the market is simply not an option. Companies, therefore, need to park some funds as contingency reserves in case any such trend surfaces. These three factors – price sensitivity of the consumer, stiff competition, and the need for making express purchases – make retail planning extremely challenging. The only way out of this quandary is making the push towards making supply chains leaner: pruning the seemingly unnecessary costs.
Today, companies are trying to see if they can optimize their supply chain processes and help the bottom-line of the company. The need is to develop robust and effective plans that keep the company ready to face many situations.
Retail companies have to make their plans keeping all these challenges in mind, which is not an easy task to accomplish with the existing processes in use like spreadsheets, presentation slides, and other conventional software. Using these tools does not help retail planners make the granular plans that are required to thrive in a diverse market such as India. While retail planning itself is a time-taking process, the fact that these tools make it difficult to coordinate, and have the risk of miscommunicating crucial information, makes things even more challenging.
As a result, a lot of time and resources are spent on routine tasks, leaving little time for innovation and strategy planning – the need of the hour in this competitive market and rising consumer expectations.
What is the solution?
BOARD Retail Planning – The single version of the truth. BOARD combines retail business analytics, retail reporting software, and retail forecasting software, enabling retailers to increase the visibility of their data and make better informed, data-driven decisions to maximize the chance of succeeding while reducing wastage of time and other resources.
By logically linking the data coming different systems of different organizational units in a single repository, the platform provides complete visibility into any step of the planning and forecasting process, which is essential for the Indian market given its diversity. It also has the capability to model the planning algorithms and enable quick and accurate retail planning.
With BOARD, you have a more stabilized plan, and therefore more time to think about the more pressing issues, like the debate between online and offline presence, for example. Buyers and planners in companies can spend more time with reports and intelligent data that comes to them through the platform. They can utilise the data, the time, and their experience to plan better.
Finally, today, there is a need for a solution that can give you instant and weekly reports to help keep the company spot trends and understand the markets, so the company can feel the pulse. BOARD Retail Planning helps companies do just that with its strong analytics and reporting. It helps make the right decisions about which store in which geography needs what, and also at what point of time. Without a solution like BOARD, doing this is very challenging.
Here is a snapshot of all the capabilities of BOARD Retail Planning:
