Retailers to invest Rs 13,668 crore by 2017 on IT solutions: Study
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Modern retailers in India are estimated to invest Rs 13,668 crore by 2017 to deploy technology solutions at stores for cost control, opportunity assessment and risk minimisation, according to a survey.
According to a survey by Retailers Association of India (RAI) and market insight firm Nielsen, while a cumulative number is not available for the sector at present, on an average a retailer spends around Rs 1.55 crore on IT solutions annually.
"The retail sector is primed for growth and is looking at actively investing in information technology to support this growth," Nielsen India director Subhash Chandra said.
At this juncture, it is extremely important to efficiently deploy technology across the retail industry whether it is cloud computing, virtualisation, social networking or mobile shopping, he added.
The RAI- Nielsen report -- 'IT in Retail:Trends & Potential 2012', explores the relationship between retailers and the use of technology, from making investment decisions to deployment and management.
With a sample of 115 retailers, with revenues ranging from less than Rs one crore to over 200 crore, the survey conducted between December 2011 and March 2012, represents varied categories and retail formats.
According to RAI CEO Kumar Rajagopalan, modern retail is expected to constitute 10 to 12 per cent of total retail by 2015
At present the retail sector in India is estimated to be around USD 450 billion with the modern trade accounting for less than 5 per cent.
"As the second most important enabler for retail business, information technology is becoming a critical factor in driving this growth," Rajagopalan said.
At present over two out of five respondents claimed that IT is primarily used for cost control and operations management target, as against 38 per cent, who said they use it for business opportunity assessment and risk minimisation.
"However, amongst retailers, with greater than Rs 100 crore revenue, nearly half claim to use IT as a strategic partner and growth enabler," the survey said.
The most prominent solutions used by larger retailers are those for ERP (enterprise resource planning, 52 per cent) followed by store inventory management (49 per cent), it said.
"Over half of the respondents claimed that IT has enabled them to grow their business 39 percent claim it has somewhat helped in growing their business," it said.
For 55 per cent of respondents, IT works at an operations level, helping gain efficiencies and cost cutting.
The topmost challenge faced by the respondents in deploying IT within their systems was getting the right talent, skill and training (48 per cent) for retail companies at both the stages of the deployment and management.
Over two in five respondents cited difficulty in searching and identifying a right vendor for specific needs as a challenge, it said.
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