Retailing and CRM


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Need of CRM in Retail industry

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Retailing and CRM

  1. 1. Retailing and CRM
  2. 2. Retailing“Retailing is a distribution channel function, where oneorganization buys products from supplying firms ormanufactures products themselves, and then sells thesedirectly to consumers.”
  3. 3. Forms of Retailing Convenience stores Discount stores Factory/company outlets Specialty stores Supermarkets Department stores Hypermarkets
  4. 4. Characteristics Highly unorganized and & fragmented industry. Linkages with the economic growth (22% to GDP and 8% employment). Rural and urban divide. Emergence of multiple retail formats. Long supply chain. Working capital intensive. Generating employment opportunities.
  5. 5. Product Based Segment Apparels. Footwear. Health and Beauty Care Services. Consumer Durable and Home Appliances. Furnishing, Utensils, and Furniture Home and Office. Food and Grocery. Books, Music and Gifts.
  6. 6. Kinds of Retailing Unorganized:  Ownership and management rest with one person.  Accounts for 2/3rd of the retail market.  Normally street markets, counter stores, kiosks and vendors. Organized:  Modern retailing.  Offers variety of products (quality, value for money).  Shopping a memorable experience.
  7. 7. Organized Retail Sector Tremendous scope; to grow faster than GDP growth in next few years. Grow at faster CAGR of 21.8% to $ 55 billion, garnering around 15% of overall retail sales. Top organized retail categories by 2015 would be food, grocery and general merchandise; apparel; durables; food service; and home improvement.
  8. 8. Factors for Business Growth Rising urbanisation. Growing consumer class. Growing per capita expenditures. Economic growth Growing spread of „plastic money‟. Changing face of Indian consumerism – from necessities to luxuries. Rising number of nuclear families. Growing female working population. Developments in the real estate scenario. 50% of country populace under 25 years of age; prime driving factor for modern retail sector.
  9. 9. “There is only one boss. The Customer!He can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.” -Sam Walton, founder of Wal-Mart
  10. 10. Indian Customers Time killers: Moves around & covers lot of store; spending less time; waiting for someone; no intention to buy; Zero conversion rate. Focused Fulfillers: Moves quickly to the specific product; 82% conversion rate. Product Groupies: Have specific notion about the store; will touch many products, but focus on the target group product; 37% conversion rate. General Browsers: Cover large area; move slower than time killers; non-focus interaction with product; 2% conversion rate. Pleasure Seekers: Spends long time; easily influenced; urgency; 79% conversion rate.
  11. 11. Characteristics of Customers High disposable income. Price sensitive. Value for money. Educated.
  12. 12. Major Organizations of the SectorName Sales Turnover (cr) Market CapPantaloon Retail 4097.43Shoppers Stop 1712 3012.03Trent 716.71 2360.15Kewal Kiran 236.62 894.86Brandhouse 737.45 69.15Koutons 535.55 59.73
  13. 13. Customer Retention-Retail Discount pricing. Attractive variants of products and services. Loyalty programs. Offers. Attractive service.
  14. 14. Customer Defection-Retail Poor servicing. Quality issues. Few variants. Billing/Queuing issues. Facility location.
  15. 15. CRM Penetration Organized:  Single-brand retailers operating in state, national, & international platform.  Multi-brand retailers operating in state & national platforms. How many of them have CRM?? How many of them are having CRM and using it better and not using it?
  16. 16. Process FlowReceiving After the Enquiring Directing Verifying Billing Escorting salescustomer servicing
  17. 17. Solution Providers Siebel (sales and marketing) Integrated Retail Management Consulting Pvt. Ltd. (POS s/w) Biz Technologies(Customer relations). Radiant Systems(e-mail marketing)
  18. 18. Operational CRM Front office processes. Customer interaction added to contact history. Retrieval of information. Customers can interact with different people or different contact “channels” in a company over time without having to repeat the history of their interaction each time.
  19. 19. Blog Wiki Email Phone Snail Mail Physic Web al Personal CustomerMedia Touch Fax Points Source: Elijah Ezendu, CRM
  20. 20. General Areas of Operational CRM Sales Force Automation Customer Service and Support Enterprise Marketing Automation
  21. 21. Key Tasks in Sales Automation Tracking Customer Preferences Tracking Customer Demographics Contact Management Quote Management Sales Administration Sales Forecasting Lead Management Account Management Performance Management
  22. 22. Customer Service and Support Automation and Coordination (service requests, product returns, customer complaints, and enquiries). Services and support (contact center, call center, web portal, or face-to-face interaction at a remote location in the field).
  23. 23. Enterprise Marketing Automation Application of technology to marketing processes. Information pertaining to industry trends, macro- environmental factors and competitors. Facilitates appropriate engagement and control of campaign management, event-based marketing, cluster customer segmentation, individual customer segmentation. Increasing marketing efficiency.
  24. 24. Analytical CRM Analyses customer data. Design and execution of targeted marketing & specific customer campaigns. Optimize marketing effectiveness. Analysis of customer behavior to aid product and service decision making. Management decisions. Prediction of the probability of customer defection.
  25. 25. Applications of Analytical CRM Campaign management and analysis. Customer segmentation. Customer satisfaction measurement. Sales Coverage Optimization. Financial Forecasting. Program Evaluation. Price Optimization. Customer Satisfaction Growth. Product Development. Fraud Detection. Risk Management. Contact Optimization.
  26. 26. Impact of Analytical CRM Customer Customer Customer Acquisition Retention Information• Cross-Selling • Retain • Offer key• Up-Selling current information to customers customers effectively
  27. 27. Relationship Between Operational and Analytical CRM Customer Touch Points Customer Data Back Office Practice Process Strategy Data Operationa Analytical l New Strategy CRM CRMSource: Siddiqi, Akhgar & Wise, Framework for Implementation of CRM Strategy in Retail Sector
  28. 28. Security and Privacy-Issues Customer data being lost or stolen. Employee access issues. Hacking. Misuse of data.
  29. 29. Security and Privacy-Solutions Encryption of sensitive data. Providing the security foundation for critical data and applications. Protects critical data from both internal and external threats.
  30. 30. KPIs for CRM Compelling product & service offerings. Create and manage customer loyalty programs. Improved customer service. Real-time info across departments and systems. Advanced security of client data. Customer lifetime purchase value. Customer purchase value.
  31. 31. Future Trends in CRM Products in accordance with customer‟s mindset. More action than transaction. Smart shopping. International players. Social CRM
  32. 32. Case Study-Landmark Scale up existing loyalty program. Ability to earn loyalty points anywhere and burn it anywhere. Different group companies had their own point-of-sale systems. Collecting CRM data on a daily basis from different locations; did not have dedicated IT personnel. Web-based module that connects to a POS database and transfer data to a central Oracle database.
  33. 33. Contd. Some group companies had POS systems with other databases. Small application on each POS containing sales data and would be uploaded through a Web program to a central server. Group loyalty program cards were issued with barcodes.
  34. 34. Contd. Rs 20-lakh project, in November 2008. Java/Oracle Platform. Launched in March 2009. Well received and achieved ROI soon.
  35. 35. Thank you!