Professional Documents
Culture Documents
Mr. Tapas RanjanMoharana
**
Mr. NiharMohapatra
***
Today Customer Relationship Management (CRM) has become a strategic initiative in most
companies. Reason being the growth of service sectors in general and growth of Organized
Retail in particular, advancement of digital technology, the shift among companies from market
share to share of wallet. CRM to some scholars and professionals means relationship marketing
& loyalty programme, to others data mining and analytics, and to still others, it means a
philosophy and way of life for the company to deliver customer satisfaction. The smart company
works for customers. They have a long term approach to business. Customer retention is the
purpose of their business. Profit is just the by-products. The challenge of CRM is not to build
customer loyalty, it is the fact the reverse: to build customer loyalty, it is in fact the reverse: to
build the organizations loyalty to the customer. You cannot retain customers if they are not
happy with your product or overall experience offered. Thus, a combination of customer delight
& loyalty is essential. If you want your company to remain a market leader, focus on customer
loyalty. This can be achieved by employing the mantras of appraisal, reward, and campaign. In
this paper an attempt has been made to study the significance CRM in organized retail sector.
How to make a successful CRM strategy /model for organized retail sector?
Key words: Customers Relationship Management( CRM), Customer Loyalty, Customer
Retention, Customer delight.
the business enterprise has two and only these two basic functions: marketing and
innovation
-Peter Drucker, Management (1973),
Retailing is becoming the blue-eyed sector of the new emerging LPG economy employing nearly
21 million people and generating revenues of approximately Rs. 9,30,000 Crore. Organized
retailing accounts only 3-4 percent of the entire retailing activities in the country. Standing on the
threshold of a retail revolution and witnessing a fast changing retail landscape, India is all set
experience the phenomenon of a global village India presents a grand opportunity to the world at
large, to use it as abusiness hub. To attract customers, organized retail stores need to generate
value and differentiate their outlets from otherunorganised retail stores. As rightly said, Retail
is Detail so organized retail players need to target their markets and manage the customer
experience in best possible ways.
This study analyzes the various factors that determine the customer experience in retail outlets.
The study identifies strategies to retain and attract more customers by creating a memorable
shopping experience. Every one of us does render some service or other. If we cultivate the habit
of doing this service deliberately our desire for service will steadily grow stronger, and will make
not only our own happiness but that of the world at large.
Retail, according to Concise Oxford English Dictionary is the sale of goods to the public for use
or consumption rather than for sale. Retailing is the business activities that add value to the
product & services, sold to the customers for their personal or family use. Considered to be one
of the most happening industries after IT, retailing industries has many big players competing
with each other to gain an edge over the other. Owing to a steady increase in private
consumption, retailing has become one of the hottest sectors of the emerging economy
The objectives of the study are:
1. To know the retail scenario in India in a nut-shell.
2. To identify areas for improved customer retention to attract new customers by offering a
perfect environment to shop.
Methodology:
For this study a structured questionnaire has been developed and administered among the
customers who visit the Formats of Pantaloon future group, Vishal Mega Mart &Subhiksha,
Mother Diary, Shoppers Stop, Spencer & Reliance Fresh in NCR region of Delhi, Noida,
Gurgaon from January March 2008. Total number of sample taken is 250.
Sampling procedure applied for the study are conveniences sampling particularly the customers
who visited the store during the time of survey and randomly from the different formats of
organized retail available the scope of the study.
Retail Scenario in India:
Retail innovation has been unprecedented in the last decade of the twentieth century. Lee and
Vryza argued that retailing had not only .been a highly innovative force in the Market place
(1994, p.54) but also had a much wider impact on society overall. However they expressed
concerned about the dearth of literature on retailing innovation, in contrast to areas where a
richer body of work had developed. Merrilees and Miller (1996) reviewed the dramatic
transformation retailing in Australia from 1946 onwards. They discussed innovative retail
formats and what they termed the ever-changing nature of retail competition (1996, p.18).
Retail innovation will be manifested in a variety of forms. Such formats range from minor
changes in the retail mix, through minor and major makeovers, related and unrelated brand
extensions, novel combinations such as supermarketsand in-store banking, and new service
delivery systems such as online retailing. An important paper by Rosenberger III Merrilees and
Miller (1999) proposes a new typology for retail innovations, with seven types classified. These
include brand extensions within an allied field (McCafe by McDonalds) and brand extensions in
an unrelated field.
Retailing is evolving into a global high-tech business. Retail is on a roll in India. The entry of
global retailers will change the landscape of retail in India. India has emerged as the most
attractive destination for mass merchants outperforming China for the second year in row,
according to global consulting firm A.T Kearney. A.T. Kearneys Global Retail Development
Index (GRDI), which ranks 30 emerging countries based on a set of 25 variables including
economic and political risk, retail market attractiveness and retail saturation levels, has retained
Indias position at the top. The Indian retail market is gradually but surely opening up, while
Chinas market becomes increasingly saturated. With the dawn of 21
st
century, as we are in an
economy showing signs of splendid rise during past years and promising the same for the
coming future, retail industry as a whole has been described by many to be a sunrise industry
more specifically in Indian context. One report from IMAGES- KSA Technopak estimates
organized retail in India of worth Rs 350 billion though currently constituting only 3.4 percent of
retail sales promises to grow at over 30% and is projected to cross Rs. 1000 billion mark by
2010. In addition to that India tops A T Kearney list of emerging markets for global retailers to
enter and the Indian economy is also expected to overtake Britain in 2022 and Japan in 2032 to
become the third largest economy in the world after China and US.
The growth of the Indian economy is no manifesting itself in the growing purchasing power of
its citizens. The demand for a variety of goods, both consumables and durables, is expectedly
growing significantly. Easier availability of goods, consequent to lowering of import duties and
liberalization of trade regulations has also added to the appetite for purchases. A ten or twelve
per cent increase in the economys disposable income and a much higher one in urban areas is
also reflecting itself- in the way goods and services are bought and sold. Modern retailing or
organized retailing, in contrast to the traditional small and stand-alone stores which dominate the
Indian Market, is growing today by over 25% annually.
Standing on the threshold of a retail revolution and witnessing a fast changing retail landscape,
India is all set to experience the phenomenon of a global village. India presents a grand
opportunity to the world at large, to use it as a business hub. A Vibrant Economy, India tops A
T Kearneys list of emerging markets for global retailers. The second fastest growing economy
in the world, the 3
rd
largest economy in terms of GDP in the next 5 years and the largest
economy in PPP terms after USA, China, and Japan, India is rated among the top FDI
destinations. India also tops the annual list of most attractive countries for international retail
expansion, according to A.T. Kearneys Global Retail Development Index 2006. It is very rightly
reported that the Indian retail market is gradually but surely opening up, even as other markets
become increasingly saturated. India is at the peak of attractiveness for retailers right now as its
USD 270 billion retail market continues to grow at the rate of 13 percent and all indicators seem
to suggest that there can only be further acceleration from her on. Indias miniscule organized
retail market has gained the momentum required to propel it to the next phase of real rapid
expansion: at prevailing prices, this segment grew 42 percent in 2006.
The Retail Revolution:
Retail revolution, which is happening in India today has one important and inevitable logic, i.e.
with the growth of the country, more people have started buying more things for which products
have to be available and subsequently requiring more shelf space. The landscape of cities are
witnessing many changes in terms of new generation of retail outlets, which are fuelled by huge
sums of money being poured in to real estate, modern logistics and most importantly creation of
new retail brands. It would be important to note that the retailing industry in India is still a
Protected Industry. It is one of the few sectors which still have restrictions on FDI. Given the
current trend in liberalization, it will not be long before the retailing sector is also thrown open to
international competition.
Indian Retail has witnessed rapid transformation in many areas of the business by setting
scalable and profitable retail models across categories. Indian consumers are rapidly evolving
and accepting modern retail formats overwhelmingly. The traditional markets are fast loosing
their shine, making way for new formats such as departmental stores, hypermarkets,
supermarkets and specialty stores. Malls are coming up not just in metros but also in second-
categories cities, introducing the Indian consumer to a shopping experience like never before.
These modern shopping complexes are becoming the destination point for shoppers as well as
window-shopping, entertainment, food, all of it under one roof. In India among 15 million
retailers, most of them owning small mom and pop outlets, we are likely to have no less than 100
million square feet of shopping, centre space by 2007-08, generating retail sales to the tune over
Rs. 50,000crore. Reliance Retail alone is taking about 3.5 to 5 million square feet of retail space
by March 2007, for only one of its retail verticals.
Large corporate groups like ITC, reliance,, Tata, Raheja and existing large retail retailers like
Pantaloon Retail India limited, the jubilant group and others are infusing staggering amounts of
capital into the organized retail sector and at the prevailing pace of development it is estimated
that India will have close to 50million square feet quality retail space by the end of 2007.Like
Wal-Mart has formalized its India entry and other leading global retail power houses are also
busy working out their entry plans, we can safely say that an additional 700 million square feet
of quality retail space from the existing level will be required by 2010 there will be an
investment of over Rs. 20,000crore in quality retail space across the country.
Already, special stores are proliferating, selling everything from books to healthcare and from
home furnishings to apparel. But ultimately it will be the large-format supermarket and
hypermarket stores that will account for the largest share of investment. Industry studies
indicates that todays total of 50 hypermarkets will grow to 1,200 across India by 2011, at which
time there will be 3,000 supermarkets twice as many as there are today. India has witnessed ten-
fold growth in four years, total mall space has increased from just about two million square feet
in 2012 to over 21 million square feet in 2013.
Corporate houses like the Reliance Industries, A V Birla Group, Tata Group, ITC & others have
announced grandiose plans for investment in retail sector; worlds largest retail Wal-Mart also
inked its India entry joint venture deal with telecom major Bharti while Metro is planning rapid
expansion all this should ensure large inflow of funds for the retail sector.
Table-I : Indian Retail Market 2013:
INDIA RETAIL MARKET 2013 (at current Prices)
Retail
Segments
Indian Retail Value
(Rs. Crore)
Organized Retail
(Rs.Crore)
%
Organized
in 2006
Clothing, Textiles &
Fashion 113,500 21,400 18.90%
Jewellery 60,200 1,680 2.80%
Watches 3,950 1,800 46%
Footwear 13,750 5,200 37.80%
Health & Beauty
Care Services 3,800 400 10.60%
Pharmaceuticals 42,200 1,100 2.60%
Consumer Durables &
Home appliances 48,100 5,000 10.40%
Mobile Handsets &
Accessories 21,650 1,740 8.00%
Furnishings, Utensils, 40,650 3,700 9.10%
(Home & Office)
Food & Grocery 743,900 5,800 0.80%
Catering Services
(F&B) 57,000 3,940 6.90%
Books, Music & Gifts 13,300 1,680 12.60%
Entertainment 38,000 1,560 4.10%
Total 1,200,000 55,000 4.60%
(Source: India Retail Report 2014)
Table 1 depicts that food and grocery segment is having maximum Retail value (Rs.743, 9000
Crore) which is followed by Clothing, Textile & Fashion (Rs. 113,500Crore).But the organized
grocery segment is only able to attract 0.8 percent of the totally grocery market.
This indicates the growth of organized retail in grocery items is encouraging & fast moving. On
the other hand footwear segment is having growth rate in 2006 i.e. 37.80 followed by Clothing,
Textiles & Fashion (18.9%) and Books, Music and Gifts (12.60%).
Figure I: Indian Retail Value (Rs. In Crores)
Economic Impact of Indian Retail Sector:
India is the eighth largest retail
market
in the world and is poised for explosive growth. The retail market is growing by leaps & bounds
and is expected to touch USD 637 billion in 2015, with a terrific growth rate of 50 per cent.
Almost half of the Indian retail market in 2006 was in rural areas. The Indian retail industry at
about USD 300 billion, accounts for nearly 37 per cent of Indias GDP. The Retail market is
poised for explosive growth rate of 8 per cent. That does mean higher growth for Indian retail
industry due to increase in disposable.
Indian Retail Value (Rs. Crore)
Clothing, Textiles &
Fashion
Jewellery
Watches
Footwear
Health & Beauty Care
Services
Pharmaceuticals
Consumer Durables &
Home appliances
Mobile Handsets &
Accessories
Furnishings, Utensils,
(Home % Office)
The Indian Retail Opportunity GDP at currentprices (US$ ) in Billion
0
500
1000
1500
2000
2005-06 209-10 201-15
The Indian Retail Opportunity
GDP at currentprices (US$ )
in Billion
Figure II: The Indian Retail Opportunity GDP at current prices (US$)
The high private consumption is one of the major factors for the growing retail industry. Over 62
% of the private consumption share is towards the retail sector, of which 55% is the contribution
from the rural areas, indicating the increasing significance of retail presence in rural areas.
Implementation of CRM in Retail:
The building & management relationship with customers has always been a key approach to
marketing practices in general & retailing in particular. AMA (1995), Relationship marketing is
marketing with the conscious aims to develop & manage long term and/or trusting relationship
with customers, distributors, suppliers, or other parties in marketing environment. A band of
loyalty is likely to develop between shopkeeper and the regular customer. Pathmarajah (1993)
defines relationship marketing as the process where the seller and the buyer join a strong
personal, professional and mutually profitable relationship over a time.
Following are few suggestions in order to maintain long term relationship with the customers in
an organised retail.
1. Retailers have identified generating interest in a uniformed new customer is more
difficult than to retain the existing customer. It is easier to satisfy an existing customer
than to attract a new customer to the store. A satisfied customer is better form of
advertising. A satisfied customer will purchase more and more product from your store.
2. Through retaining a customer your can make a customer satisfied. A satisfied can be
referral to a new customer. Instead of running after new customer to your store you can
make your existing customer retain by which he can be referral to new customer.
3. Good relationship with customers can result in good work of mouth from successful
exchanges and minimal bad work-of-mouth in the event of unsuccessful exchanges.
Service quality cracks can often be papered over where good relationships have existed
previously.
4. Close and long term relationships with the customers imply continuing exchange
opportunities with existing customers a lower marketing cost per customer.
5. Strong customer relationship with a high degree of familiarity and communication on
both sides can generate more practical ideas from customers and contact personnel.
6. Loyalty programme like special discount by issuing loyalty cards in order to provide
them better service and other special benefit if any can be provided to them.
7. The last but not least suggestion to maintain CRM in retail is to think to provide Every
Little Helps to the customer. Think always how are you going to do a better job for
them? No doubt it will change the behaviour of your retail business.
8. Encourage mutual loyalty.
9. Create value to the customers to earn their lifetime loyalty.
REFERENCE:
1. Levy, Michael &Weitz, Barton A. (1995) Retailing Management, United States of
America, IRIWIN.
2. Indian Retail Report (2007) Images F&R Research, Images Multi Media Pvt. Ltd. Delhi.
3. Gilbert David, (2004) Retail Marketing Management, Pearson Education, Delhi.
4. Gupta, S.L (2007), Retail Management, an Indian Perspective, Text & Cases, Wisdom
Publication, Delhi.
5. Lamba, A J. (2003), The Art of Retailing, Tata McGraw Hill, New Delhi.
6. Ogden R. James & Ogden T. Denise, (2005) Integrated Retail Management Indian
Adaptation Biztantra, An imprint of Dreamtech Press, New Delhi.
7. Seth Rakesh& Seth Kirti, Creating Customer Delight, The how and why
8. Underhill, Paco (2004), Call of the Malls, Simon & Schuster, New York
9. Levy, Michael &Weitz (2003), Barton A, Retailing Management, Fifth Edition, Tata
McGraw Hill Publishing Company Limited, New Delhi
10. Pradhan, Swapna (2007), Retailing Management, Text & Cases, Second Edition, Tata
McGraw Hill Publishing Companies, New Delhi.
Web references:
a. www.retailyatra.com
b. www.about.retailindustry.com
c. www.imagesretail.com
d. www.ibef.org
e. www.businessworld.com
f. www.domain-b.com
OBJECTIVE OF CRM IN RETAIL
TO STUDY THE CURRENT PRACTICES OF CRM IN RETAILING.
TO FIND OUT THE IMPACT OF CRM ON THE RETAIL SHOPS.
TO STUDY THE FACTORS AFFECTING THE CRM PRACTICES.
TO STUDY THE METHODS AND TOOLS FOR IMPLEMENTING CRM IN RETAIL
SECTOR.
TO STUDY THE NECESSITY OF CRM IN RETAIL SECTOR AS WELL AS
SUGGESTING THEM THE WAYS FOR SUCCESSFULLY IMPLEMENTING IT.