Tech Therapy for Retail
Ashok Kumar E R, VP- Cisco Services, Cisco India & SAARC
The retail sector contributes around 35% to India's Gross Domestic Product, making it an important driver of economic growth. According to a Government of India estimate, the retail sector is likely to grow to INR 2,00,000 crore (US$45 billion) over the next five years.
Retail companies are growing by opening new stores and expanding sales channels. Their strategy for profitability is not just to focus on operational efficiencies (having the lowest possible operating costs) but to also pull together differentiated offering in the market place to enable them to push for better price.
Given the market opportunity and a fragmented industry, the cost pressures are very high for the smaller players while there is significant opportunity for the bigger players to consolidate. As a result, retailers are looking for integrated solutions (read: Network-centric solutions)
Many traditional retailers are now leveraging advanced network based solutions to develop efficient operations, and deliver a unique customer experience. Additionally, they are deploying solutions to solve a variety of issues related to theft and pilferage, and employee productivity among others.
Intelligence and efficiency
Let's look at how a retailer took advantage of a network based solution. The Delhi Duty Free Services Pvt Ltd. (DDFS), which operates five duty free shops at the Delhi Indira Gandhi International Airport Terminal 3, was seeking a physical security and theft control solution that provided detailed reporting, and the ability to see every item in the stores. The solution had to operate without downtime, be scalable, and integrate with the primary airport network, which comprised of numerous legacy systems. Additionally, it had to enable staff to monitor, assess, and deliver information reliably and securely across its locations while maximizing staff productivity.
DDFS chose to implement a sophisticated security and theft control system which included a cohesive integration of LAN, unified communications, unified wireless, video surveillance, and physical access management solutions, connected over the network. The solution provided feature-rich communication between the five stores and command and control center helping security personnel easily monitor building access, increase situational awareness, react quickly to incidents and notify relevant authorities.
As a result of the implementation, all five duty free shops enjoy pervasive video coverage, giving the DDFS security team superior data collection and investigation tools. The built-in policy management and business rules provide DDFS security staff with exceptional flexibility to prioritize incidents based on rules, frequency, location, and other parameters. Since the solution is automated, it needs fewer staff members to monitor the stores thereby decreasing the need for physical interaction between security staff and customers. This helps to reduce security costs and provides for a more pleasant shopping experience.
Although the primary purpose of the solution is to secure merchandise , it is also aligned closely with other retail business objectives. Business intelligence data supports ongoing reporting and trend analysis, enabling to modify store topologies, present high-value goods more effectively, and formulate marketing strategies to boost sales.
Flexibility and scalability
Another example of a retailer who took advantage of network based technology is the Future Group, one of India's leading business houses with multiple businesses across the consumption space. The Future Group was planning to increase the number of its outlets from 100 to 3000. This required that the IT infrastructure had the ability to rapidly scale and yet be reliable, secure and highly available .
Since Future Group's existing infrastructure composed of multiple proprietary solutions, it allowed only limited scalability and support for the Strategic Business Unit (SBU). The architecture did not facilitate virtualization hence providing low return on compute assets, and increase power consumption.
To overcome the situation, The Future Group opted for the Service Oriented Network Architecture (SONA), an architectural approach to designing advanced network capabilities into the infrastructure. SONA provided Future Group with guidance, best practices, and blueprints for connecting their network services and applications to run the business.
Since SONA is an open framework for network-based services, it allowed Future Group to build a Service Oriented Data Center whereby consolidation, virtualization and business continuity was possible through optimal performance and low power consumption. The Future Group also benefited from better responsiveness, flexibility and resilience, a better time-to-service, efficient and effective service delivery along with the ability to scale all SBUs, meet growth projections and manage hyper growth.
Network facilitates growth
Examples like the above are indicative of the importance of making the network central to the business strategy of retail planning and how they will help to achieve better business results. Integrating the most effective designs, products, and services to comprehensively deliver safety and security, provides emergency response systems for retailers just as it does for corporate campuses, hotels, schools, critical infrastructure sites, transportation facilities including airports, and cities.
By leveraging the network platform for service delivery, retailers will be in a position to enjoy unprecedented levels of collaboration, productivity, and achieve economic growth. The need for them to do that, is now.