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CRM in Apparel Retail Sector

Enrollment No. : A0102107042
MBA (E&L) Class of 2009

Under the guidance of

Mr. Jitender Kumar

Professor , HOD Economics Department.

In Partial Fulfillment of Award of Master’s Degree

In Business Administration





I, KAPIL BHATI student of Masters of Business Administration from Amity

Business School, Amity University Uttar Pradesh hereby declare that I have completed
Dissertation on “CRM IN APPAREL RETAIL SECTOR” as part of the course

I further declare that the information presented in this project is true and original
to the best of my knowledge.

Date: Name: Kapil Bhati

Place: Noida Enroll No: A0102107042
Program: MBA (E&L)


I, ………………………………..hereby certify that Kapil Bhati, student of

Masters of Business Administration at Amity Business School, Amity University Uttar
Pradesh has completed dissertation on “CRM in Apparel Retail Sector ”, under my

Mr. Jitender Kumar

Professor , HOD Economics Deptt.

“No Project is ever a work of only one person and this one is no exception”

This project is the product of many hands, and countless hours from many people. My
thanks go out to all those who helped, whether through their comments, feedback or

It gives me immense pleasure to express my deep sense of gratitude to Ms. Varsha

Khattri (Faculty guide) for her valuable guidance, constant supervision and above all
her continuous encouragement & support during the tenure of this project.

I am deeply indebted to all the Store Managers of different Lifestyle Stores, for
providing me with best information and shared their vast knowledge and technical
expertise for completing this project.

Sincere thanks to all the people who have worked under this project. Lastly, no words
could adequately convey my heartfelt thanks to the family members and friends who
indirectly co-operated with us.

Kapil Bhati


Certificate from Faculty guide

Certificate from Industry Guide


S.No. Chapter Name Page No.

1 Introduction
1. Industry Insight – Indian Retail Industry
1.1 Introduction
1.1.1 Growth in organized retail
1.1.2 Drivers for retail transformation in India
1.1.3 Challenges for organized retail
1.2 Evolution of Retail
1.3 Retailing Formats in India
1.4 Some Facts
1.5 Marketing segmentation of retail industry

2. Apparel Retail in India

2.1 Overview
2.2 Characteristics of Apparel retail sector
2.2.1 New Retail Entrepreneurs
2.2.2 Changing Consumer Behavior
2.2.3 From Franchise to Company Owned
2.3 Some Facts about Indian Apparel Industry
2.3 Major Players
2.3.1 Pantaloon Retail (India) Limited
2.3.2 Globus
2.3.3 Shopper’s Stop Limited
2.3.4 Trent Limited
2.3.5 Lifestyle International (Pvt) Limited
2.3.6 comparison between different players
2.4 Managerial Challenges
2.5 Future Outlook
2.6 Retail Touch points

3. Customer Relationship Management

3.1 Introduction
3.2 Dimensions of CRM
3.3 Customer Retention Profile
3.4 CRM & IT

2 Literature Review

3 Problem Statement

4 Methodology

5 Results & Discussions

6 Suggestions & Conclusion


Industry Insight – Indian Retail Industry:
The retail sector in India is witnessing a huge revamping exercise as traditional markets
make way for new formats such as departmental stores, hypermarkets, supermarkets and
specialty stores. Western-style malls have begun appearing in metros and second-rung
cities alike introducing the Indian consumer to a shopping experience like never before.

The Indian Retail Sector

The Indian Retail Sector is at an inflexion point, with changing demographics driving
growth of organized retailing and driving growth in consumption.
With an expanding economy, the country’s overall retail sector will become a $450
billion (Rs20.85 trillion) business by 2015. At present India’s modern retail business
accounts for only about 5% of the country’s annual retail business.
Along the way, the modern retail business will create about 1.6 million jobs in the next
five years acc. to McKinsey.
Modern retailers will not only create employment opportunities but also would help raise
India’s overall economic productivity and could also result in lowering prices of goods.
With changing demographic and economic profile of the Indian population, it is believed
that India is expected to experience accelerated consumption over the next few years.
Further, it is also believed that increase in consumer spending would be driven by
nuclearisation of families, increasing population of working women and new job
opportunities in emerging service sectors such as IT Enabled Services. With declining
interest rates an average Indian is not averse to taking loans. Not only are the
demographic factors becoming more favorable but also the growing media penetration is
leading to a convergence of aspirations of various classes of consumers.
Food and beverages, apparel and consumer durables are the top three categories of
consumer spend and form 87% of the total retail sales in India.
Source: 1)

Growth in organized retail

In sharp contrast to the global retail sector, retailing in India – though large in terms of
size – is highly fragmented and unorganized. With close to 12 million retail outlets India
has the largest retail density in the world.
However, most of these retail outlets belong to the unorganized sector. The inability of
the unorganized sector to offer a wide range of products along with artificially inflated
costs due to various factors have presented opportunities for growth in the organized
retail sector migration from unorganized to organized retail has been visible with
economic development in most economies. The Indian retail industry is evolving in line
with changing customer aspirations across product groups, with modern formats of
retailing emerging. Organized retail derives its advantages in generating operational
efficiencies while simultaneously catering to rising consumer aspirations.
Size drives economies on procurement, and lowers logistics and marketing costs while
delivering better value to customers in terms of lower price, better quality, greater
selection, improved service and in store ambience.

Drivers for retail transformation in India

A number of factors that drive transformation in retail – such as income growth, changing
demographic profiles and socio-economic environment – are already in place in India.
However, organized retail has to overcome significant challenges in terms of regulations
and infrastructural barriers in order to realize its full potential. Availability of quality
retail space has been one of the main constraints for development of organized formats in
India. In the past, negative yield spread on leased property and lack of bank funding due
to unorganized property market resulted in a dearth of quality retail space in the country.
The spread between yield on property and its financing cost has turned positive with the
fall in interest rates. Attractive yields on investments have resulted in sharp increase in
property development.
Consumerism and brand proliferation has been another enabler for organized retailing in
India. Most of the world’s leading brands are now present in India.

Challenges for organized retail

There exist differential sales tax rates across states in India .This adds to cost and
complexity of distribution as this necessitates multiple warehouses and does not allow for
centralization of certain 16 procurements given the incidence of local levies. At the same
time, there is large-scale sales tax evasion by smaller stores who derive significant cost
advantage through such evasion.
The retail sector has not been granted industry status, limiting funding from banks and
financial institutions. The capital requirements for a retailer are in real estate (which
banks have historically restricted lending to) and for working capital requirements. While
some of the leading retailers are still able to get bank funding, the smaller ones are
constrained for growth funding. Similarly, equity options are also restricted with Foreign
Direct Investment not being permitted in the retail sector. FDI restrictions have also
restricted entry of international majors in retailing in India, which could have
Otherwise helped the industry develop with funding as well as bringing in of best
practices and systems.
The availability of trained manpower poses a key risk for the retail sector. With growing
opportunities in the emerging service sectors such as ITES, the ability of the retail
business to hire and retain quality people is under pressure.
Supply chain management efficiencies are essential to retailers to maintain and improve
margins. In India, both vendor management and logistics management are still
undeveloped. However, with growing size of operations, supply chain efficiencies will
become a key differentiator of profitability in retail.

Value Retailing
These stores primarily retail primarily food and house hold items. These are primarily
large stores with volume based discounted prices. The share of expenditure on food and
grocery in a consumer’s wallet, availability of a vide variety of products at a reasonable
price are the main factors which has contributed to the growth of this segment. The larger
chain of supermarkets and hypermarkets (namely Big Bazaar, Star India, Nilgiris, Food
world) has presence in metros and mini metros.

Lifestyle retailing
These stores retail primarily non-food items such as apparel, footwear, accessories,
cosmetics and household products. They stock multiple brands across product categories,
though some of them focus on their in house store label (on the lines of Marks &
Spencer’s and St. Michael). These stores are found on high streets and as Anchor Tenants
of shopping malls.
Several local department store chains have opened shop in India in the past five years.
The convenience factor coupled with the inspirational perception of shopping in a
department store has contributed to their growth. The larger chains of department stores
(Namely Pantaloons’, Shoppers’ Stop, Westside, and Lifestyle) have presence in the
metros and mini metros.

Evolution of Retail
Source: 1)

India’s five main consumer segments:

2. Central Statistical Organization(CSO) & Technopak Analysis

Retailing Formats in India:

The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They
lend an ideal shopping experience with an amalgamation of product, service and
entertainment, all under a common roof. Examples include Shoppers Stop, Pyramid, and
Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword,
RPG's Music World and the Times Group's music chain Planet M, are focusing on
specific market segments and have established themselves strongly in their sectors.
Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the MRP
through selling in bulk reaching economies of scale or excess stock left over at the
season. The product category can range from a variety of perishable/ non perishable
Department Stores:
Departmental Stores are expected to take over the apparel business from exclusive brand
showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started
in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and
even has its own in store brand for clothes called Stop!.
Hyper marts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as Supermarkets.
These are located in or near residential high streets. These stores today contribute to 30%
of all food & grocery organized retail sales. Super Markets can further be classified in to
mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging
from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal

Source: 1)

Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas. They
stock a limited range of high-turnover convenience products and are usually open for
extended periods during the day, seven days a week. Prices are slightly higher due to the
convenience premium.
Multi Brand outlets, also known as Category Killers, offer several brands across a single
product category. These usually do well in busy market places and Metros.
Some Facts:
• Global Retail industry is of size USD 8 Trillion
• Over 50 of the Fortune 500 companies are retailers
• 25 of the Asian Top 200 companies, are retailers
• Fortune #1 “Wal-Mart” is a Retailer
• Over 12 Million Outlets in India
• Organized Retail < 3%
• Set to grow to 8-10% by 2010
• Organized Retail expected to be around Rs.110,000 Cr(USD 25 b) by 2010

Share of all the segments in retail:

Source: 1)
APPAREL RETAIL: Moving Beyond Customer Expectations
The influence of fashion clearly, fashion has also played an important role in shaping
apparel consumerism. As lifestyles change, fashion in India is becoming more stratified,
as in the West. Technology, ideas and lifestyles are moving concurrently, and quickly.
Companies and brands that offered monotonous, mundane products for years have now
tripled their product ranges and new appealing shapes and forms are being launched each
Top-notch fashion professionals came together four years ago to form the Fashion Design
Council of India. Under the aegis of the Union textile ministry and in tandem with
National Institute of Fashion Technology, FDCI now provides professional inputs for
designing labels and is now working towards developing the fashion supply chain
through backward linkages with suppliers and mills, and forward linkages with the retail
and distribution network.
The boom in domestic apparel, nevertheless, tells only part of the story. India has huge
potential as a market for foreign clothing, given its large population and growing
household incomes. A few significant foreign players—such as Levi Strauss, Benetton
and Lacoste—have been selling their branded apparel in India for a number of years. But
now, just like their Indian counterparts, global apparel brands are setting up their own
apparel outlets, instead of just selling through departmental stores. Ralph Lauren, for
example, has a limited range exhibited in generic department stores located in metro
cities. Yet it has now set up its own stand-alone stores, which showcase all the company’s
Now, with the government’s proposal to let in branded retail players— brands like
Benetton and Lacoste currently sell mostly through the franchise route—investments in
India’s apparel sector are likely to go up substantially.

Indian Apparel Industry- an Overview:

The apparel industry is one of India's largest foreign exchange earners, accounting for
nearly 16% of the country's total exports. The 1996 Indian textile exports approximately
amounted to Rs.35,000 crores of which apparel occupied over Rs14,000 crores.
Source: 1)
It has been estimated that India has approximately 30,000 readymade garment
manufacturing units and around three million people are working in the industry. Today
not only is the garment export business growing, enthusiasm in the minds of the foreign

buyers is also at a high. Today many leading fashion labels are being associated with
Indian products. India is increasingly being looked upon as a major supplier of high
quality fashion apparels and Indian apparels have come to be appreciated in major
markets internationally. The credit for this goes to our exporter community.
Consistent efforts towards extensive market coverage, improving technical capabilities
and putting together an attractive and wide merchandise line has paid rich dividends. But
till today, our clothing industry is dominated by sub-contractors and consists mainly of
small units of 50 to 60 machines.
India's supply base is medium quality, relatively high fashion, but small volume business.
Recent recession in Europe and the South Asian currency crisis have also contributed
their own bits to the decimating Indian exports. Though these are expected to fizzle out
soon, there is no reason for complacency on the part of Indian exporters or of the garment
industry. The industry will be soon faced with open competition shorn of quotas or tariffs.

Thus the need of the hour is to enlarge both manufacturing as well as the marketing base.
Inculcation of a spirit of innovation by way of research and development and tapping new
markets especially in South Africa, Central Africa, CIS, East European countries, Latin
America and Australia is also mandatory for export growth.
In India, clothing retail accounts for 36% of organized retail business. It is the largest
Sector. Ready-made apparel accounted for an estimated 20% of domestic clothing sales
in 2005. With growing working women wearing western wear to work, and pressed for
time, market for good readymade clothes is likely to grow. India is a film-crazy nation,
and the largest producer of films, with more than 1,000 every year. They provide
entertainment and an escape from reality for India’s masses, and set the popular fashion
trend. Bollywood fashions have become pan Indian. They affect various sectors of the
market including clothing, footwear, weddings and fashion accessories.
With the advent of modern format retailers and the growth of plastic cards, affluent urban
Indian women are shopping like never before.
Source: 1)

They spend mornings browsing in stores looking for deals or latest styles. Upper income
urban women are adopting ethnic chic.
These are designer clothes that incorporate Indian motifs, ethnic fabrics and are a fusion
of western and Indian styles.
In the large urban centres, apparel retailers, like Shoppers Stop, Westside and Pantaloon
have popularized their private labels, which have attracted urban shoppers. Westside
carries only its own private labels, while for the other stores, 20-30% of their apparel
turnover is from private labels. Customers have loyalty to a store rather than any
particular garment brand. This has led to a thriving unbranded or local brand market for
ready-to-wear clothes leading to severe competition. Hence organized retailers like
Lifestyle, for instance, has a loyalty programme called `The Inner Circle', while
Pantaloons offers a `Green Card' Rewards programmes, Westside has `Club West' to
Woo the customers. Customers look to design and fit of the clothes, and use the shop’s
name as a quality standard.
Indian textile and clothing industry during 2006 is estimated to be about INR1,511
billion ( USD 38 billion) , which includes apparel of men, women and kids .

Characteristics of Apparel retail sector

As apparel retail is led by fashion, a player needs to keep a close watch on fashion
amongst teenagers as they are the trend setters. Role of Bollywood in spreading fashion
needs to be understood. Seasonal variations on stocking pattern and need to clear
inventory at the end of season should be understood by apparel retailer. Typically once an
item is sold from the outlet, retailer ensures that there is no repetition of same. It gets
replaced by different design, style, colour. Importance of store layout, décor is very
critical. A browser visiting the store frequently likes to see changes in the layout
otherwise he may carry the impression that stocks are not moving out of the store.
Category management becomes very crucial function as transformation of design into
production and delivery has to be completed before fashion or fad changes in the market.
This highlights the importance of sales promotions- short term activities which induces
trade or consumer to buy now rather than in future as the value of apparel after the
season, goes down substantially and inventory carrying burden turns out to be very high.
Apparel retailer needs to understand critical role of sales promotions. Attractive
promotions induces purchase acceleration, stock piling and brand switching on the part of
a consumer which substantially reduces retailer’s financial and inventory risk and
consumer’s financial risk and psychological risk. If the customer will purchase first then
only he/she can be loyal so in order to retail the existing & attracting the new ones,
company should have best CRM strategies.

Enter, the New Retail Entrepreneurs

 Delhi-based Ebony has commenced a massive expansion in northern India with eight new
stores and a combined retail space of 150,000 square feet. Besides sprucing up exiting
stores in Delhi and Punjab, the company is expanding to other north Indian states.
 Lifestyle, a part of the Dubai-based Landmark Group retail chain,earlier owns seven stores
located across various metro cities, then company has doubled its presence to 14 stores in
2006, occupying a combined retail space of one million square feet.
 Mumbai-based lifestyle chain Pantaloon spends around US $ 840000 in a year to revitalize
its brands and promote new brands.
 Bangalore-based Shoppers Stop –has more than 35 more Outlets.
 TCNS Clothing has more than 37 stores across the country.
 Spykar has set up approx 35 stores across the country in all the major cities.

Branded apparel merchandising is gathering critical momentum in India,

and that’s a bit of a surprise in a country where preferences change every
25 km and loyalties change for a 10% difference in pricing.

Source: 1)

Changing Consumer Behavior

But suddenly, brands have started shaping buying behavior. A large young working
population with a median age of 24 years; growing numbers of nuclear families in urban
areas; increasing working-women population and emerging opportunities in the services
sector have increased the average consumer spend on branded clothing.
Industry experts believe that apparel sales in retail stores posted a growth of between 25-
30 per cent in 2003 and according to an estimate by McKinsey, the branded apparel
market—is now worth nearly $ 3 billion.
Until recently, quality retailing was limited to high streets and standalone departmental
stores. Now, across metros, apparel buying is the second biggest consumption category at
malls, after food products. Without question, the consumer boom is being driven by a
new openness about using credit cards. According to ICICI Bank, usage of credit card has
increased a lot.
Apparel retailing is no longer a metropolitan phenomenon; companies are now quickly
branching to smaller cities in an effort to cash in on the consumer boom.

From Franchise to Company Owned

Larger textile manufacturers were the first off the block in the nineties, with big players
like Raymond, Arvind Mills, Madura Garments and Zodiac Clothing building extensive
retail networks. Because the market potential was still relatively small in the nineties,
most players used the franchise route to expand.
Now, companies are using their own funds to increase the capacities of their retail stores.
Previously, the Arvind Mafatlal Group had a chain of below-1,000 sq ft stores to sell its
flagship brand apparel: Arrow. Over the last two years, the company management has
closed down a number of these small stores and gone in for bigger stores. The new stores
have a minimum 1,500 square feet space, and nearly per cent of Arvind’s apparel
business comes from these outlets.
Raymond’s – the flagship brand of the Singhania Group-- is revamping its chain of 300
stores—known as Raymond’s Shops—and focusing on readymades at a cost of around
US $ 35 million. The logic: the contribution of readymade apparel to total sales has gone
up 25-30 percent compared to the previous year.
Likewise, Madura Garments has opened up a mega store in the heart of Bangalore that
sells the company’s flagship brand, Peter England. Spread over a carpet area of 1350
square feet, the store is designed to function at three levels—ground, semi-ground and
mezzanine. Last year, this single store logged sales of nearly US $ 205,000. Encouraged
by this success, the company has opened a second mega store and is planning a third in
the near future.
Spurred by these successes, a slew of new retail entrepreneurs chains are investing
heavily to cash in on India’s US $ 15 billion clothing market.

Some Facts about Indian Apparel Industry:

• India’s top retailers are largely lifestyle, clothing and apparel stores. This is
followed by grocery stores
• Following the past trends and business models in the west retail giants such as
Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost
doubling their current number of stores

• Even within the top income segments, there is a fivefold difference in per capita
income in apparel
Some of the major Indian Players:
• Pantaloons
• Globus
• Lifestyle
• Ebony
• Westside
• Shopper’s Stop
• Metro
• Pyramid
Introduction to some retail stores:

• Pantaloons:
This Company was incorporated on October 12, 1987 as Manz Wear Private Limited.
The Company was converted into a public limited company on September 20, 1991 and
on September 25, 1992 the name was changed to Pantaloon Fashions (India) Limited and
in the same year the Company made an initial public offering. Later they changed their
name to Pantaloon Retail (India) Limited on July 7 1999.
Source: 1)
Pantaloons believes in managing customer expectation by offering them all the
requirements for their entire family under one roof is the key to being a successful
retailer, and hence have built their business model around ‘Family focus’ rather than
‘individual focus’.
Pantaloons clearly define Lifestyle products under Private Labels and third party brands.
They have a loyalty card programme with a name of ‘Green Card'. It is divided
hierarchically into one star, three star and five star. Every point generated at all the levels
is equivalent to Rs.1
It also stays in touch with its loyal customers through Mailers, SMS’s E-mails and
Telephone informing them about the developments and promotions.

• Globus :
Launched in January 1998, Globus is a part of the Rajan Raheja group. The company
opened its first store in 1999 at Indore followed by the launch of its second store in
Chennai (T-Nagar).
The Globus has a Privilege Club card which is very unique in a way that Members are
immediately rewarded for purchases at any of their stores, in addition to a host of other
privileges such as exclusive tie ups, promotion and special shopping hours. To each his
own individual needs vary. This is why Globus offers 2 different card categories, each
with it own benefits designed to suit the needs of the customers.

• Shopper’s Stop:
Shoppers Stop is an Indian department stores promoted by the K Raheja Corp Group
(Chandru L Raheja Group), started in the year 1991 with its first store in Andheri,
Mumbai Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging
Market Retailer of the Year Award", by World Retail Congress at Barcelona, on April 10,
Shopper’s stop has co-branded credit card tie-up with Citibank to provide its customers
with exclusive benefits for shopping, The Company has launched a new consumer
promotion called ‘Make Your Own Sale Day’.
Shopper’s stop has a loyalty card program with the name of first citizen card wherein
Every point generated at all the levels is equivalent to Rs.1
• Westside:
Established in 1998 as a part of TATA group.
Westside idea is Club West, a customer loyalty programme launched in May 2001. The
30,000-plus members of this club get rebates at restaurants and on holiday packages from
the Taj Group of Hotels, home delivery of alterations, and best of all, special shopping
hours on the first day of any discount sales event organized by the chain.

• Lifestyle
Lifestyle International (P) Ltd is part of the Landmark Group, a Dubai – based retail
chain. With over 30 years’ experience in retailing, the Group has become one of the
foremost retailers in the Gulf.
Positioned as a trendy, youthful and vibrant brand that offers customers a wide variety of
merchandise at an exceptional value for money, Lifestyle India began operations in 1999
with its first store in Chennai. Lifestyle has a loyalty card programme Known as the ‘The
Inner Circle ' For every Rs.50 spent at any of the stores, 1 point is earned. For every 100
points earned, gift voucher of Rs.100 is received.

Source: 1)

Comparison Between different players:

Store Name Pantaloons lifestyle Globus Shopper’s Stop Westside

Format Multibrand Multibrand Exclusive Multibrand Exclusive Tata

Type own private Trent group
labeled brand
Positioning Family store Unique & high Fashion at Family store Style &
quality Family afforfability affordability
categories Apparel Apparel Apparel & Apparel Stylized
accessories for accessories for accessories accessories for clothes,
men, women & men, women & for men, women & footwear &
children children men, children accessories

Average Rs.1800 Rs. 800 Rs. 300-999 Rs.1200 Rs199-1999

billing per

Average 1000on 1200 in week 2000 in week 1200 in week 25-45 per hour
footfalls weekday days & 6000 days & 7400 days & 7000
& 1500 to 2000 during week durin week during week
on weekends, end end end


1. End of Yes No Yes Yes Yes


2. Festive Yes Yes Yes Yes Yes


3. Loyalty Yes Yes Yes Yes Yes


4. Special Yes (Exchange Yes No No No

Promotion offer )

5. Joint No Yes No No No

6. Media Hoardings,print, Hoardings, In Print & Hoardings, In Print,

used electronic store electronic store electronic,
(SMS, Email, media, hoardings, In
POP Hoardings, In store
7. Price off, free Lucky draw, gift vouchers, Discounts, Cause related
Future outlook
Apparel sector is likely to grow with growing Indian economy. Many multinational
players either have already plunged into Indian market or plan to do so in apparel
sector. They will bring many promotional practices which they have been following
in developed markets which will increase the use of sales promotion activities even
further. Indian brands will have to withstand turbulent conditions and learn to survive.
If the role of such activities is understood well it may help any player a long way to
survive and grow.

Retail Touch Points:

 Pull preferred over Push:
A “pull” supply chain driven by actual consumer demand is preferable to a “push” supply
chain driven by manufacturer and retailer promotion. Customers who are used to literally
having the world at their fingertips, thanks to the Internet and personal electronic devices,
are no longer interested in being told what products to buy.
Using tools such as secure Web portals, insight-driven retailers propagate current
consumer demand data throughout the supply chain, enabling maximum responsiveness
and agility. This, in turn, increases customer satisfaction levels and market basket sizes,
as well as decreases the amount of unsold inventory in the supply chain and even levels
of “safety stock.”
 Localized Product Assortments:
By localizing the merchandising and assortment plans at the individual store level, a store
can reap significant intangible benefits, such as improved customer satisfaction levels, as
well as tangible benefits, such as higher margins and increased basket sizes.
Retailers who embed customer SKU preferences into their profiling, forecasting and
optimization practices can improve the accuracy of buying and allocating merchandise,
creating 5 to 10 percent improvements in gross margin dollars and improved inventory
 Space Optimization :
It allows retailers to use every square inch of selling space to its maximum profit
potential. Optimization systems take in information such as store sales, customer
preferences and product sizes to produce space plans based on business rules, forecasted
demand, and profit potential. Assortment plans can thus be executed in a manner that
maximizes the sales potential of floor selling space.

Source: 1) Article from Oracle Retail by Dave Boyce.

What is CRM ??
What ever the customer buys for him, Every experience should be completely
satisfactory, some delightful. Best CRM strategies should be implemented helping the
customers to save the money, time and heartburn by providing comprehensive customer
reviews at a click. CRM stands for Customer Relationship Management. It is a process
or methodology used to learn more about customers' needs and behaviors in order to
develop stronger relationships with them. There are many technological components to
CRM, but thinking about CRM in primarily technological terms is a mistake. The more
useful way to think about CRM is as a process that will help bring together lots of pieces
of information about customers, sales, marketing effectiveness, responsiveness and
market trends.
Dimensions of CRM:
• Identifying the customers
• Acquiring the customers
• Retaining the customers
A store should be customer-oriented - the technology, the supply chain, the design -
everything should be geared to making the buying experience as good as possible. Also
employees should be trained in much better way because if the employees will be loyal
only then customers can be loyal. Loyal employees help bring in the business.
Foremost thing for better CRM: Getting value out of real time customer
Today, retailers spend an excessive amount of time and money collecting, analyzing and
trying to utilize customer data by turning it into information and knowledge that is
actionable. Loyalty programs have allowed retailers to collect and analyze vast quantities
of data on purchases by individuals. E-retailing has added to the avalanche of data.
While this information is essential to understanding changing customer needs and
expectations, it's important that the systems you use to gather this information are
efficient and cost-effective. Now a days many retail outlets are using the IT advisory
services that will enable them to gather and evaluate critical customer information, assess
customer requirements and develop customer plans and strategies.


Every business organization depends on customers for sustenance, the question is how to
create and maintain customer satisfaction. Every business communicates with their
clients in many different ways, especially in our technology rich and information based
society. How we treat all of this information is where CRM plays a key role. CRM acts as
a central repository of information on clients and potential clients of any store.
Customer Relation-Profile
When mapping the quality of a customer relationship, the following model is being used
symbolizing the communication and co-operation, and the Legs concern the
responsibility and professionalism with which we implement or deliver the competencies
we have agreed upon.

Customer Relations Management (CRM) and Technology in Retail

Over the years as the consumer demand increased and the retailers geared up to meet
this increase, technology evolved rapidly to support this growth. The hardware and
software tools that have now become almost essential for retailing can be into 3 broad
 Customer Interfacing Systems
 Bar Coding and Scanners
Point of sale systems use scanners and bar coding to identify an item, use pre-stored
data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a
new concept where the consumer pushes the full shopping cart through an electronic
gate to the point of sale. In a matter of seconds, the items in the cart are hit with laser
beams and scanned. All that the consumer has to do is to pay for the goods. The new
developments create an easy way for users to generate bar codes on demand for asset
tracking, compliance labeling, document tracking, and other business productivity
RFID (Radio Frequency Identification) is now the buzzword in retail. It is real time
tracking of every single product, from manufacture to checkout and compared to
Universal Product Code (UPC) bar coding, which RFID promises to replace, RFID
proactively transmits information, eliminating the manual point-and-read operations
needed with bar coding. This enhanced visibility could significantly decrease
warehouse, distribution, and inventory costs; increase margins; and enhance customer
The macro-areas where RFID can be utilized are:
 EAS (Electronic Article Surveillance) systems: The use of tags and
antennas usually inside a retail setting for tracking articles.
 Portable Data Capture systems: portable RFID systems that can be used
Networked systems: fixed position readers those are directly connected to centralized
information management system, while transponders are placed on moveable items.
 Positioning systems: Used for automated location identification of
tagged items or vehicles
 Payment
Payment through credit cards has become quite widespread and this enables a fast and
easy payment process. Electronic cheque conversion, a recent development in this area,
processes a cheque electronically by transmitting transaction information to the retailer
and consumer's bank. Rather than manually process a cheque, the retailer voids it and
hands it back to the consumer along with a receipt, having digitally captured and stored
the image of the cheque, which makes the process very fast.
 Internet
Internet is also rapidly evolving as a customer interface, removing the need of a
consumer physically visiting the store.

 Operation Support Systems

 ERP System
Various ERP vendors have developed retail-specific systems which help in integrating
all the functions from warehousing to distribution, front and back office store systems
and merchandising. An integrated supply chain helps the retailer in maintaining his
stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs,
while servicing the customer better.
 CRM Systems
The rise of loyalty programs, mail order and the Internet has provided retailers with real
access to consumer data. Data warehousing & mining technologies offers retailers the
tools they need to make sense of their consumer data and apply it to business. This,
along with the various available CRM (Customer Relationship Management) Systems,
allows the retailers to study the purchase behavior of consumers in detail and grow the
value of individual consumers to their businesses.
 Advanced Planning and Scheduling Systems
APS systems can provide improved control across the supply chain, all the way from
raw material supplier’s right through to the retail shelf. These APS packages
complement existing (but often limited) ERP packages. They enable consolidation of
activities such as long term budgeting, monthly forecasting, weekly factory scheduling
and daily distribution scheduling into one overall planning process using a single set of
 Strategic Decision Support Systems
 Store Site Location
Demographics and buying patterns of residents of an area can be used to compare
various possible sites for opening new stores. Today, software packages are helping
retailers not only in their locational decisions but in decisions regarding store sizing and
floor-spaces as well.
 Visual Merchandising
The decision on how to place & stack items in a store is no more taken on the gut feel
of the store manager. A larger number of visual merchandising tools are available to
him to evaluate the impact of his stacking options.
The essence of this process is mutually to discover weak, strong and wanted sides of the
organizations, in order to improve future relations. Using the Customer Relation Profile,
organization should be able to identify the terms of relationship with others and the
profile will indicate what to focus on if organization want to develop it further. If
organization want an "easy to use tool" to realize how organization can maximize
business relations, this is the tool for organization and organization.

Customer Loyalty:
It is becoming more and more evident to retailers that the customer shopping experience
is a critical pathway to the financial success of the store. Setting aside unique location or
competitive differences, stores with higher levels of customer loyalty should see higher
same store sale increases year over year. Likewise, over a long period of time, bad
customer service will result in brand and profitability erosion.
Loyalty is most influenced by the shopping experience and the brand (the cumulative
impact of many experiences over time). There are a lot of components to the shopping
experience such as availability of parking, store cleanliness, friendliness and helpfulness
of sales staff, easily located products, and checkout experience.
It is not surprising that the personal interaction of store associates is a significant
component of driving loyalty. Even in today's self-service retailing environment,
customers still need to be guided into finding the right products. Without that help and
support they become easily frustrated, and eventually shop at the competition.
As busy consumers, we all face time and cost trade-offs. Surprisingly, price is an
element we do not find to be a significant driver of loyalty. Not that pricing is
inconsequential or immaterial to the consumer's choice of where to shop, but if price
were the only thing driving loyalty we would all be frequenting garage sales and flea
There is nothing worse than having a great shopping experience, finding exactly what
you want, and then being held hostage by the checkout process. Retailers figuring out
the best ways to make the checkout process more effective through the use of
technology are the most successful in the long run.
One way to take action on customer feedback would be to develop training programs
geared toward those responsible for fostering the customer experience in the store.
These programs would teach what actions are necessary to improve low scores. It is not
until a store is confronted with unacceptable scores that they take the time to understand
what to do with the customer feedback information.

Literature Review:
Several studies on CRM and apparel retail sector are reported in the context of developed
markets. A brief overview is presented below:
According to Pine and Gilmore (1999) experiences can be described by two dimensions.
The first dimension refers to the customer’s degree of active participation in the creation of
the experience. The second dimension of experience describes the degree to which the
customer adsorbs or immerses the experience.
Bitner and Zenithal (2003) stated that satisfaction is the customer’s evaluation of a product
or service has met their needs & expectations.
In the recent information Week survey, of the companies actively implementing CRM, 93
percent claimed increased customer loyalty and customer Satisfaction would justify their
CRM investment. The Second highest percentage, 83 percent, stated the need to
demonstrate increased revenue. The implied, mandate for most of these early adopters
seems to be “customer loyalty at any cost-even is we don’t see a return on investment.”
Peppers and Rogers (1993) stated that to build the relationships with your individual
customers, you need to sell maximum products over a long period of time and across
different product lines.
Deeter-Schmelz, Dawn R.; Moore, Jesse N.; Goebel, Daniel J, (2000) examined Prestige
clothing shopping by consumers by a confirmatory assessment and refinement of the
PRECON scale. Aspects studied include background on the symbolic aspects of
consumption; prestige shopping behavior; reassessment and refinement of the PRECON
scale and impact of income and age on prestige shopping. The paper concludes with
managerial implications for the United States apparel retailers dealing in prestige
Kincade, Doris H.; Woodard, Ginger A.; Park, Haesun (2002) studied Buyer–seller
relationships for promotional support in the apparel sector which is critical for success.
The purpose of the study was to define promotional support categories offered to apparel
retailers by manufacturers, to identify the retailer's perceptions of the offering frequency
and importance of the promotional support, and to investigate the relationship between
offering frequency and perceptions of importance. Results indicated that monetary
support was regarded as the most important promotional support.. A positive and
significant correlation was found between items the buyers perceived as important and the
frequency of offerings of these items.
Liu, Yuping, (2007) found out the Long-Term Impact of Loyalty Programs on Consumer
Purchase Behavior and Loyalty. Using longitudinal data from a convenience store
franchise, the study found out that consumers who were heavy buyers at the beginning of
a loyalty program were most likely to claim their qualified rewards, but the program did
not prompt them to change their purchase behavior. In contrast, consumers whose initial
patronage levels were low or moderate gradually purchased more and became more loyal
to the firm. For light buyers, the loyalty program broadened their relationship with the
firm into other business areas. Thus there is a need to consider patronage to decide
rewards for loyalty programmes.
In the context of French market, Meyer-Waarden, Lars; Benavent, Christophe. (2006)
studied the Impact of Loyalty Programmes on Repeat Purchase Behaviour based on the
Behavior Scan single-source panel which has been compared with the store data base .
The double jeopardy phenomenon was present and loyalty programmes did not
substantially change market structures. When all companies had loyalty programs, the
market was characterized by an absence of change of the competitive situation.
Hyllegard, Karen; Eckman, Molly; Descals, Alejandro Molla; Borja, Miguel Angel
Gomez (2005), studied Spanish consumers' perceptions of US apparel speciality
retailers' products and services. The study emphasized that speciality retailers' success in
international markets is contingent upon their knowledge of culturally-defined values,
norms and behaviour that influence consumer decision making and impact acceptance of
products and services. The study examined consumers' store patronage and apparel
purchase behaviour, acceptance of US apparel brands, perceptions of retailers' products
and services, and perceptions of the impact of foreign retailers on local communities. It
found out that the perceptions differed regarding quality, fashionability, product
assortment, extent and quality of customer service, convenience of location, payment
options, national brands and store layout. Consumers' acceptance of US apparel brands
was a function of age, household income, apparel product country of manufacture and
2. Hyllegard, Karen; Eckman, Molly; Descals, Alejandro Molla; Borja, MiguelAngel
Gomez., ”Spanish consumers' perceptions of US apparel speciality retailers' products and
services “Journal of Consumer Behaviour, Sep2005, Vol. 4 Issue 5,
p345-362, 18p, 7 charts.
3. Kincade, Doris H.; Woodard, Ginger A.; Park, Haesun,”, International Journal of
Consumer Studies, Dec2002, Vol. 26 Issue 4, p294-302, 9p.
4. Liu, Yuping,” The Long-Term Impact of Loyalty Programs on Consumer Purchase
Behavior and Loyalty,” Journal of Marketing, Oct2007, Vol. 71 Issue 4, p19-35, 17p.
5. Meyer-Waarden, Lars; Benavent, Christophe,” The Impact of Loyalty Programmes on
Repeat Purchase Behaviour,” Journal of Marketing Management, Feb2006, Vol. 22 Issue
1/2, p61-88, 28p.
6. Lara, Pedro Reinares.,” Exploring the Benefits Obtained in a Loyalty Programme
applied to Retailing,” European Retail Digest, Winter2005 Issue 48, p48-52, 5p.
7. Deeter-Schmelz, Dawn R.; Moore, Jesse N.; Goebel, Daniel J.,” prestige clothing
shopping by consumers: a confirmatory assessment and refinement of the precon
scale with managerial implications”, Journal of Marketing Theory & Practice,
Fall2000, Vol. 8 Issue 4, p43, 16p.
8. “Consumer Lifestyles in India” Euromonitor, International Consumer Lifestyles
9. “Global Apparel, Accessories and Luxury Goods” Datamonitor, (2006)
10. Zeithaml, V.A., (2000). Service quality, profitability, and the economic worth of
customers: Wwhat we know and what we need to learn. Journal of the Academy of
Marketing Science 28(1), 67-85
11. Sweat, Jeff. “Lots of companies are thinking about customer relationship management,
But progress can be very slow-CRM under scrutiny.” Information Week via COMTEX
online, September 15,2000.
12. Peppers, Don and Martha Rogers. Ph.D., The one to one future: Building
Relationships One Customer At a Time. New York:Doubleday,1993
Research objectives
The survey was conducted among the customers shopping in the mall.
 To do the comparative analysis of different Lifestyle Stores on different store dimensions.
 To study the perception of customers towards the CRM strategies implemented by the different
Lifstyle Stores.
 To study the association between the Customer’s Services & the Customer Loyalty.
 To get an insight of the Retailer’s perspective towards the customer’s expectation in
terms of CRM

The research instrument

The research instrument used was developed to measure both the expectations and perceptions of the
customers of the Lifestyle Stores. The two questionnaire were developed hypothesis were formulated to
reflect the associations between the different Lifestyle Stores and the customer service offered by them.
Also to evaluate the different Gender’s opinions towards the Customer services they are getting from the
lifestyle stores & to evaluate the retailer’s perception about the customer’s expectations. The main body of
the questionnaire included 11 questions reflecting customer service, identification, differentiation,
interaction and customization. Use was made of a five-point Likert scale.
Structured questionnaires, to measure the respondents’ perceptions and expectations, were distributed to the
people in a mall. A total of 200 questionnaires were distributed to the people.

Statistical analysis
The statistical treatment of the study included the determination of the association between the steps
in the CRM model and the customer service offered by the organization. Use was made of Pearson’s
coefficient to determine the level of association between the store attributes, customer service & the
customer loyalty.
The level of association as measured by Pearson’s co-efficient falls between -1.0 and +1.0, which indicates
the strength and direction of association between the two variables.
The measure was standardized through computation of reliability & validity. T-test was applied in order to
compare significant difference between the store attributes of different lifestyle store.
Qualitative Analysis of the Retailer’s Perspective was done to get an insight of their perception towards the
customers expectations & to study the CRM strategies implemented by them esp. the applications of IT.
The companies serve two types of consumers: for the practical consumer, they provide sensible
and affordable clothing whose styles will not change drastically from year to year, and for
the fashion-conscious consumer, industry types will attempt to provide styles of clothing
that will keep up with the current season’s trends and for which they are able to command
a price premium.
The apparel industry exists in a very competitive environment where companies need to adopt new
technologies in order to improve profitability and lower costs.

One can come to the conclusion that the designer clothing industry is pretty volatile and subject to unpredictable
swings which is reflected in the quality.

The brand’s recent revival was a result of several key strategic plans. Key strategic initiatives included: “the much-
valued positioning as a lifestyle brand, flagship stores and presence in high-end department stores,
expansion of licenses into areas such as watches and sunglasses and a product mix toward accessories and
gifts. For consumers Luxury means exclusivity. The store focuses on accessibility while maintaining its
exclusivity and protecting its tradition and heritage while striving to be innovative and inspiring.

The luxury goods industry is unique in a sense that it relies solely on promotion and marketing to sell products and
not so much on product attributes but on the individual images certain brands convey. It is also an industry
that is well guarded and difficult to find any information on. However

the lifestyle stores are is very fascinating and the products themselves signify prestige and status.
But every customer has a different perception Although a select few are able to afford luxury goods, the vast
majority of people who are exposed to advertisements for certain products generally have aspirations of
being able to own these products someday.

The demand for Apparels are affected by general economic trends

The lifestyle stores find customer loyalty to be of utmost importance and would do almost anything to attract new
customers while trying to keep existing customers.
In the past three years, luxury goods brands have been broadening their appeal to a wider consumer base. An
example of this would be the
Consumer’s make a use of internet, companies have realized the importance of e-commerce and how the Internet
can be advantageous for Lifestyle Stores to create and reinforce their brand image and at the same time
increasing brand awareness.
It is an idea of status and exclusivity that makes these brands sought-after by people from many different walks of
life. For the wealthy, luxury goods reinforce their status as a member of the upper class, but for everyone
else luxury goods are items that many aspire to be able to own someday. The allure for many designer
products is people’s desire for wealth and status, which is ultimately the end product that is consumed.

The study is exploratory in nature with survey method being used to complete the study.
Both Exploratory & Causal Research Design were taken
Research objectives:
The survey was conducted among the customers shopping in the mall.
 To do the comparative analysis of different Lifestyle Stores on different store dimensions.
 To study the perception of customers towards the CRM strategies implemented by the different
Lifstyle Stores.
 To study the association between the Customer’s Services & the Customer Loyalty.
 To get an insight of the Retailer’s perspective towards the customer’s expectation in
terms of CRM

The Research Instrument

The research instrument used was developed to measure both the expectations and perceptions of the
customers of the Lifestyle Stores. The two questionnaire were developed hypothesis were formulated to
reflect the associations between the different Lifestyle Stores and the customer service offered by them.
Also to evaluate the different Gender’s opinions towards the Customer services they are getting from the
lifestyle stores & to evaluate the retailer’s perception about the customer’s expectations. The main factors
in such a study were customer demographics, the presence of competition, physical store
characteristics, sales promotions, quality, CRM technologies and the characteristics of Customer
Service Representatives etc.
The main body of the questionnaire included 11 questions reflecting customer service, identification,
differentiation, interaction and customization. Use was made of a five-point Likert scale.
Structured questionnaires, to measure the respondents’ perceptions and expectations, were distributed to the
people in a mall. A total of 200 questionnaires were distributed to the people.

Statistical analysis
The statistical treatment of the study included the determination of the association between the steps
in the CRM model and the customer service offered by the organization. Use was made of Pearson’s
coefficient to determine the level of association between the store attributes, customer service & the
customer loyalty.
The level of association as measured by Pearson’s co-efficient falls between -1.0 and +1.0, which indicates
the strength and direction of association between the two variables.
The measure was standardized through computation of reliability & validity. T-test was applied in order to
compare significant difference between the store attributes of different lifestyle store.
Qualitative Analysis of the Retailer’s Perspective was done to get an insight of their perception towards the
customers expectations & to study the CRM strategies implemented by them esp. the applications of IT.

Discussion of the specific findings

H1: Identifying new and existing clients increases the level of customer service.
H2: Differentiating between the services offered to new and existing clients increases the level of
customer service.
H3: The level of customer service is increased if there is an active interaction with potential and
offered according to each
individual client’s needs.
1) Occupation * How often do you make your purchase of Apparels?
Cross tabulation

How often do you make your purchase of

Twice in a Occasionall
Weekly Monthly Month y Total
Occupation Business 8 24 6 25 63
Service 7 53 21 6 87
Student 4 9 2 35 50
Total 19 86 29 66 200


Frequency Percent Valid Percent Percent
Valid Business 63 31.5 31.5 31.5
Service 87 43.5 43.5 75.0
Student 50 25.0 25.0 100.0
Total 200 100.0 100.0
• The service class people prefer to make the purchase of apparels monthly i.e.
• The business class people prefer to make the purchase of apparels occasionally
but sometimes monthly too.i.e.31%
• While a student prefer to make the purchase of apparels occasionally.i.e.25%
1) Income * How often do you make your purchase of Apparels?
Cross tabulation

Count How often do you make your purchase of Apparels?

Twice in a
Weekly Monthly Month Occasionally Total
Income <12 K 3 5 2 29 39
12-18 K 2 20 2 6 30
18-30 K 6 34 19 3 62
>30 K 8 27 6 28 69
Total 19 86 29 66 200

Frequency Percent Valid Percent Percent
Valid <12 K 39 19.5 19.5 19.5
12-18 K 30 15.0 15.0 34.5
18-30 K 62 31.0 31.0 65.5
>30 K 69 34.5 34.5 100.0
Total 200 100.0 100.0

• People from income group of 18-30 K prefer to make the purchase of apparels
monthly i.e. 31%.
• People from income group of >30 K prefer to make the purchase of apparels
• People from income group of <12 K prefer to make the purchase of apparels
occasionally i.e.20%.
• People from income group of 12-18 K prefer to make the purchase of apparels

2) Gender * Do you owe Loyalty Cards?

Cross tabulation

Do you owe Loyalty Cards?
Yes No Total
Gender Male 74 30 104
Female 69 27 96
Total 143 57 200

Frequency Percent Valid Percent Percent
Valid Male 104 52.0 52.0 52.0
Female 96 48.0 48.0 100.0
Total 200 100.0 100.0

• Out of 104, 74 Male respondents have the loyalty cards of different lifestyle
• Out of 96, 69 Female respondents have the loyalty cards of different lifestyle


Females are prone to shopping that is why maximum females have loyalty cards.