Indian Streams Research Journal

ISSN 2230-7850
Volume-4 | Issue-3 | April-2014
Available online at www.isrj.net

A COMPARATIVE STUDY ON CUSTOMER RELATIONSHIP

MANAGEMENT STRATEGIES IN ORGANISED MULTI
BRAND RETAIL APPARELS.
B. Nataraj and R. Rajendran

Assistant Professor- MBA, Easwari Engineering College, Chennai, Tamil Nadu.

Assistant Professor(Sl Gr) Department of Business Administration, Annamalai University,
Annamalai Nagar, Chidambaram, Tamil Nadu.

Abstract:-Customer relationship management (CRM) is a comprehensive strategy and process of

acquiring, retaining and parenting with selective customers to create superior value for the company and
the customers. The Indian Apparel Industry has an overwhelming presence in the economic life of the
country. The retail apparel industry can be broadly classified in to organised and un organised retail
apparel industry. The organised retail apparel industry can further be classified in to Exclusive Retail
outlets and Multi Brand Retail outlets. This article analyses the different players in organised retail
apparel industry and compares their strengths weakness opportunities and threats. This article compares
the CRM strategies followed in the various organised multi brand retail outlets.

Keywords: Customer relationship Management, Multi brand retail apparels, organised retail apparels.

INTRODUCTION

In emerging markets around the world there has been a close linkage between economic development, rise in per
capita income, growing consumerism, proliferation of branded products and retail modernization. With high economic
growth, per capita income increases this, in turn, leads to a shift in consumption pattern from necessity items to discretionary
consumption. Furthermore, as the economy liberalises and globalises, various international brands enter the domestic market.
Consumer awareness increases and the proliferation of brands lead to increase in retail space. Thus, retailing is a part of the
development process. Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP
(McKinsey, 2013). The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world
by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people (Wall Street Journal,
2011).
India continues to be among the most attractive investment propositions for global retailers. India has emerged as the
fifth most favourable destination for international retailers, outpacing the UAE, Russia, Indonesia and Saudi Arabia, according
to A T Kearney's Global Retail Development Index (GRDI) 2012. The report also highlighted that "India remains a high
potential market with accelerated retail growth of 15-20 per cent expected over the next five years.”

INDUSTRY ANALYSIS

India's retail sector is worth US$ 350 billion and is growing at a compound annual growth rate (CAGR) of 15 per cent
to 20 per cent at present, as per a PricewaterhouseCoopers (PwC) research report titled, 'Winning in India's retail sector:
Factors for Success'. Mass grocery and apparel are the two most favoured segments for foreign direct investment (FDI) in
multi-brand retail in India, according to a study titled 'Indian Retail Market-Opening More Doors' by Deloitte Touche
Tohmatsu India. The FDI inflows in single-brand retail trading during April 2000 to December 2012 stood at US$ 42.70
million, as per the data released by Department of Industrial Policy and Promotion (DIPP). The Indian Apparel Industry has an
overwhelming presence in the economic life of the country. It is one of the earliest industries to come into existence in the
country. The sector has a unique position as a self-reliant industry, from the production of raw materials to the delivery of end
products, with considerable value-addition at every stage of processing Apart from providing one of the basic necessities of
life, the apparel industry also plays a pivotal role through its contribution to industrial output, employment generation, and the

B. Nataraj and R. Rajendran ,“A COMPARATIVE STUDY ON CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES IN ORGANISED MULTI
BRAND RETAIL APPARELS.” Indian Streams Research Journal | Volume 4 | Issue 3 | April 2014 | Online & Print

1
.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

export earnings of the country. Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 17
percent to the country’s export earnings. It provides direct employment to over 35 million people (McKinsey, 2013) (Wall
Street Journal, 2011)
The Indian apparel industry is estimated to be worth Rs. 3,270 billion in 2011-12 and is expected to grow at a
compounded annual growth rate of 8.7 per cent till 2016. The growth would primarily be driven by the surge in demand for
readymade apparels in semi-urban areas, rising income levels and youth population and increasing preference for branded
apparel. (Competition Commission of India, 2013)

Chart 1: Showing Key Players in Organised Apparel Retail Industry.

Source: Indian Retail Apparel, North Bridge Capital. (North Bridge Capital, 2011)

REVIEW OF LITERATURE

Borden 1965; Culliton 1948; Kotler 1997. Traditionally, businesses have employed transaction marketing, that is, the
4Ps of product, price, promotion, and place (e.g., However, over the past decades, it has been argued that businesses across all
sectors should move toward supply chain management and, most recently, interactions, relationships, and networks (e.g., Day
2000; Grönroos 2000; Gummesson 1999; Hunt 2000; Peck et al. 1999; Webster 2000). The two different approaches to
marketing have been compared and contrasted in the table.

Table 1: Table showing importance of Customer Relationship Management.

Attributes of Marketing Old paradigm: New paradigm:

Transactions Interactions, relationships, and
networks

Actors
Nature of marketing exchange
Interaction between actors
Duration of marketing exchange
Marketing approach
The buyer has a generic need, and
the seller has a generic offer
The products or services are
standardised
The interaction between actors are
characterised in terms of, for
example, power, conflict, and
control
The duration of marketing
exchange is independent and
discrete
The marketing approach is the 4Ps
or the marketing mix
The buyer has a particular need,
and the seller has a unique offer
The products or services are
customised
The interaction between actors are
characterised in terms of, for
example, trust, commitment, and
co-operation
The duration of marketing
exchange is on-going
The marketing approach is
marketing through relationships,
networks, and interactions

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

Source: Day, G. S. (2000), “Managing market relationships,” Journal of the Academy of Marketing Science, 28, (1), 24-30.

Victor Danicu (2005) in his article titled “Performance in Service Marketing from Philosophy to Customer
Relationship Management” narrates that the contribution of services to the development of every national economy is in the
progress, they becoming the major contributor to the gross national product of most countries. In their turn, the customers
become more demanding and powerful in their relationship with service providers. They ask for more and new relationship.
The appropriate new marketing, known as Relationship Marketing, In order to establishing and maintaining long-term
relationship, relationship marketing should understand customer expectations, know the customers, evaluate services process,
obtain a proper service quality and adequately manage customers’ relationships. The service customer’s, expectation range to a
five dimension scale and have two levels which may be analysed into a model of service. A stimulus for relationship marketing
performance may be the quality of service. The objective and subjective quality of service is essential for the service customer
relationship management. In order to reach the goal of retaining actual customers, service companies should be prepared to
spot customers who leave and then analyse and act on information they provide. Managers should make sure the entire
organization understand the importance of keeping customers and encourage employees to pursue zero defections by trying
incentives, planning, and budgeting to defections targets. Most important, managers use defections as a vehicle for
continuously improving the quality and value of the service they provide to customer.
Santhanakumar D K etal (2011) has highlighted the research topics in the field of CRM in their article CRM a
Research Agenda. The research ideas discussed in this article include development of a scale to measure the depth of
relationship, stages of relationship development and underlying dimensions of business relationship
The stages of relationship include Contact, involvement, intimacy, detoriation, repair and dissolution. Research needs
to be carried out to understand the stage at which cross selling upper selling should be attempted. Some specific stage may bring
better results than others when it comes to seeking referrals from existing customers (D K Shanthakumar, 2011).

RESEARCH METHODOLOGY

Research Objective:

To Compare and analyse the customer relationship management activities followed by organised multi brand retailers
in apparel industry.

Scope of the Study:

The scope of the study is confined to organised multi brand retail apparels. The study compares and contrasts three
major retail outlets Shoppers Stop, Pantaloons and West Sides.

Research Design

The Research Design used in this article is case study. The researcher classified the retail apparel industry in to
organise and un organised retail players. The organised retail plays were further classified in to exclusive retail outlets and
multi brand retail outlet. Among the multi brand retail outlet three key players in the Indian market were identified for the study.
They are pantaloons, west sides and shoppers stop.

Nature of Data

The data used in this study are secondary in nature.

Sources of Data

The main sources of Data are the websites of the company Pantaloons Retail India Ltd., Shoppers Stop and West Sides.
The company’s annual reports are used as a source of secondary data in this article.
The annual reports of ministry of textile were also used as sources of secondary data for industry analysis.
Apart from the above mentioned sources journals, magazines and news articles are also used for gathering facts and data.

Types of Analysis used

SWOT analysis is used in this article for analysing organised multi brand retail outlets. In this article the SWOT
analysis is done in a comparative basis of the key players of. This gives a bird’s eye view of Strengths Weakness Opportunities
and Threats of key players in the industry and also acts as a powerful tool for comparison.

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

Limitations

The data used is secondary and hence the research should rely upon the facts and figures of the sources of secondary data.
The analytical tool used is SWOT hence the conclusion derived from the analysis is confined to the particular analytical tool
The study covered only three major players in the organised multibrand retail outlet. Other players like Mega Mart, Star
Bazaar, and Big Bazaar were not chosen for the study.

Table 2: Comparison of Multi Brand Apparel Retail Outlets

Name Shoppers Stop Pantaloons West Side

About the company ·Incorporated in the ·Incorporated in the ·Incorporated in the
year 1991 by K J year 1981 year 1999 TATA
Raheja Group group Trent Limited
·Public Limited It is a flagship
·
Company enterprise of Future Focuses on apparel,
·
·Offers wide variety of group accessories, home
National and accessories and
international brands ·Became public limited furniture
in the year 1991
Average Floor Size (Sq NA Around 28000 15000- 30000
Ft)

Business Strategy Offers concessionaire

· Targeting greater
· ·Has created a niche
space to brand where market share by for brand merchandise
by counters are entering in to formats creating a loyal
arranged by the such as departmental following
employees of stores, malls etc Company is targeting
·
concessionaries Drives most of the
· major cities like
Primarily catering life
· sales from private Mumbai, Chennai,
style retail business labels Ahemedabad etc.

Source: INDIA RETAIL APPAREL RESEARCH (North Bridge Capital, 2011)

Shoppers Stop

Shoppers Stop is an Indian department store chain promoted by the K Raheja Corp Group (Chandru L Raheja Group),
started in the year 1991 with its first store in Andheri, Mumbai Shoppers Stop is listed on the BSE. In 2013, Shoppers Stop has
61 stores in India. Shoppers Stop is Mumbai based retail store listed in BSE. It was founded in the year 1991. The revenue in the
year 2011-12 is Rs 19.30 and has over 14000 employees (Money Control, 2013). Shoppers Stop focus of the reposition was on
the service, ambience up gradation and customer connect. Shoppers Stop connects with the youth audience through adopting
the communication routes relevant to youth, up the fashion quotient through merchandising, and create ambience that connects
with the mindset. Shoppers Stop as a brand active on social media marketing platforms with Facebook and Twitter to connect
with this audience.

Pantaloon Retail India

Pantaloons Fashion & Retail Limited is an Indian premium clothing retail chain. As of November 2013, there are 76
Pantaloons stores in 44 cities. Pantaloons was previously controlled by the Future Group, but has now been taken over by
Aditya Birla Nuvo Limited (ABNL). (Pantaloons Fashion & Retail Ltd, 2013)

1992 An initial public offer (IPO) was made in the month of May.
1997 Pantaloons, India’s family store, launched in Kolkata.
2001 Big Bazaar, India’s first hypermarket chain, launched.
2002 Food Bazaar, the supermarket chain, is launched.

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

2007 Future Group crosses the $1 billion turnover mark.

West Side

Trent is the retail arm of the Tata group. Started in 1998, Trent operates Westside, one of the many growing retail
chains in India based in Mumbai, Maharashtra and Landmark, a bookstore chain with Brick and mortar stores in various
locations of India.
The company has a turnover of Rs. 357.6 crores and currently operates more than 60 stores in the major metros and
mini metros of India.

The company has retail stores in 32 major Indian cities under the Westside brand.
Trent also operates the hypermarket Star Bazaar in 8 Indian cities.
In Aug, 2005 Trent acquired a 76 percent controlling stake in Landmark, a Chennai-based privately owned books and music
retailer and completed 100 percent acquisition in April 2008.

Table 3: SWOT Analysis for Organised Multi Brand Retail Outlets:

SWOT ANALYSIS
Strengths Weakness Opportunities Threats
· Focus on Systems ·Pressure on retail lease ·Geographical · Economic
and Process rentals Reach Slowdown
· Distribution ·Employee Retention ·Sales growth · New Entrants
Networks · Competition
Shoppers · Enhancing
Stop Human Capital
· First Citizen

Pioneer in the
· PRIL is the World’s
· Huge untapped
· Shopping Culture:
industry, largest largest grocery retailer market Shopping culture
market share and and control resulting in has not developed
capitalization. huge span of control To take over,
· in India as yet.
merge with, or Even now malls are
Reputation for
· ·Has products across form strategic just a place to hang
value for many sectors, it may not alliances with around with family
money(Competiti have the flexibility of other global and friends and
ve pricing), some of its more retailers, largely confined to
convenience and focused competitors focusing on window-shopping
a wide range of specific
products all in markets
one store
Pantaloons

Presence in major
·
cities

West Side Growing at a

· Not much product range
· Rising
· Competition
·
faster pace for middle class Disposable from Local
Brand name of
· income Retailers
Tatas Lack of differentiation
·
Location
· Urbanisation
·
advantage Poor inventory turns
·
Source: Annual Reports 2012-13 Shoppers Stop, West Side, Pantaloons (Shoppers Stop, 2013) (West Side, 2013)

Shoppers Stop:

The major strength of Shoppers Stop Retail is that they have a keen focus on system and process and maintains

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

database of customers. It has an excellent distribution network for its supply chain management. Shoppers Stop knows the
importance of Human capital and trearts their employees as their assets. The weakness include the rent for the retail space and
retaining the employees. The opportunities for Shoppers stop are its geographical reach and sales growth. Economic slowdown
and new entrants to the industry are the major threats for the Shoppers Stop.

Pantaloons:

Pantaloons is the pioneer in the retail outlet in the industry and has the largest market share and market capitalisation.
It provides wide range of products all in one store. It has presence in major cities.
The major weakness of Pantaloon Retail India Ltd., is that the have multi presence in grocery and other retails
resulting in loss of control. It has a huge span of control. It has products across many sectors and may not have flexibility in
focussing in competitors.
Huge untapped market and opportunities to merge and form stategic alliances are the major opportunities for
Pantaloons Retail India Ltd.,
The major threat includes the shopping culture of Indians. Even now the malls are treated as a place to hang around
and largley confined to window shopping

West Side:

The major strengths of west side include their growth, brand name of TATA group and its precence in major cities and
across major shopping malls that is their location advantage.
They don’t have much product range for the middle class and lack of diffentiation and poor inventory turn over.
The growth of disposable income among the Indians and rapid urbanisation becomes the major opportunities and
Competition from the local retailers was the major threats for West side.

Customer Relationship Management in Shopers Stop

Shopers stop customers fall between the age group of 16 and 35 years, The majority of them being families and young
couples with a monthly income of more than Rs 20000 and annual spend of Rs 15000 on apparels. A large number of Non
Residant indians visit the shop for cultural clothes in the international enviroment. The target customers are upper middle class
and upper class

Customer rewards

Shopers stop custeomer loyalty programs is called First Citizen. The program offers its members an opportunity to
collect points and avail special benefits. Currently shopers stop has a database of over 2.5 lakh people who contribute for more
than 65 percent of sales in Shoppers Stop. They also offer Co branded credit card with CITI Bank for their members.

Customer Relationship Management in Pantaloons

To survive in the tough competition Pantaloon uses different strategies to attract customers and to retain them

Events
Fests
Loyalty Programs
Gift Vouchers

Pantaloons offers green cards as loyalty program to its customers as a part of CRM. Green card is passport to whole
new world of exculsive benefits and previleges

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

Table 4: Table Showing classification of customers in Pantaloons.

Benefits 7 Star 5 Star 3 Star 1 Star

Discounts on all 10 percent 7.5 percent 5 percent Gift voucher of Rs
purchases 200 on new
environment
Add on Card to 2 2 1 1
family members
End of sales Yes Yes Yes Yes
preview
Green Drop Yes Yes No No
Green Exchange 90 Days 60 Days 60 Days 60 Days

Customer Relationship Management West Side

Each west side outlet blends products, ambience, customer service and facilities to create a stand out shopping
experience. The stores are spacious (10,000 to 20,000 square feet each), designed to look and feel international, and products
are displayed attractively. The Westside outlets in Mumbai and Hyderabad have an additional drawing card. Westside has
complete confidence in the quality of their merchandise. If the customers has any grievances, they are duly addressed once
brought to the attention of the customer service staff. Each outlet has a separate Customer Service help desk for the assistance
of customers. The policy followed at every store is to satisfy customers with range , quality and value of products Return Policy.
In case of unused merchandise, merchandise can be returned within 30 days of purchase along with receipt. Customers can
either replace the concerned merchandise or get a complete refund on it. In case a customer has problems with the quality of
certain merchandise, it can be replaced or a complete refund can be provided on provision of receipt of the concerned
merchandise. If the customer is unable to provide a receipt, an exchange is provided , or a refund is given on the current or last
known selling price. Clubwest by Westside Clubwest is the membership program of west side. Clubwest is a two tier program
which consist of clubwest classic and clubwest gold. For the purchase above Rs 2000 West Side offers Clubwest Clasic
membership card at free of cost. For Purchases above Rs. 5000 West Side offers Clubwest Gold at free of Cost. Otherwise the
membership is charged at Rs 150 for Clubwest classic. Using the clubwest card, the members can earn points every time they
shop. The customers can view their points online and sign up for the latest styles in Westsides and can also know about the
offers. West sides provides promotions and best offers through mails Clubwest also provides offers like shop for Rs 2500 and
get chances of winning Audi, Harley Davidson, iPads and Mobile Phones. The west side also has colaboration with CITI Bank
for their POS purchases and also runs style matcher contest for the members.

Table 5: SWOT analysis for CRM Strategies:

Strengths Weakness Opportunities Threats

Shoppers · Maintenance of CRM Strategies
· Can maintain
· First Citizen
·
Stop Database of the concentrating more good relationship Membership
Customers on upper class and with the card doesn’t
· Repeat Purchase of upper middle class customers with classify
Customers customers the help of customers
· Purchase by Non database according to
residential Indians their needs.
Pantaloons Innovative ways to
· Customer's
· Wide range and
· Customers
·
attract customers Experience inside varieties of may become
Classification of
· store clothes will indecisive
customers by different attract more after being
star rating green cards customers from confused
various economic with varied
background offers
West Sides Spacious Interiors
· The repeat purchase
· Can attract varied
· .Competition
·
Help desk for assisting
· and frequency of range of from various
the customers visits to the store not customers with segments of
Club west innovative
· considered as a the help of CLUB retail apparel
ideas to retain criterion for west card. industry.
customers. classifying the
customers.

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.A Comparative Study On Customer Relationship Management Strategies In Organised Multi Brand Retail Apparels.

FINDINGS

Shoppers stop offers appropriate space to brand and their primay focus is life style retail. It focuses on system and
process that becomes their major strength. Employee retention becomes their major weakness. The geographical reach and
sales growth are the opportunities for shoppers Stop. Economic slow down and competition are the major threats. After
comparing the CRM Strategies of Shoppers Stop, Maintenance of Database of the Customers, Repeat Purchase of Customers,
and Purchase by Non residential Indians are their major strengths in CRM.
Pantaloons business strategy is targetting greater market share by diversification . It is having a great methodology for
classifying their customers. It has given different star ratings for their customers and has given them various offers and
discounts according to their star ratings as shown in Table 4. This will provide value to the customers and increase the bonding
of customers with Pantaloons.
West side targets major cities like Mumbai, Chennai and created a niche market for brand merchandise. It has a brand
name of TATAs. It is growing at a faster pace. Rising Disposable income of Indians and rapid Urbanisation are great
opportunities for West Sides. Location advantage is having spacious Interiors, help desk for assisting the customers and Club
west card is an innovative idea to retain customers. West Sides Can attract varied range of customers with the help of CLUB
west card

SUGGESTIONS

The National Council for Applied Economics and Research (NCAER) quotes that the middle class share in Indias
population will increase from 5 percent in 2005 to 20 percent in 2015 and more than 40 percent in 2040. Hence shoppers stop
instead of focussing on upper middle class customers and NRIs has to find innovative ways to attract middle income group of
customers as well.
Pantaloons has given various star ratings to its customers and have classified them based on their needs. But the
interior arrangement of apparels and customer’s experience inside the store are not as good when compared with West Sides
and Shoppers Stop. Pantaloons should concentrate on providing great customers experience inside the store.
West side is providing membership card with two classifications that is “Club West Classic and “Club West Gold”.
The criterial for classification is the amoun a customer is spending on single purchase. If a customer is buying more than Rs
2000 Club West Classic is offered and if he is buying more than Rs. 5000 Club West Gold is offered and customer has to pat Rs
150 if he is purchasing less than Rs 2000 and wants to avail a membership card. The repeat purchase and frequency of visits to
the store not considered as a criterion for classifying the customers. This may lead to mispostioning of customers in certain
cases. Thus West Side for classifying their customer base.

CONCLUSION:

The three multi brand retail outlets Shoppers Stop, Pantaloons Retail India Ltd and West Side are operating in same
platform and more or lesss the same customer base. But their business strategies differ based on their Segmentation Targetting
and Positioning.
Customer relationship managemet is very essential to sustain and grow in business. This article compares the CRM
strategies followed in organised multibrand retail apparels like Pantaloons, Shoppers Stop and West Side.

As a concluding note Shoppers Stop should concentrate on attracting more customers from middle class segment.
Pantaloons should concentrate on providing rich customer experience inside the store.
West Side should concentrate on retaining and parenting their customers by proper measures for classificatons

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