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Prof. Ananth Raman's literature says that retailers think stock-outs are mainly because of demand uncertainties but the study on inventory level inaccuracy says that demand uncertainty is only 13% of problem; the real problem lies in inefficient in-store
operations. Thus, to combat inefficient store operations, retailers today are embracing Radio Frequency Identification Device (RFID) as an enabling technology that will provide them value beyond traditional Supply Chain. The RFID system can help provide real-time inventory visibility on the sales floor and deliver proactive alerts for replenishments.

Though the cost of RFID is high but it is technology of future. Management Guru, Peter Drucker, rightly said, "Future is already arrived." Wal-Mart uses RFID technology to manage its supply chain and is happy with the results. Tomorrow as the Indian Retail industry progresses one has to look at RFID not only as supply chain driver but also as sales driver.

Introduction

The advances in retail demand forecasting, inventory management applications and merchandise management remains just as much an art as it does a science. The basics of retailing involve understanding your customers, their needs and expectations. For all of the capabilities that have been built into software applications, it still requires a merchant’s touch to take that information, interpret and utilize it to generate sales and gross profit increases. It is critical for retailers to remember that these applications are tools, not "solutions" as they are frequently billed.

A retailer’s job is to stimulate customers to buy a product. In order to fulfill this aim, retailers introduce product promotions. Promotions are directed at the ultimate consumer (a "pull strategy" encouraging purchase). It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts, or trading stamps, arranging demonstrations or exhibitions, setting-up competitions with attractive prizes, temporary price reductions, door-to-door calling, tele-marketing, and personal letters.

Guaranteeing product availability during promotions has proved to be a challenging task for many retailers. Forecasting demand based on promotions is even more challenging.

Retailers face several challenges when it comes to forecasting: -

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* Contributed by: -
Sauraraj Nath & Vikrant P. Bawane,
Post Graduate Programme in Agribusiness Management (PGPABM) II,
National Institute of Agricultural Extension Management (MANAGE), Hyderabad.