It's ironic that while the retail sector in India is estimated at US $350 billion, organised retail is estimated barely at US $8 billion. The upside is the expected growth rate. By 2010, organised retail is expected to grow up to US $22 billion, an estimated 40 % compounded annual growth of return over the next few years.
Numerous international retail giants from Australia, the United Kingdom, and the United States are entering the Indian market with enormous hope and investments. At present retailers in India only prefer to increase the number of outlets within a city or to other regions as a part of their expansion drive. But they will now need to fight the burgeoning retail space with many new shopping centers and growing new markets like the kids' retail revolution in apparel. To manage the tremendous volume of transactions and to beat international competition, Indian retailers have an immediate need for Customer Relationship Management (CRM) tools.
CRM will happen. It's simply a question of how long it will take and in how many ways retailers will benefit. Customer Relationship Management is important, especially for your repeat customers and for them to feel camaraderie with the retailer. A good CRM will provide the right framework to retailers so that they can personalize merchandise purchases, services and responses across all communication channels for the customer's satisfaction and for increased sales.
Low cost, high value
But before retailers embark on any CRM software, they need to ensure it comes at optimal cost, with minimal risk, high value, and a higher return on investment (ROI). It should install quickly, interface readily with existing systems, be easy to learn and to use, and deliver uncompromising performance.
Driven by changing lifestyles, strong income growth and favourable demographic patterns, the Indian retail market is growing at compounded annual rate of 5 % and expected revenues of US $320 billion in 2007, according to a report by AT Kearney and the Confederation of Indian Industry. And big international and domestic retailers have realized this growth.
To sustain competition from the giants, Indian retailers must differentiate or brand their business. Customers expect retailers to do this is by personalizing products and services. And this is where a rightly implemented CRM comes into play.
Growing Communication Channels
India has more than 129 million mobile communication subscribers and the number is expected to go up to 300 million in 2008. This is a strong marketing channel retailers cannot afford to miss. "Truly loyal customers can't imagine doing business with anyone else. They are your best means of advertising because they've become advocates for your company. They bore their friends with stories of how great you are," write Shaun Smith and Joe Wheeler, authors of Managing the Customer Experience.
To implement the right CRM, retailers need to analyze customer preferences and trends, and then merge analysis with inbound and outbound calling via CRM technology so that customers can communicate with the retail chain by fax, phone, web, SMS, and the like. The CRM framework links and integrates these channels to individualize the customer's experience and ensure satisfaction.
Similarly, competition must be kept under a check. If a retailer offers volume discounts, its competitors must likewise offer comparable value to the customers. If a retailer has tools to reach more customers with personalized purchase offers, or to process orders faster, or with fewer errors, or more efficiently, other vendors must adapt or gradually surrender market share.
But unfortunately, only 30% of companies worldwide have actually implemented a commercial CRM software package. And most of these are only a year old. Of this minority, 54% have implemented just one part of CRM. With so much room for improvement in meeting customer demands, CRM can only help.
Contact centres form an integral part of CRM because they directly impact how customers feel about the retailer's products, services and business. With an efficient system at the contact centre, retailers can help customers buy what they want and need. For instance, retailers are yet to utilize the opportunity of selling daily needs to a population that is using the latest technology to purchase almost everything.
If you are looking at moving to customer-centric marketing, this means that all customer functions are subject to CRM's analytical processes. This helps retailers understand both how the customer base is presently segmented and, for the future, according to what retailing values. Other analyses identify new services, evaluate their ROI, shift focus from less to more profitable customers, etc. The outcome from CRM analytics is better service, improved planning and profitability, and more appropriate pricing.
CRM analysis can help retailers make a smooth shift to a customer-focused enterprise by allowing processes like differentiating customers into segments, discovering precise needs of customers, and redesigning compensation and rewards to effect behavioural changes. This process establishes the context that stimulates the customer to shop and buy. Hardcore marketers make their own analytical understandings with the help of a CRM to evaluate what their customers need.
Better services imply the customer's improved ability to make purchases. They will make informed decisions and be happy with their purchase. Such efficient shopping will only mean a patronizing customer. For the retailers, this means higher transaction rate, increased revenues, and a wider profit margin.
Smart retailers are looking up new and critical CRM tools like the unified agent desktop that allows customer service agents to respond faster and with greater accuracy and consistency every time a customer picks up the phone, accesses e-mails or chats. The unified agent desktop brings the customer into focus at the desktop and turns the agent's screen into a hub that can access all enterprise applications and databases necessary to respond rapidly to the customer.
The result is increased quality and decreased operating costs, leading to one of the most handsome ROIs in the industry. It also eliminates data redundancy like repeating customers with the same requests or relying on agents to recall the correct systems to enter a new customer record or service request.
Questions to ask about any CRM Framework:
Does it allow the supervisor or manager to access and process analytical data online? (Preferably through a web portal)
Does it use just one screen to manage all customer channels - e-mail, voice, chat, fax, web self service - so that agents stay productive and don't get lost in the transaction?
Does it offer a universal view of your retail CRM data on a single screen - contact information, history of recent activity, knowledge base, workflow interaction, resource management?
Does it make efficient use of your and the customer's time by minimizing clicks so that managers and agents don't have to toggle to other screens or other applications while the customer waits impatiently?