Managing CRM Program in

Organized Retail in India

PRESENTED BY A R PA N K H U R D E L I A I E 2 0

GROUP - 12

MOHIT ASSUDANI IE51

R A H U L R AWAT I E 6 6
ROHIT KUMAR SINGH IE73
SILKY KHURANA IE86

Retailing
Retailing is a distribution channel function, where one
organization buys products from supplying firms or
manufactures products themselves, and then sells these directly
to consumers.

Forms of Retailing
Convenience stores

Discount stores
Factory/company outlets
Specialty stores
Supermarkets
Department stores
Hypermarkets

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

Characteristics
Highly unorganized and & fragmented industry
Linkages with the economic growth (18% to GDP and 8% employment)
Rural and urban divide
Emergence of multiple retail formats
Long supply chain
Working capital intensive

Generating employment opportunities

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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.
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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

Sunday, November 09, 2014

GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

Customer Retention-Retail
Discount pricing
Attractive variants of products and services
Loyalty programs
Offers
Attractive service

Customer Defection-Retail
Poor servicing
Quality issues
Few variants
Billing/Queuing issues
Facility location
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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

Customer Relationship Management

Recognizes that the customer, rather than individual purchases
or contracts, is the source of value to the firm
Focuses on customer acquisition and retention
Highlights repeat purchase and loyalty over time as key
goals
Recognizes the importance of customer satisfaction
Requires customer data to forecast their response to
potential offerings and manage customers over time

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GROUP 12 | MANAGING CRM PROGRAM IN

ORGANIZED RETAIL IN INDIA

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Customer Relationship Management

Relating with few customers
Emphasizes sales force
Usually B-to-B

Relating with many customers

Emphasis is on purchase history

Often, though not always B-to-C

With retail consumers (i.e. many customers)

The retailer must be able to customize the product or price or service
offering
The retailer must be able to address consumers individually

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CRM OBJECTIVES
Create loyal purchase behavior
Customize product and price offerings to target
customers
Consumer Targeting Continuum

Mass
Marketing

Segment
Marketing

Niche
Marketing

MicroMarketing

Increase customer lifetime value

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CRM PROGRAMS
Card programs
Discount
Credit
Membership

Specific examples
Catalina coupons catalina marketing
Collaborative filtering (recommenders) flipkart.com
Virtual model landsend.com

How can the retailer reward loyalty rather than

purchase volume?
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CRM LOYALTY PROGRAMS

Loyalty programs are set up to reward customers with
incentives such as discounts on purchases, free food, gifts,
or even cruises or trips in return for their repeated business.
Retailers use them for three reasons:
to retain loyal customers
to increase loyalty of non-loyal customers
to collect information about them and what they buy
Loyal customers are the source of most profits
Less price sensitive
More purchases per customer higher share-of-requirements

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CRM RETAIL CUSTOMER DATA

Customer Relationship Management
(CRM) is enabled by the gathering
and warehousing of consumer data
Retailers gather customer data from:
Frequent shopper or shopper
loyalty cards
Store credit cards
Identifiable tender

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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CRM RETAIL CUSTOMER DATA

Retail customer databases are
organized collections of data about
individual consumers including:
Geographic
Demographic
Behavioral data
Purchase histories
Appended behaviors
Databases may enable retailers to gain a
competitive advantage
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GROUP 12 | MANAGING CRM PROGRAM IN

ORGANIZED RETAIL IN INDIA

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CRM RETAIL CUSTOMER DATA

Most leading retailers use card programs

89% of retail leaders in the practice of CRM use card

programs (Progressive Grocer, 2001)
However, retailers are not using the resulting data effectively

The retailers have collected all of this frequent shopper data,

but few, if any, attempts have been made to mine the
opportunities that it probably presents. (Shulman 2003)
Issues

How can retailers better exploit consumer data?

How can it be used for targeted marketing offers?

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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CRM DATA WAREHOUSING

Data warehousing is the coordinated and periodic
copying of data from various sources, both inside and
outside the enterprise, into an environment ready for
analytical and informational processing.

Wal-Mart makes good use of its data warehouse. It

should. Experts estimate that it is second in size to
that of the U.S. government

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CRM DATA MINING

Data mining is the process by which insights are
derived from vast amounts of data, such as that
contained in a data warehouse.
Statistical algorithms are applied to customer data to
identify merchandise buying patterns and relationships.

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CRM MARKET BASKET ANALYSIS

A market-basket analysis is uses data mining techniques to
determine what predominant categories individual consumers
are buying.
Based on these analyses, Big-Bazaar has changed the
traditional locations of several items:
Since bananas are the most common item in Indias grocery carts, they
sell bananas next to corn flakes (to help sell more cereal) as well as in
the produce section.
Tissues are in the paper-goods aisle and also positioned among the
cough and cold medicines.

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GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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RETAIL CRM ISSUES

How does the retailer respect the shoppers privacy while
gathering information to respond more effectively to that
customer?
What does the retail shopper get out of CRM? Why should
(s)he give is the retailer information about (her-)himself?
Should the retailer offer different levels of price or service?
What is the advantage of uniformly high prices or customer
service?
What is the appropriate level of customization? How much
does the retailer gain by individual, rather than store-specific
offers? At what cost?

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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

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Applications of Analytical CRM

Campaign management and analysis

Price Optimization

Customer segmentation

Customer Satisfaction Growth

Customer satisfaction measurement

Product Development

Sales Coverage Optimization

Fraud Detection

Financial Forecasting

Risk Management

Program Evaluation

Contact Optimization

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Impact of Analytical CRM

Customer

Customer

Customer

Acquisition

Retention

Information

Cross-Selling
Up-Selling

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Retain current
customers

Offer key
information to
customers
effectively

GROUP 12 | MANAGING CRM PROGRAM IN ORGANIZED RETAIL IN INDIA

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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

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Future Trends in CRM

Products in accordance with customers mindset

More action than transaction

Smart shopping
International players
Social CRM

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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

Thank you!
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