Question

Discuss and explain the concept of Customer Relationship Management (CRM) in today’s retailing environment. What role and responsibilities does employee have in building and maintaining customer relationships? Illustrate suitably.

06 Feb 2018
Answer :
Word Count : 1375

A retailer’s relationship with their customer is key to repeat store visits, brand loyalty and ultimately sales conversions.

But how do you go about creating a winning formula? How can you engage consumers in today’s multi-channel environment, be it through a website, social media channels or in store, to keep them coming back?

Customer Relationship Management (CRM) in retail isn’t a new concept, but it’s one that could help retailers win the battle for

sales in these competitive times. Tesco introduced their loyalty Clubcard in 1995, collecting data on shoppers and using the

information to personalise discounts and rewards. Fast forward 21 years and the majority of retailers offer some kind of reward or loyalty program with Marks & Spencer being the latest to launch their Sparks card, a new ‘Members Club’ which includes bespoke offers and priority access to sales for those that sign up.

It’s no longer enough to have a bricks and mortar store and hope that people will visit and spend their hard earned cash on impulse buys. Customers need to be enticed in to the store, given a reason to visit and a reason to stay and shop. Retailers need to create a welcoming environment as well as an experience for their customers.

Having an accurate retail CRM database that is focused on the customer is an integral part of the jigsaw for any retailer. Consumers are savvy, demanding and often in a hurry, so a successful retail CRM system will pay dividends when it comes to building loyal customers. Retailers need to think smarter to engage shoppers and create loyalty towards their brand, and to do this they need to know as much as possible about them.

Birthdays? Send a voucher offering a discount once a year. Not seen a customer for a while? Send an email with the latest news and products available. Regular customers? Invite them to an exclusive event.

 

 


Creating brand advocates

Creating brand advocates

A good retail CRM system can help build loyalty, creating brand ambassadors who will happily spread the word about their positive customer experience. Get it wrong and they’ll be even more vocal about a bad customer experience.

There are several ways to collect information to build a successful CRM database. Many retailers ask for an email address when you purchase in-store, others offer the latest news and discounts by signing up

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What is the role of Technology in retailing? Discuss the application areas of technology adoption in retailing and its security issues that ought to be taken care off.

: Small retailers have a lot going on for them. For one, they’re perceived as being trustworthy. Several people visit these stores not just for the products in question, but for the experience of shopping at a place where your name is remembered, your kids are acknowledged, and your requests are met.

 

Perhaps the best way for these small retailers to stabilize themselves is to use these positive reference points. With technology, expansion and wider reach is a possibility, but how do you ensure that the same warmth in customer interaction reflects across multiple channels and stores? In other words, how can you be a mom-and-pop store with a global outreach?

 

Technology enables a situation wherein a machine performs tasks that can be executed repeatedly with a standard set of instructions without getting tired, thus letting the human mind function and focus on what is more important.

 

Especially in retail, technology gives you the platform to better satisfy your customers by helping you concentrate on their needs. And happier customers mean more business.

 

These tools don’t simply reduce your overhead and improve your planning. They’ve become essential tools that can provide you

with a competitive edge to thrive and grow in the market.

Here are seven ways technology can improve your retail business (Application areas)

 

  1. Reduce inventory costs

An inventory control system is now a basic tool for retail management. It allows you to know what merchandise you have on hand and on order, and how many of each item you have received and sold. Once setup, these systems automatically update your database when products sell or move from one location to another—from a warehouse to a store, for example. They also provide a variety of instantaneous data analysis tools to keep track of your business. Once online, every aspect of your stores’ performance is at your fingertips. Select and view products by cost, price, margin, first or last date sold, date received or UPC codes. In minutes you can create new categories with hundreds of subcategories of style, size or color.

 

  1. Improve customer satisfaction

Customers expect you to be able to tell them if you have a product in stock or on order. They don't want to wait while you wander through the storeroom or phone the warehouse. Having an electronic inventory system allows you to answer customer questions with

 

 

3. Automate your inventory control

Electronic inventory control can eliminate over-ordering and under-buying by referring to each store's sales history to calculate the optimum stock levels for each item. You tell the system how many days of supply you prefer—which you can modify, for example, according to the season—and the system will look at past sales patterns to determine when you need to re-order. Your system can also perform "open to buy" calculations that tell you how much to spend on particular store categories for maximum

return.

 

4. Facilitate inventory control

Internal theft and pricing errors can eat up about 4% of retail inventory. A portable terminal offers much greater speed and accuracy than manual counts. The system immediately flags discrepancies with recorded inventory levels and verifies pricing, making it easier to detect pricing errors and missing merchandise on the spot.

 

5. Keep track of your margins

Your inventory control system can suggest pricing and markdowns within your pre-set parameters, and/or track your margins based on the prices you enter. It will also ensure you are always aware of gross margins. Even with special pricing offers, you never lose track of your margins. You can establish different pricing for different stores across geographic regions, for instance, and for preferred customers such as employees or major buyers. You can also pre-set markdowns for end-of-season or other sales. The system continues to track gross margin, including the effects of markdowns and preferred pricing.

 

  1. Improve your forecasting

Automated statistical forecasting systems create far more calculated and accurate demand forecasting. • Past sales data, forecasts, and future orders are all on one system. As a result, more accurate forecasts can be made based on the totality of this information.

 

    • Forecasting systems can reach the desktop of every line manager, bringing chain-wide input (if appropriate) into the process through interactive Web-based applications.
    • Forecasts can then be further adjusted, taking every aspect into account.
    • Automation facilitates fast projections and scenario planning.

 

  1. Adopt a just-in-time relationship with suppliers

Forecasting tools work in tandem with a central database, inventory control and sales systems to tie purchasing more closely to actual customer demand. The result is an opportunity to reduce inventory and adopt a just-in-time relationship with suppliers.

 

The Top Security Challenges Facing Retailers

 

Retailers are increasingly using technology such as in-store Wi-Fi and Internet of Things (IoT) initiatives to improve the customer experience. This can be a huge differentiator for the retailer, but can also lead to unanticipated security challenges – something retailers should be especially wary of in light of seemingly daily news of data breaches. Through advanced threat monitoring, Zensar has identified the top vulnerabilities that retailers should be aware of to safeguard their business and protect custo mers from threats.

 

  1. Wi-Fi – Many retailers are leveraging public Wi-Fi to both offer a convenient service to their customers, and in an effort to increase sales and gain valuable customer data. At many organizations, Wi-Fi is in “set it and forget it” mode. Wireless networks are also often deployed and managed by the marketing team, and lack of oversight from the IT department can have major consequences, as these networks may be unencrypted and dangerous. Wi-Fi should be properly secured and consistently monitored.

 

  1. Internet of Things – Research firm Markets and Markets found that the retail IoT market will be worth more than $35 billion by 2020, as retailers invest in IoT to manage inventory, track theft and loss, enable mobile payments, provide shopper

intelligence, and create insights for advertising and marketing inventory. IoT creates new challenges for retailers, which need to ensure that every endpoint within the organization is secure. It is important to take a close look at what security solution is running on endpoints, and to re-evaluate this periodically by looking at what competitors are using and any new solutions available on the market.

Devise a strategy for a shoe manufacturing firm for retail business in India. The company has an investment of 200 crores with its plant located in Agra.
You may focus on the Locations, formats, atmospherics and layouts while proposing the retail strategy.

Retail Strategy Development

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