Winning in Retail – BRIC by Bric
Taken from the latest edition of SPEAK magazine the following post features our global product industry director for Microsoft Dynamics Retail, Michael Griffiths who talks about the retail opportunity in the BRIC countries.
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Together, Brazil, Russia, India and China (the BRIC countries) account for more than 42 per cent of the global population and, over the last few years, have experienced sustained joint gross domestic product growth, significantly outpacing the developing world. According to global management consulting firm A.T. Kearney, the retail markets in the BRIC countries, which are already sizeable, look set to grow further, particularly as disposable incomes increase and consumption patterns change. In the company's 10th annual Global Retail Development Index (GRDI), Brazil was ranked top of the developing economies for global retail expansion, with India following closely behind in fourth, China in sixth and Russia in fourteenth.
Sweeping changes in the BRIC countries' socio-economic frameworks in particular have led to the emergence of this buoyant retail sector, which is thriving on a progressive consumer ethos. The Chinese apparel retail market alone, which has been awarded the top position by A.T. Kearney as the most attractive emerging market for apparel retailers, is being driven by the country's large population and the growing disposable income of the middle class. With similar developments like this taking place across each of the BRIC countries, domestic retailers are coming to benefit from the mounting retail appetite, and global retail chains are making a beeline to grab a share in these booming markets. American clothing retailer Gap, for example, opened stores in Beijing and Shanghai in late 2010. Growth like this, you would imagine, requires a strong business strategy backed up with modern IT. However, until now, retailers in emerging markets have faced a limited choice of IT solutions to choose from to support their operations. "While clearly demonstrating strong signs of sustained growth, the retail industries in these countries are typically highly fragmented, with many resellers, distributors and small discrete shops dispersed across each country," says Michael Griffiths, global product industry director for Microsoft Dynamics Retail. "This has created challenges in providing appropriate IT solutions for retailers operating in these regions. Selling IT solutions to retailers in India is infinitely different to selling to retailers in the US where a handful of key businesses dominate the market, for example. Added to that, many shops do not have computers to begin with and, for a lot of them, being able to automate just one part of their operations (typically accounting) is a huge achievement."
Until now, many retailers have either had to make do without technology, or rely on help from one of just a few local IT providers to create ad-hoc systems that provide the basic functionality they need. If you compare that with the rich, end-to-end functionality that is being provided in Microsoft Dynamics AX for Retail, you can see why Microsoft is confident its new solution is the answer retailers in emerging markets are looking for. Griffiths, who was recently in Brazil for the official launch of Dynamics AX for Retail , says that retailers operating in the BRIC countries are looking to phase out manual processes and replace them with a solid solution that is easy to use, meets local requirements and can offer rich, end-to-end functionality that will scale with the business as it grows. "At Microsoft, we recognise that the majority of retailers operating in the BRIC countries are currently looking for a more basic level of IT, but that doesn't mean to say they shouldn't have access to enterprise-class technology that will help to enhance their operations. One of the key tenets of the Dynamics portfolio of products is simplicity. Because of the system's simple and intuitive user interface, retail staff that may never have even used a calculator before can get up and running on the system within a couple of weeks. We are bringing something new to the market with Dynamics AX for Retail and are confident it meets the requirements of what retailers across all localities are looking for. "
As a single, end-to-end solution, Dynamics AX for Retail drives visibility across the organisation, enabling retailers to reduce complexity, react quickly, seize new opportunities and build customer loyalty, all of which are vital in today's evolving retail environment. The architecture and innovation that remain core to Microsoft Dynamics AX for Retail also provide extensibility and allow for true interoperability with other Microsoft technologies. This is a far superior value proposition to mere integration; users can work seamlessly between applications, driving increased productivity and allowing a business to realise greater value from its technology investments. "Our value proposition lends itself well to emerging markets," continues Griffiths. "Retailers can be assured of long-term value when choosing our solution and can receive ongoing support from a local implementation partner to ensure they are getting the most from their investment. Microsoft is currently working with both globally and regionally-based partners to help manage each implementation from start to finish. As a result of these collaborations, uptake of the solution in these markets is very promising indeed." Knowing all too well the complexities that come with successfully delivering an end-to-end solution on a global scale, Microsoft worked hard on translating and localizing Dynamics AX for Retail for different tax regulations and fiscal requirements. In addition, the company has trained more than 200 partners globally. "We have partners who are both local to a specific region and who sell globally, which is important with the new localisations and translations we have provided," says Griffiths. "One of the key strengths of this product is that it is very flexible. Any vendor can add features to a product but what you can't add is a good architecture, extensibility and scalability, and that is where our solution really shines."
With successful rollouts currently taking place at retailers around the world, Griffiths is confident of the longevity of the solution, both in emerging and developed markets globally. "What we've delivered so far is by no means the end; it's just the beginning," he says. "We have a global strategy and we're delivering on that vision by providing a solution that can span borders. Dynamics AX for Retail is a great connected story – it not only helps retailers achieve a 360-degree view of the customer, but it helps them connect their operations as they expand into new markets."
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I will be back next week as we take a look at the indian retail market.
Luke Shave
Sr. Industry Marketing Manager
