Indian Retail Industry-Pantaloon Retail (India) Ltd. Part IV (iv)

PEST Analysis (continued)
Technological Environment

Technological factors consist of “the rates of obsolescence, i.e. the speed with which new technological discoveries supersede established technologies”, and it is a known fact that “the rate of change in technology and innovations has the effect of causing new industries to emerge and also changes the ways in which existing industries compete” (Henry, 2008, pp.58). It has been observed in instances more than one that “the rapid rate of change of technology has changed the dynamics of industries”, and this in turn “has allowed new entrants to enter the market at a lower cost base than incumbents, thereby offering more competitively priced products and services and gaining market share in the process” (Henry, 2008, pp.58). In the current backdrop of the Indian retail industry, it has been said that technology will play a vital role in its development. Currently, most of the retailers in India operate just about everything manually and hence, “in a country where almost 97% of retailing is in the hands of small independent retailers, it can be expected that retailers are going to have some operational inefficiency” (Krafft & Mantrala, 2010, pp.131).

The Indian economy being characterized by inequitable distribution of wealth and resources, it has also been observed that “most of the organized, or more highly developed, retailers are using scanner data to adapt to customer buying behavior”, largely due to the fact that “technology helps them to take better decisions in some critical areas such as new product introduction, suitable product offerings, quicker ordering, and assortment planning” (Krafft & Mantrala, 2010, pp.131). Although retailers have been using loyalty data pertaining to their customers in order to plan “customized promotional offerings for different sets of customers” (Krafft & Mantrala, 2010, pp.131), and have implemented technology to a certain extent, it has been observed that there is a minimum utilization of information.

While focusing on the Indian retail market, Sinha and Kar (n.d.) have opined that Shoppers’ Stop “could be viewed as one of the best users of technology”, and have augmented their opinion by saying that “the loyalty program of Shoppers’ Stop is exemplary and matches up to those of some international brands” (Krafft & Mantrala, 2010, pp.131).

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