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CRM in Apparel Retail Sector
SUBMITTED BY: Enrollment No. : A0102107042 MBA (E&L) Class of 2009
Under the guidance of Professor , HOD Economics Department.
Mr. Jitender Kumar
In Partial Fulfillment of Award of Master’s Degree In Business Administration
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
AMITY UNIVERSITY UTTAR PRADESH
AMITY BUSINESS SCHOOL
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 requirement. I further declare that the information presented in this project is true and original to the best of my knowledge.
Date: Place: Noida
Name: Kapil Bhati Enroll No: A0102107042 Program: MBA (E&L)
AMITY UNIVERSITY UTTAR PRADESH
AMITY BUSINESS SCHOOL
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 guidance.
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 suggestions. 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 A0102107042 MBA (E&L)
5 Lifestyle International (Pvt) Limited .2 Drivers for retail transformation in India 1.4 Trent Limited 2.1 Overview 2.3.1 Pantaloon Retail (India) Limited 2. 1 Introduction 1.3 Challenges for organized retail 1.3 Some Facts about Indian Apparel Industry 2.2 Evolution of Retail 184.108.40.206 Some Facts 220.127.116.11.3 From Franchise to Company Owned 2. Apparel Retail in India 2. Chapter Name Page No.1 New Retail Entrepreneurs 2.3.2 Globus 2.3 Retailing Formats in India 1.2 Characteristics of Apparel retail sector 2.1 Growth in organized retail 18.104.22.168.3.No.3 Shopper’s Stop Limited 2.5 Marketing segmentation of retail industry 2.2 Changing Consumer Behavior 2.CONTENTS Declaration Certificate from Faculty guide Certificate from Industry Guide Acknowledgement S. Industry Insight – Indian Retail Industry 1.1 Introduction 1.3 Major Players 2.
5 Future Outlook 2.6 comparison between different players 2. Customer Relationship Management 3.4 CRM & IT 2 3 4 5 6 References Annexure Literature Review Problem Statement Methodology Results & Discussions Suggestions & Conclusion .3 Customer Retention Profile 3.2.2 Dimensions of CRM 3.4 Managerial Challenges 2.1 Introduction 3.6 Retail Touch points 3.3.
with changing demographics driving growth of organized retailing and driving growth in consumption. the modern retail business will create about 1. apparel and consumer durables are the top three categories of consumer spend and form 87% of the total retail sales in India. hypermarkets. supermarkets and specialty stores. it is believed that India is expected to experience accelerated consumption over the next few years. At present India’s modern retail business accounts for only about 5% of the country’s annual retail business. Food and beverages. 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. The Indian Retail Sector The Indian Retail Sector is at an inflexion point. With changing demographic and economic profile of the Indian population.85 trillion) business by 2015. the country’s overall retail sector will become a $450 billion (Rs20. Along the way. Further. Western-style malls have begun appearing in metros and second-rung cities alike introducing the Indian consumer to a shopping experience like never before. . to McKinsey.6 million jobs in the next five years acc. 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. it is also believed that increase in consumer spending would be driven by nuclearisation of families. With an expanding economy.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. With declining interest rates an average Indian is not averse to taking loans. increasing population of working women and new job opportunities in emerging service sectors such as IT Enabled Services.
changing demographic profiles and socio-economic environment – are already in place in India. Availability of quality retail space has been one of the main constraints for development of organized formats in India. greater selection. Organized retail derives its advantages in generating operational efficiencies while simultaneously catering to rising consumer aspirations. retailing in India – though large in terms of size – is highly fragmented and unorganized. and lowers logistics and marketing costs while delivering better value to customers in terms of lower price. With close to 12 million retail outlets India has the largest retail density in the world. The Indian retail industry is evolving in line with changing customer aspirations across product groups. Size drives economies on procurement. 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.Source: 1) www.ibef. with modern formats of retailing emerging. improved service and in store ambience. 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.org/artdisplay. Drivers for retail transformation in India A number of factors that drive transformation in retail – such as income growth. In the past. However. The spread between yield on property and its financing cost has turned positive with the . organized retail has to overcome significant challenges in terms of regulations and infrastructural barriers in order to realize its full potential. most of these retail outlets belong to the unorganized sector.aspx?tdy=1&cat_id=60&art_id=20386 Growth in organized retail In sharp contrast to the global retail sector. better quality. However.
which could have Otherwise helped the industry develop with funding as well as bringing in of best practices and systems. supply chain efficiencies will become a key differentiator of profitability in retail. with growing size of operations. equity options are also restricted with Foreign Direct Investment not being permitted in the retail sector. limiting funding from banks and financial institutions.fall in interest rates. With growing opportunities in the emerging service sectors such as ITES. Most of the world’s leading brands are now present in India. Supply chain management efficiencies are essential to retailers to maintain and improve margins. Consumerism and brand proliferation has been another enabler for organized retailing in India. However. the smaller ones are constrained for growth funding. At the same time. Source: www. Value Retailing . In India. The capital requirements for a retailer are in real estate (which banks have historically restricted lending to) and for working capital requirements. both vendor management and logistics management are still undeveloped. The availability of trained manpower poses a key risk for the retail sector.com/Faculty_Column/FC460/fc460.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. the ability of the retail business to hire and retain quality people is under pressure. Similarly. While some of the leading retailers are still able to get bank funding. there is large-scale sales tax evasion by smaller stores who derive significant cost advantage through such evasion.html Challenges for organized retail There exist differential sales tax rates across states in India . FDI restrictions have also restricted entry of international majors in retailing in India. The retail sector has not been granted industry status. Attractive yields on investments have resulted in sharp increase in property development.indianmba.
The larger chains of department stores (Namely Pantaloons’. These stores are found on high streets and as Anchor Tenants of shopping malls. 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 convenience factor coupled with the inspirational perception of shopping in a department store has contributed to their growth. Lifestyle retailing These stores retail primarily non-food items such as apparel. Food world) has presence in metros and mini metros. accessories.These stores primarily retail primarily food and house hold items. The share of expenditure on food and grocery in a consumer’s wallet. footwear. cosmetics and household products. Nilgiris. and Lifestyle) have presence in the metros and mini metros. They stock multiple brands across product categories. Evolution of Retail . Shoppers’ Stop. These are primarily large stores with volume based discounted prices. Westside. Several local department store chains have opened shop in India in the past five years. Star India. though some of them focus on their in house store label (on the lines of Marks & Spencer’s and St. The larger chain of supermarkets and hypermarkets (namely Big Bazaar. Michael).
com/india India’s five main consumer segments: .ey.Source: 1) www.
and Pantaloon.com/doc/47945/McKinsey-MGI-india-consumer-full-report/ Central Statistical Organization(CSO) & Technopak Analysis Retailing Formats in India: Malls: The largest form of organized retailing today. Specialty Stores: Chains such as the Bangalore based Kids Kemp.000 sq ft and above.000 sq ft to 7. all under a common roof. 00. www. service and entertainment. 2. are focusing on specific market segments and have established themselves strongly in their sectors. Located mainly in metro cities. the Mumbai books retailer Crossword. They lend an ideal shopping experience with an amalgamation of product.Source: 1. Examples include Shoppers Stop. Ranges from 60. .scribd. RPG's Music World and the Times Group's music chain Planet M. Pyramid. in proximity to urban outskirts.
having a strong focus on food & grocery and personal sales. catering to varied shopper needs are termed as Supermarkets. Source: 1) http://www. discount stores or factory outlets. also known as Category Killers.000 sq ft and large supermarkets ranging from of 3. MBO’s: Multi Brand outlets.000 sq ft. seven days a week. which started in Mumbai and now has more than seven large stores (over 30. feet located near residential areas.000 sq. The product category can range from a variety of perishable/ non perishable goods Department Stores: Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day.500 sq ft to 5. Among these. offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season.000 sq.Discount Stores: As the name suggests. Prices are slightly higher due to the convenience premium. These stores today contribute to 30% of all food & grocery organized retail sales.scribd. offer several brands across a single product category.com/doc/4782190/The-Indian-Retail-Snapshot Convenience Stores: These are relatively small stores 400-2. Hyper marts/Supermarkets: Large self service outlets. ft) across India and even has its own in store brand for clothes called Stop!. the biggest success is K Raheja's Shoppers Stop. These are located in or near residential high streets. Super Markets can further be classified in to mini supermarkets typically 1. These usually do well in busy market places and Metros.000 sq ft to 2. .
Under the aegis of the Union textile ministry and in tandem with .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.000 Cr(USD 25 b) by 2010 Share of all the segments in retail: Source: 1) http://www. mundane products for years have now tripled their product ranges and new appealing shapes and forms are being launched each Season. As lifestyles change. as in the West.110. Top-notch fashion professionals came together four years ago to form the Fashion Design Council of India.scribd. Technology. 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. Companies and brands that offered monotonous. fashion has also played an important role in shaping apparel consumerism. ideas and lifestyles are moving concurrently.com/doc/4782190/The-Indian-Retail-Snapshot APPAREL RETAIL: Moving Beyond Customer Expectations The influence of fashion clearly. and quickly. fashion in India is becoming more stratified.
an Overview: The apparel industry is one of India's largest foreign exchange earners. for example. Benetton and Lacoste—have been selling their branded apparel in India for a number of years. Today not only is the garment export business growing. nevertheless. global apparel brands are setting up their own apparel outlets. Today many leading fashion labels are being associated with Indian products.000 crores. which showcase all the company’s brands.National Institute of Fashion Technology. Indian Apparel Industry.35. instead of just selling through departmental stores. accounting for nearly 16% of the country's total exports. But now.html It has been estimated that India has approximately 30. enthusiasm in the minds of the foreign buyers is also at a high. A few significant foreign players—such as Levi Strauss. The credit for this goes to our exporter community. just like their Indian counterparts. tells only part of the story. 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.000 readymade garment manufacturing units and around three million people are working in the industry. Now. has a limited range exhibited in generic department stores located in metro cities. India has huge potential as a market for foreign clothing. given its large population and growing household incomes. . Ralph Lauren. Source: 1) http://apparel. 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. The boom in domestic apparel. Yet it has now set up its own stand-alone stores.com/lib/garments/indian07251998. The 1996 Indian textile exports approximately amounted to Rs. and forward linkages with the retail and distribution network. 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.000 crores of which apparel occupied over Rs14.indiamart.
ibef. Though these are expected to fizzle out soon. and pressed for time. Inculcation of a spirit of innovation by way of research and development and tapping new markets especially in South Africa. with more than 1. clothing retail accounts for 36% of organized retail business. Recent recession in Europe and the South Asian currency crisis have also contributed their own bits to the decimating Indian exports. Source: 1) www. In the large urban centres. East European countries. Central Africa. India's supply base is medium quality. With growing working women wearing western wear to work.000 every year. ethnic fabrics and are a fusion of western and Indian styles. They provide entertainment and an escape from reality for India’s masses. Ready-made apparel accounted for an estimated 20% of domestic clothing sales in 2005. India is a film-crazy nation. Thus the need of the hour is to enlarge both manufacturing as well as the marketing base. But till today.Consistent efforts towards extensive market coverage. It is the largest Sector. CIS. apparel retailers. market for good readymade clothes is likely to grow. weddings and fashion accessories. They affect various sectors of the market including clothing. and the largest producer of films. Latin America and Australia is also mandatory for export growth. In India. These are designer clothes that incorporate Indian motifs. Bollywood fashions have become pan Indian. relatively high fashion. improving technical capabilities and putting together an attractive and wide merchandise line has paid rich dividends. but small volume business. With the advent of modern format retailers and the growth of plastic cards. footwear. our clothing industry is dominated by sub-contractors and consists mainly of small units of 50 to 60 machines. Upper income urban women are adopting ethnic chic. like Shoppers Stop. Westside and Pantaloon . affluent urban Indian women are shopping like never before. The industry will be soon faced with open competition shorn of quotas or tariffs.org They spend mornings browsing in stores looking for deals or latest styles. there is no reason for complacency on the part of Indian exporters or of the garment industry. and set the popular fashion trend.
women and kids . Importance of store layout. Indian textile and clothing industry during 2006 is estimated to be about INR1. Westside carries only its own private labels. Seasonal variations on stocking pattern and need to clear inventory at the end of season should be understood by apparel retailer. Characteristics of Apparel retail sector As apparel retail is led by fashion. Westside has `Club West' to Woo the customers. goes down substantially and inventory carrying burden turns out to be very high. which includes apparel of men. stock piling and brand switching on the part of a consumer which substantially reduces retailer’s financial and inventory risk and . 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. a player needs to keep a close watch on fashion amongst teenagers as they are the trend setters.have popularized their private labels. while Pantaloons offers a `Green Card' Rewards programmes. for instance. style. and use the shop’s name as a quality standard. 20-30% of their apparel turnover is from private labels. It gets replaced by different design. colour.511 billion ( USD 38 billion) . has a loyalty programme called `The Inner Circle'. which have attracted urban shoppers.short term activities which induces trade or consumer to buy now rather than in future as the value of apparel after the season. Customers look to design and fit of the clothes. Customers have loyalty to a store rather than any particular garment brand. Typically once an item is sold from the outlet. while for the other stores. 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. Apparel retailer needs to understand critical role of sales promotions. retailer ensures that there is no repetition of same. Hence organized retailers like Lifestyle. décor is very critical. Role of Bollywood in spreading fashion needs to be understood. Attractive promotions induces purchase acceleration. This has led to a thriving unbranded or local brand market for ready-to-wear clothes leading to severe competition.
in/publications/data/2007-07-01Preeta. its brands and promote new brands. Enter.pdf Changing Consumer Behavior But suddenly. 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. Spykar has set up approx 35 stores across the country in all the major cities.iimahd. company should have best CRM strategies. 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. the company is expanding to other north Indian states. then company has doubled its presence to 14 stores in 2006. a part of the Dubai-based Landmark Group retail chain. Bangalore-based TCNS Clothing has more than 37 stores across the country. Besides sprucing up exiting stores in Delhi and Punjab. growing numbers of nuclear families in urban . Lifestyle. If the customer will purchase first then only he/she can be loyal so in order to retail the existing & attracting the new ones.000 square feet.ernet.consumer’s financial risk and psychological risk. occupying a combined retail space of one million square feet. Mumbai-based lifestyle chain Pantaloon spends around US $ 840000 in a year to revitalize Shoppers Stop –has more than 35 more Outlets. Branded apparel merchandising is gathering critical momentum in India. brands have started shaping buying behavior.earlier owns seven stores located across various metro cities. Source: 1) www. A large young working population with a median age of 24 years.
000 sq ft stores to sell its flagship brand apparel: Arrow. and nearly per cent of Arvind’s apparel business comes from these outlets. Now. companies are now quickly branching to smaller cities in an effort to cash in on the consumer boom. Madura Garments and Zodiac Clothing building extensive retail networks. Likewise. Now. most players used the franchise route to expand. Arvind Mills. Spread over a carpet area of 1350 square feet. Over the last two years. semi-ground and . the company management has closed down a number of these small stores and gone in for bigger stores. the store is designed to function at three levels—ground.areas.500 square feet space. the Arvind Mafatlal Group had a chain of below-1. The new stores have a minimum 1. companies are using their own funds to increase the capacities of their retail stores. the branded apparel market—is now worth nearly $ 3 billion. Previously. Madura Garments has opened up a mega store in the heart of Bangalore that sells the company’s flagship brand.is revamping its chain of 300 stores—known as Raymond’s Shops—and focusing on readymades at a cost of around US $ 35 million. According to ICICI Bank. From Franchise to Company Owned Larger textile manufacturers were the first off the block in the nineties. the consumer boom is being driven by a new openness about using credit cards. Raymond’s – the flagship brand of the Singhania Group-. Industry experts believe that apparel sales in retail stores posted a growth of between 2530 per cent in 2003 and according to an estimate by McKinsey. usage of credit card has increased a lot. quality retailing was limited to high streets and standalone departmental stores. The logic: the contribution of readymade apparel to total sales has gone up 25-30 percent compared to the previous year. across metros. Peter England. with big players like Raymond. Until recently. apparel buying is the second biggest consumption category at malls. after food products. Without question. Apparel retailing is no longer a metropolitan phenomenon. Because the market potential was still relatively small in the nineties. increasing working-women population and emerging opportunities in the services sector have increased the average consumer spend on branded clothing.
Some Facts about Indian Apparel Industry: • India’s top retailers are largely lifestyle.org/artdisplay. www.scribd. Encouraged by this success. there is a fivefold difference in per capita income in apparel . this single store logged sales of nearly US $ 205. Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores • Source: 1. clothing and apparel stores.ibef.aspx?tdy=1&cat_id=60&art_id=20386 • Even within the top income segments. the company has opened a second mega store and is planning a third in the near future. This is followed by grocery stores Following the past trends and business models in the west retail giants such as Pantaloon. 2.com/doc/2100112/Indian-Retail-Sector\ www. Last year.mezzanine. a slew of new retail entrepreneurs chains are investing heavily to cash in on India’s US $ 15 billion clothing market. Spurred by these successes.000.
1991 and on September 25.pantaloon. Later they changed their name to Pantaloon Retail (India) Limited on July 7 1999.com/companyinfo. Source: 1) www.asp 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 . The Company was converted into a public limited company on September 20.scribd. 1987 as Manz Wear Private Limited.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. 1992 the name was changed to Pantaloon Fashions (India) Limited and in the same year the Company made an initial public offering.com/doc/47945/McKinsey-MGI-india-consumer-full-report 2) www.
The Company has launched a new consumer promotion called ‘Make Your Own Sale Day’. each with it own benefits designed to suit the needs of the customers. They have a loyalty card programme with a name of ‘Green Card'. To each his own individual needs vary. 2008 Shopper’s stop has co-branded credit card tie-up with Citibank to provide its customers with exclusive benefits for shopping. and hence have built their business model around ‘Family focus’ rather than ‘individual focus’. 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. It is divided hierarchically into one star. on April 10. • Globus : Launched in January 1998. The company opened its first store in 1999 at Indore followed by the launch of its second store in Chennai (T-Nagar). in addition to a host of other privileges such as exclusive tie ups.retailer. 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 It also stays in touch with its loyal customers through Mailers. Mumbai Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging Market Retailer of the Year Award". Pantaloons clearly define Lifestyle products under Private Labels and third party brands. by World Retail Congress at Barcelona. Every point generated at all the levels is equivalent to Rs. This is why Globus offers 2 different card categories. • Shopper’s Stop: Shoppers Stop is an Indian department stores promoted by the K Raheja Corp Group (Chandru L Raheja Group). SMS’s E-mails and Telephone informing them about the developments and promotions.1 . Globus is a part of the Rajan Raheja group. promotion and special shopping hours. started in the year 1991 with its first store in Andheri. three star and five star.
The 30. Positioned as a trendy. 1 point is earned. the Group has become one of the foremost retailers in the Gulf.• Westside: Established in 1998 as a part of TATA group.org/wiki/Shoppers'_Stop Comparison Between different players: . Lifestyle India began operations in 1999 with its first store in Chennai. Westside idea is Club West.com/lifestyl. home delivery of alterations. special shopping hours on the first day of any discount sales event organized by the chain.000-plus members of this club get rebates at restaurants and on holiday packages from the Taj Group of Hotels. For every 100 points earned. a customer loyalty programme launched in May 2001.htm 3) en.100 is received.wikipedia. Lifestyle has a loyalty card programme Known as the ‘The Inner Circle ' For every Rs. youthful and vibrant brand that offers customers a wide variety of merchandise at an exceptional value for money.chipsbooks.globus. With over 30 years’ experience in retailing. Source: 1) www.in 2) http://www. • Lifestyle Lifestyle International (P) Ltd is part of the Landmark Group. a Dubai – based retail chain. gift voucher of Rs. and best of all.50 spent at any of the stores.
women Rs. Media used Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes (Exchange offer ) Yes No No No No Yes No No No Hoardings. Hoardings. women & children Rs. 800 Family store categories Apparel accessories for men. 7. Special Promotion (event) 5. holidays 1200 in week days & 6000 during week end 2000 in week days & 7400 durin week end 1200 in week days & 7000 during week end 25-45 per hour Sales promotion: 1. electronic.Store Name Pantaloons lifestyle Globus Shopper’s Stop Westside Format Type Positioning Multibrand Multibrand Exclusive own private labeled brand Fashion at afforfability Apparel & accessories for men. Christmas etc) 3. women & children Rs. Email. In electronic store (SMS.1800 Apparel accessories for men. hoardings. 300-999 Multibrand Exclusive Tata Trent group Style & affordability Stylized clothes. POP Price off. Hoardings. In store gift vouchers. Hoardings. In store Print. Joint promotion 6. In store Cause related Discounts.print. Loyalty card Programme 4. footwear & accessories Rs199-1999 Family store Unique & high quality Family Store Apparel accessories for men. Festive Promotions (Diwali. . women & children Rs.1200 Average billing per customer Average footfalls 1000on weekday & 1500 to 2000 on weekends. Print & electronic media. End of season 2. free Lucky draw.
Using tools such as secure Web portals. Indian brands will have to withstand turbulent conditions and learn to survive. Customers who are used to literally having the world at their fingertips. 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.Future outlook Apparel sector is likely to grow with growing Indian economy. enabling maximum responsiveness . are no longer interested in being told what products to buy. 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. insight-driven retailers propagate current consumer demand data throughout the supply chain. If the role of such activities is understood well it may help any player a long way to survive and grow. Many multinational players either have already plunged into Indian market or plan to do so in apparel sector. thanks to the Internet and personal electronic devices.
and agility. . creating 5 to 10 percent improvements in gross margin dollars and improved inventory turn Space Optimization : It allows retailers to use every square inch of selling space to its maximum profit potential. such as improved customer satisfaction levels. in turn. increases customer satisfaction levels and market basket sizes.” Localized Product Assortments: By localizing the merchandising and assortment plans at the individual store level. and profit potential. Best CRM strategies should be implemented helping the customers to save the money. Optimization systems take in information such as store sales. as well as decreases the amount of unsold inventory in the supply chain and even levels of “safety stock. such as higher margins and increased basket sizes. What is CRM ?? What ever the customer buys for him. marketing effectiveness. as well as tangible benefits. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. sales. Source: 1) Article from Oracle Retail by Dave Boyce. customer preferences and product sizes to produce space plans based on business rules. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers. Retailers who embed customer SKU preferences into their profiling. a store can reap significant intangible benefits. CRM stands for Customer Relationship Management. forecasting and optimization practices can improve the accuracy of buying and allocating merchandise. time and heartburn by providing comprehensive customer reviews at a click. forecasted demand. some delightful. responsiveness and market trends. There are many technological components to CRM. Assortment plans can thus be executed in a manner that maximizes the sales potential of floor selling space. This. Every experience should be completely satisfactory. but thinking about CRM in primarily technological terms is a mistake.
How we treat all of this information is where CRM plays a key role.com/story.pwc. the supply chain. Foremost thing for better CRM: Getting value out of real time customer information Today. Loyalty programs have allowed retailers to collect and analyze vast quantities of data on purchases by individuals.html Every business organization depends on customers for sustenance. . retailers spend an excessive amount of time and money collecting. Every business communicates with their clients in many different ways. While this information is essential to understanding changing customer needs and expectations. 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.creatingloyalty. 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. CRM acts as a central repository of information on clients and potential clients of any store. the design everything should be geared to making the buying experience as good as possible. Source: 1) 2) http://www. especially in our technology rich and information based society.com/ca/eng/main/home/index. it's important that the systems you use to gather this information are efficient and cost-effective.Dimensions of CRM: • • • Identifying the customers Acquiring the customers Retaining the customers A store should be customer-oriented . E-retailing has added to the avalanche of data. the question is how to create and maintain customer satisfaction.cfm?article_id=625 http://www. analyzing and trying to utilize customer data by turning it into information and knowledge that is actionable.the technology.
It is real time tracking of every single product. and other business productivity improvements. The new developments create an easy way for users to generate bar codes on demand for asset tracking. RFID (Radio Frequency Identification) is now the buzzword in retail. and enhance customer service. which RFID promises to replace. . the following model is being used symbolizing the communication and co-operation. Customer Interfacing Systems Bar Coding and Scanners Point of sale systems use scanners and bar coding to identify an item. eliminating the manual point-and-read operations needed with bar coding. document tracking. the items in the cart are hit with laser beams and scanned. This enhanced visibility could significantly decrease warehouse. 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. RFID proactively transmits information. 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. compliance labeling. technology evolved rapidly to support this growth. All that the consumer has to do is to pay for the goods. The hardware and software tools that have now become almost essential for retailing can be into 3 broad categories. from manufacture to checkout and compared to Universal Product Code (UPC) bar coding. and inventory costs. distribution. Tunnel Scanning is a new concept where the consumer pushes the full shopping cart through an electronic gate to the point of sale.Customer Relation-Profile When mapping the quality of a customer relationship. In a matter of seconds. and the Legs concern the responsibility and professionalism with which we implement or deliver the competencies we have agreed upon. increase margins. use pre-stored data to calculate the cost and generate the total bill for a client.
. 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. getting his supplies on time. Electronic cheque conversion. Networked systems: fixed position readers those are directly connected to centralized information management system. mail order and the Internet has provided retailers with real access to consumer data. a recent development in this area. An integrated supply chain helps the retailer in maintaining his stocks. the retailer voids it and hands it back to the consumer along with a receipt. removing the need of a consumer physically visiting the store. while servicing the customer better. while transponders are placed on moveable items. preventing stock-outs and thus reducing his costs. CRM Systems The rise of loyalty programs. processes a cheque electronically by transmitting transaction information to the retailer and consumer's bank. Portable Data Capture systems: portable RFID systems that can be used anywhere. Rather than manually process a cheque. which makes the process very fast. Data warehousing & mining technologies offers retailers the tools they need to make sense of their consumer data and apply it to business. having digitally captured and stored the image of the cheque. Operation Support Systems ERP System Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution. Internet Internet is also rapidly evolving as a customer interface. This. front and back office store systems and merchandising. along with the various available CRM (Customer Relationship Management) Systems.
CRM MODEL . 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. They enable consolidation of activities such as long term budgeting. 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. monthly forecasting. Today. software packages are helping retailers not only in their locational decisions but in decisions regarding store sizing and floor-spaces as well. These APS packages complement existing (but often limited) ERP packages.allows the retailers to study the purchase behavior of consumers in detail and grow the value of individual consumers to their businesses. weekly factory scheduling and daily distribution scheduling into one overall planning process using a single set of data. A larger number of visual merchandising tools are available to him to evaluate the impact of his stacking options. 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.
If organization want an "easy to use tool" to realize how organization can maximize business relations. strong and wanted sides of the organizations. Customer Loyalty: . in order to improve future relations. 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. Using the Customer Relation Profile. this is the tool for organization and organization.The essence of this process is mutually to discover weak.
Setting aside unique location or competitive differences. finding exactly what you want. we all face time and cost trade-offs. customers still need to be guided into finding the right products. friendliness and helpfulness of sales staff. Literature Review: . bad customer service will result in brand and profitability erosion. over a long period of time. These programs would teach what actions are necessary to improve low scores. Likewise. Not that pricing is inconsequential or immaterial to the consumer's choice of where to shop. store cleanliness. Loyalty is most influenced by the shopping experience and the brand (the cumulative impact of many experiences over time). but if price were the only thing driving loyalty we would all be frequenting garage sales and flea markets. easily located products. 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. and eventually shop at the competition. 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. and checkout experience. As busy consumers. and then being held hostage by the checkout process.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. There is nothing worse than having a great shopping experience. 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. stores with higher levels of customer loyalty should see higher same store sale increases year over year. There are a lot of components to the shopping experience such as availability of parking. price is an element we do not find to be a significant driver of loyalty. Without that help and support they become easily frustrated. 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. Surprisingly.
of the companies actively implementing CRM. Daniel J. A brief overview is presented below: According to Pine and Gilmore (1999) experiences can be described by two dimensions. Haesun (2002) studied Buyer–seller relationships for promotional support in the apparel sector which is critical for success. Results indicated that monetary support was regarded as the most important promotional support. Bitner and Zenithal (2003) stated that satisfaction is the customer’s evaluation of a product or service has met their needs & expectations. and to investigate the relationship between offering frequency and perceptions of importance. Park. The implied. A positive and . Moore. 93 percent claimed increased customer loyalty and customer Satisfaction would justify their CRM investment. reassessment and refinement of the PRECON scale and impact of income and age on prestige shopping.. stated the need to demonstrate increased revenue. Kincade. Dawn R. In the recent information Week survey. Jesse N. (2000) examined Prestige clothing shopping by consumers by a confirmatory assessment and refinement of the PRECON scale. The Second highest percentage. Deeter-Schmelz. The paper concludes with managerial implications for the United States apparel retailers dealing in prestige clothing. 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.. you need to sell maximum products over a long period of time and across different product lines. to identify the retailer's perceptions of the offering frequency and importance of the promotional support.Several studies on CRM and apparel retail sector are reported in the context of developed markets.” Peppers and Rogers (1993) stated that to build the relationships with your individual customers. Doris H. 83 percent.. The purpose of the study was to define promotional support categories offered to apparel retailers by manufacturers. Aspects studied include background on the symbolic aspects of consumption.. Goebel. prestige shopping behavior. 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. Woodard.. Ginger A.
the loyalty program broadened their relationship with the firm into other business areas. acceptance of US apparel brands. product assortment. fashionability. norms and behaviour that influence consumer decision making and impact acceptance of products and services. Lars. the market was characterized by an absence of change of the competitive situation. extent and quality of customer service. Hyllegard. Karen. Liu. Benavent. Christophe. In contrast. Borja. apparel product country of manufacture and price. Meyer-Waarden. Molly.significant correlation was found between items the buyers perceived as important and the frequency of offerings of these items. 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. payment options. consumers whose initial patronage levels were low or moderate gradually purchased more and became more loyal to the firm. convenience of location. The study examined consumers' store patronage and apparel purchase behaviour. Eckman. The study emphasized that speciality retailers' success in international markets is contingent upon their knowledge of culturally-defined values. Using longitudinal data from a convenience store franchise. It found out that the perceptions differed regarding quality. Yuping. perceptions of retailers' products and services. . The double jeopardy phenomenon was present and loyalty programmes did not substantially change market structures. Alejandro Molla. Thus there is a need to consider patronage to decide rewards for loyalty programmes. (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 . studied Spanish consumers' perceptions of US apparel speciality retailers' products and services. but the program did not prompt them to change their purchase behavior. For light buyers. In the context of French market. Consumers' acceptance of US apparel brands was a function of age. Miguel Angel Gomez (2005). national brands and store layout. and perceptions of the impact of foreign retailers on local communities. household income. When all companies had loyalty programs. (2007) found out the Long-Term Impact of Loyalty Programs on Consumer Purchase Behavior and Loyalty. Descals.
New York:Doubleday. Journal of Marketing Theory & Practice. Feb2006. “Global Apparel. 28p. ”Spanish consumers' perceptions of US apparel speciality retailers' products and services “Journal of Consumer Behaviour. 9p. Yuping.. Winter2005 Issue 48. p48-52. Christophe.A. Moore. p345-362. http://apparel. 8. Meyer-Waarden. Karen. Sep2005. 26 Issue 4. p61-88.html 2. Daniel J. Benavent. 7. and the economic worth of customers: Wwhat we know and what we need to learn. Vol. 22 Issue 1/2.” Journal of Marketing Management..” Journal of Marketing. 18p. profitability. Lars. 7 charts. Vol. Sweat. But progress can be very slow-CRM under scrutiny.. 12.com/doc/95637/Customer-Relationship-Management . “Consumer Lifestyles in India” Euromonitor. p43. 4. Borja. Jeff. 16p. Liu. 67-85 11..indiamart. 6. 17p. V.” Information Week via COMTEX online. 5. Oct2007.” prestige clothing shopping by consumers: a confirmatory assessment and refinement of the precon scale with managerial implications”. http://www.com/lib/textile/textile07301998. Hyllegard. Service quality. “Lots of companies are thinking about customer relationship management. Zeithaml. Vol.D. The one to one future: Building Relationships One Customer At a Time.. Fall2000. Goebel. Journal of the Academy of Marketing Science 28(1). 3. Pedro Reinares. Ph. Alejandro Molla.” European Retail Digest.. Park.scribd. Kincade.2000. (2000). Peppers. (2006) 10. International Journal of Consumer Studies..” The Long-Term Impact of Loyalty Programs on Consumer Purchase Behavior and Loyalty. Dec2002. International Consumer Lifestyles Database(2005) 9.” The Impact of Loyalty Programmes on Repeat Purchase Behaviour. Accessories and Luxury Goods” Datamonitor. 71 Issue 4. Descals. Dawn R. Molly. 8 Issue 4. Doris H. Lara. Woodard. MiguelAngel Gomez.” Exploring the Benefits Obtained in a Loyalty Programme applied to Retailing. 5p. Eckman.”. Vol. Don and Martha Rogers.. September 15. p19-35. p294-302. Haesun. Vol. Jesse N.1993 13.References: 1. Deeter-Schmelz. Ginger A. 4 Issue 5..
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. The level of association as measured by Pearson’s co-efficient falls between -1. The measure was standardized through computation of reliability & validity. customer service & the customer loyalty. interaction and customization. To study the perception of customers towards the CRM strategies implemented by the different Lifstyle Stores. were distributed to the people in a mall. T-test was applied in order to compare significant difference between the store attributes of different lifestyle store. identification. Use was made of Pearson’s coefficient to determine the level of association between the store attributes.0. To study the association between the Customer’s Services & the Customer Loyalty. Use was made of a five-point Likert scale. 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 two questionnaire were developed hypothesis were formulated to reflect the associations between the different Lifestyle Stores and the customer service offered by them. differentiation. . A total of 200 questionnaires were distributed to the people. to measure the respondents’ perceptions and expectations. Structured questionnaires. terms of CRM To get an insight of the Retailer’s perspective towards the customer’s expectation in The research instrument The research instrument used was developed to measure both the expectations and perceptions of the customers of the Lifestyle Stores. The main body of the questionnaire included 11 questions reflecting customer service. 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.0 and +1. the applications of IT. which indicates the strength and direction of association between the two variables.RESEARCH DESIGN 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.
Key strategic initiatives included: “the muchvalued positioning as a lifestyle brand. 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. flagship stores and presence in high-end department stores. CONCLUSIONS 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. . 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 . But every customer has a different perception Although a select few are able to afford luxury goods.The companies serve two types of consumers: for the practical consumer. The apparel industry exists in a very competitive environment where companies need to adopt new technologies in order to improve profitability and lower costs. The brand’s recent revival was a result of several key strategic plans. they provide sensible and affordable clothing whose styles will not change drastically from year to year. However the lifestyle stores are is very fascinating and the products themselves signify prestige and status. expansion of licenses into areas such as watches and sunglasses and a product mix toward accessories and gifts. 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. It is also an industry that is well guarded and difficult to find any information on. For consumers Luxury means exclusivity. and for the fashion-conscious consumer. The store focuses on accessibility while maintaining its exclusivity and protecting its tradition and heritage while striving to be innovative and inspiring. 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.
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. Both Exploratory & Causal Research Design were taken Research objectives: The survey was conducted among the customers shopping in the mall. luxury goods reinforce their status as a member of the upper class. An example of this would be the Consumer’s make a use of internet. luxury goods brands have been broadening their appeal to a wider consumer base. It is an idea of status and exclusivity that makes these brands sought-after by people from many different walks of life. The main factors in such a study were customer demographics. To study the association between the Customer’s Services & the Customer Loyalty. The two questionnaire were developed hypothesis were formulated to reflect the associations between the different Lifestyle Stores and the customer service offered by them. but for everyone else luxury goods are items that many aspire to be able to own someday. To study the perception of customers towards the CRM strategies implemented by the different Lifstyle Stores. 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. 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. RESEARCH DESIGN The study is exploratory in nature with survey method being used to complete the study. the presence of competition. physical store . which is ultimately the end product that is consumed. For the wealthy. The allure for many designer products is people’s desire for wealth and status.In the past three years. To do the comparative analysis of different Lifestyle Stores on different store dimensions.
Structured questionnaires. Discussion of the specific findings H1: Identifying new and existing clients increases the level of customer service. sales promotions. Use was made of a five-point Likert scale. the applications of IT. CRM technologies and the characteristics of Customer Service Representatives etc. Use was made of Pearson’s coefficient to determine the level of association between the store attributes.0. were distributed to the people in a mall. T-test was applied in order to compare significant difference between the store attributes of different lifestyle store. which indicates the strength and direction of association between the two variables.characteristics. customer service & the customer loyalty. interaction and customization. The measure was standardized through computation of reliability & validity.0 and +1. . H2: Differentiating between the services offered to new and existing clients increases the level of customer service. The main body of the questionnaire included 11 questions reflecting customer service. 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. to measure the respondents’ perceptions and expectations. 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. The level of association as measured by Pearson’s co-efficient falls between -1. identification. quality. 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. differentiation. A total of 200 questionnaires were distributed to the people.
DATA ANALYSIS 1) Occupation * How often do you make your purchase of Apparels? Cross tabulation Count How often do you make your purchase of Apparels? Weekly Occupation Business Service Student Total 8 7 4 19 Monthly 24 53 9 86 Twice in a Month 6 21 2 29 Occasionall y 25 6 35 66 Total 63 87 50 200 Occupation Cumulative Percent 31.0 100.0 .5 25.5 43.0 100.0 Valid Percent 31.5 75.0 Valid Business Service Student Total Frequency 63 87 50 200 Percent 31.5 43.0 100.5 25.
i.e. The business class people prefer to make the purchase of apparels occasionally but sometimes monthly too.Results: • The service class people prefer to make the purchase of apparels monthly i. 44%.e.31% While a student prefer to make the purchase of apparels occasionally.e.i.25% • • .
5 100.i.0 Results: • People from income group of 18-30 K prefer to make the purchase of apparels monthly i. 31%.0 Monthly 5 20 34 27 86 Twice in a Month 2 2 19 6 29 Occasionally 29 6 3 28 66 Total 39 30 62 69 200 Valid <12 K 12-18 K 18-30 K >30 K Total Frequency 39 30 62 69 200 Percent 19.5 100.5 34.5 15.5 100.0 Valid Percent 19.34% .5 15.e.5 65.0 31.0 34. • People from income group of >30 K prefer to make the purchase of apparels occasionally.e.0 34.1) Income * How often do you make your purchase of Apparels? Cross tabulation Count How often do you make your purchase of Apparels? Weekly Income <12 K 12-18 K 18-30 K >30 K Total 3 2 6 8 19 Income Cumulative Percent 19.0 31.
20%.• People from income group of <12 K prefer to make the purchase of apparels occasionally i.i.0 Valid Percent 52.e.0 Total 30 27 57 104 96 200 Gender Total Male Female Valid Male Female Total Frequency 104 96 200 Percent 52.0 100.0 100. 74 Male respondents have the loyalty cards of different lifestyle Stores. People from income group of 12-18 K prefer to make the purchase of apparels monthly.0 48.0 48.0 100.e. .0 Results: • Out of 104.15% • 2) Gender * Do you owe Loyalty Cards? Cross tabulation Count Do you owe Loyalty Cards? Yes No 74 69 143 Gender Cumulative Percent 52.
. 69 Female respondents have the loyalty cards of different lifestyle Stores.• Out of 96. Finding: Females are prone to shopping that is why maximum females have loyalty cards.
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