“TO STUDY THE IMPACT OF CRM INITIATIVES IN

INCREASING SALES WITH RESPECT TO ORGANISED RETAIL

STORES”

A Project Submitted to
University of Mumbai for partial
completion of the degree of Master of
Commerce (Business Management)
Under the Faculty of Commerce

By
KINJAL BHARAT SHETHIA

SEMESTER IV
SAP ID: 45211190046

Under the Guidance of

Dr.Parveen Kaur Nagpal

SVKM’s Narsee Monjee College of Commerce and Economics

(Autonomous)

1
 April 2021
DECLARATION

I the undersigned Ms. KINJAL BHARAT SHETHIA here by, declare that the work
embodied in this project work titled “TO STUDY THE IMPACT OF CRM
INITIATIVES IN INCREASING SALES WITH RESPECT TO ORGANISED
RETAIL STORES” is own contribution to the research work carried out under the
guidance of Dr.Parveen Kaur Nagpal and is a result of my own research. Work and has
not been previously submitted to any other University for any other Degree/ Diploma to
this or any other University. Wherever reference has been made to previous works of
others, it has been clearly indicated as such and included in the bibliography. I, here by
further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Signature of the Student Signature of the Guide

2
 Acknowledgement

Every research big or small is successful largely due to the efforts of a number of
wonderful people who have always given their valuable advice or lent a helping hand. I
sincerely appreciate the inspiration; support and guidance of all those people who have
been instrumental in making this research a success. I am grateful to our Principal Dr.
PARAG AJAGAONKAR, for giving me the opportunity to do this research and
providing his immense support throughout the process of
this research.
At this juncture, I am deeply honored in expressing my sincere thanks to my research
guide Dr.PARVEEN KAUR NAGPAL, for directing me through the whole process of
my research and providing valuable insights leading to the successful completion of my
research.
My sincere thanks to all the teachers, Assistant Professors, and other faculty members of
Narsee Monjee College of Commerce and Economics (Autonomous) for their kind
cooperation and assistance throughout the research in learning new concepts related to
my research.
I would also like to thank all the library and non-teaching staff members of our college
for providing constant support and being very cooperative and providing invaluable
material for my research. Last but not the least I place a deep sense of gratitude to my
family members and my friends who have been constant source of inspiration during the
preparation of this project work.

3
 SVKM’s Narsee Monjee College of Commerce & Economics
(Autonomous)

Certificate
This is to certify that Ms.KINJAL BHARAT SHETHIA has worked and duly
completed his Project work for the degree of Master of Commerce (Business
Management) under the Faculty of Commerce and his project is titled, “TO STUDY
THE IMPACT OF CRM INITIATIVES IN INCREASING SALES WITH
RESPECT TO ORGANISED RETAIL STORES” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is her own work and facts reported by her personal findings and investigations.

Seal of the Name and

College
Signature of
Guiding
Teacher
Date of submission:

External Examiner PRINCIPAL

(Signature & Date) (Signature & Date)

Internal Examiner
(Signature & Date)

4
 TABLE OF CONTENTS

SR. NO CONTENT PAGE NO

COVER PAGE 1

DECLARATION 2

ACKNOWLEDGEMENT 3

CERTIFICATE 4

1 INTRODUCTION 9-15

1.1 INTRODUCTION 9

1.2 OBJECTIVES OF THE STUDY 11

1.3 IMPORTANCE/NEED TO STUDY 12

1.4 LIMITATIONS OF THE STUDY 13

1.5 STATEMENT OF PROBLEM 14

1.6 HYPOTHESIS 15

2 RESEARCH METHODOLOGY AND DESIGN 16-17

3 REVIEW OF LITERATURE 18-21

4 ANALYSIS OF ORGANISED RETAIL STORES 22-38

4.1 INTRODUCTION 22

4.2 CHALLENGES FACED BY ORGANISED RETAIL SECTOR 23

4.3 OPPORTUNITIES FOR ORGANIZED RETAIL SECTOR 26

4.4 CATEGORY BREAKDOWN OF ORGANISED RETAIL IN

26
INDIA

4.5 MAJOR FORMATS OF IN-STORE RETAILING 27

4.6 BENEFITS OF ORGANISED RETAIL SECTOR IN INDIA 28

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 4.7 VARIOUS ORGANIZED RETAIL FORMATS 29

4.8 IMPACT OF COVID-19 ON RETAIL INDUSTRY 35

5 CUSTOMER REALTIONSHIP MANAGEMENT 39-57

5.1 INTRODUCTION 39

5.2 GOALS AND OBJECTIVES OF CRM IN ORGANISED

41
RETAIL STORE

5.3 CRM IN RETAIL INDUSTRY 43

5.4 NEED FOR IMPLEMENTING CRM IN ORGANISED

44
RETAIL STORES

5.5 BENEFITS OF CRM 45

5.6 THE CRM PROCESS CYCLE 47

5.7 ARCHITECTURE OF CRM IN ORGANIZED RETAIL

49
SECTOR

5.8 THE IDIC - MODEL 51

5.9 VARIOUS TECHNIQUES OF CRM 52

5.10 IMPLEMENTING CRM TECHNOLOGY IN THE

52
ORGANIZED RETAIL SECTOR

5.11 KEY CRM TRENDS IN 2021 56

6 ANALYSIS AND INTERPRETATION 58-63

7 FINDINGS OF THE STUDY 64-65

8 CONCLUSION AND SUGGESTIONS 66-68

8.1 CONCLUSION 66

8.2 SUGGESTIONS 67

9 CASE STUDIES 69-77

10 BIBLIOGRAPHY AND ANNEXURE 78-81

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10.1 BIBLIOGRAPHY 78

10.2 ANNEXURES 79

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TO STUDY THE IMPACT OF CRM
INITIATIVES IN INCREASING SALES WITH
RESPECT TO ORGANISED RETAIL STORES
ABSTRACT
The purpose of this research was to increase knowledge and understanding of how
retailers use business intelligence and data mining tools to implement customer
relationship management (CRM) in retailing. Specific objectives were to (1) identify
organization and infrastructure requirements for CRM effectiveness, (2) identify CRM
objectives and goals of retail companies and (3) identify CRM strategies used by
organized retail companies. Organised retailers goals/objectives and strategies focused on
marketing, customer service, understanding customers through data analysis and
increasing acquisition and retention through customer loyalty programs. There are some
challenges that organised retailers face as they implement a more customer-centric
business strategy. CRM helps to gather information about the customers, including
preferences and demographic data. It can be used to segment the market and customize
the approach to each group of customers. For example, if you find you have a large
number of young families in a segment, you can create a family-friendly retail
environment. If the data shows to have many seniors, then ramps for wheelchairs can
be installed to make the store more easily accessible.

The effect of segmentation based on CRM data is to adjust the retail strategies to better
suit the customers. The data gathered within a CRM system lets you not only target a
market segment with promotions that appeal to its members, but also to target
individual customers. A CRM system keeps records of customer purchases and
customer service calls.One can keep track of the products each customer has purchased
and whether there have been any warranty or dissatisfaction issues with the purchase.
This information allows to send out special offers to customers. Such a strategy keeps
the products in front of the customer just when he might need them and gives him the
benefit of lower pricing if he buys from the same retailer again. On the other side, the
costs of such a targeted promotion are lower than marketing to a large group and

8
receiving only a few responses. The overall effect of CRM is to increase the retention
of customers by serving them in a more focused and convenient way.

CHAPTER 1

INTRODUCTION

1.1 INTRODUCTION
The focus of business today has been shifted from product oriented strategy to customer
oriented strategy. Now economies are competing for consumers. Today the focus is
'Serve Consumer for a profit'. Today people look for better quality product at cheaper
rate, better service, better ambience for shopping and better shopping experience.
Organized retail promises to provide all these. Today’s conditions for doing business
are changing rapidly. There are some aspects that are of great importance for the new
situation that companies are facing. First of all the lifestyle of people are changing and
consequently the patterns of consumption.

Nowadays more women are working, the number of elderly people is increasing and
often nuclear families are broken up, which implies more single homes. So customers
desire to be served in a personal manner with direct communication. Each customer
would often like unique solutions where their individual needs are taken into account.
Another change is due to the rapid development of technology. New technologies for
distributing and collecting information have affected both companies and customers.
Customers are continuously informed through different communication medias.
Sometimes they are drowning in too much information from different companies but on
the whole the customer knowledge is increased substantially. As the knowledge
increases the customers discover new options.

With new communication, the media Companies can change their way of marketing
and gathering customer data .The competition in the market is increasing domestically
as well as globally with such intense markets , and in order to reach success, companies
must find new long-term competitive advantages. It is not always enough to rely on
advanced technology and high quality, because soon the competitors will reach the
same level. The solutions must be tailored after the customers’ specific needs and

9
wants, with the purpose to increase the customers’ experienced value of the product or
service. All these changes imply that there is an increasing need for new ways of
thinking within the area where the dimension got focused more towards customer
orientation. This diverse and uncertain environment has forced companies to restructure
themselves in order to increase their chances to survive and grow. This has led to that
new approaches that have emerged in the marketing research. The customers should be
viewed as individuals rather than masses; a source of revenue rather than a cost, and the
supplier’s task is to create value for the customer, not to win over the customer.

Retail industry is one of the most growing industries in India. Retailers are adopting
different CRM initiatives to retain the customer. In India majority of organized retailers
are using suitable loyalty programmes which encourages repeat purchase.

CRM initiatives provides a lot of information relating to the customer expectations,

attitudes and pattern. This information is a valid input to plan and facilitate the task of
retaining customers. CRM contributes to growth, profitability and lower customer
defection. CRM initiatives and thereby customer retention is also responsible for the
increase in efficiency ratio of the customers.

CRM, or customer relationship management, is a company-wide business strategy

designed to reduce costs and increase profitability by focusing on customer satisfaction
and loyalty. CRM brings together information from all data sources within an
organization (and where appropriate, from outside the organization) to give one,
holistic view of each customer in real time. 

There are three key elements to a successful CRM initiative: people, process, and
technology. It's a strategy used to learn more about customers' needs and behaviours to
develop stronger relationships with them. Good customer relationships are at the heart
of business success.

Organized retail is a sector which consists of the companies which are associated with
production or sales of goods and services that operates as private limited organizations
which are governed by Companies Act. The organized retail sector can be characterized
as follows-

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 1. The retail setups are owned by companies.
2. Few of the employees on the payroll of the organization are on contract.
3. The employees are governed under the act of minimum wages.

Organized retail is associated with customers walking into the stores and buying their
necessary products. Huge quantities of goods are stocked up in the retail store and huge
discounts which are gained by the company are passed down to the customers.

CRM [Customer Relationship Management] is a system that aims to improve the

relationship with existing customers, find new prospective customers, and win back
former customers. CRM software facilitates collecting, organizing, and managing
customer information all in one place.

CRMs are no longer just for large-scale organizations with huge databases of
customers, but are advantageous to even small and medium sized organizations.
Designed to keep track and streamline your processes, a CRM system can be one of the
most powerful management tools in your arsenal. Some of the incredible outcomes
from CRM systems include improved customer service, deepened customer
relationships, retention of new customers, and much more successful sales and
marketing initiatives.

For most organizations, a combination of retail CRM strategies will prove the best way
to retain customers and build long-term loyalty. And,it’s essential to build these
initiatives on a strong customer service foundation and to offer the products and
services your target customers truly want. 

The premise of CRM is that once a customer is locked in, it will be advantageous to
both the organization as well as customer to maintain relationships and would be a win-
win situation for both. Through loyalty programmes, firms can potentially gain more
repeat business, get opportunity to cross-sell and obtain rich customer data for future
CRM efforts.

1.2 OBJECTIVES OF THE STUDY

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The purpose of this study is as follows-

 To know the organised retail scenario in a nut-shell,

 To explore the impact of Customer Relationship Management in increasing the
sales volume of organized retail stores ,
 To identify areas for improved customer retention and to attract new customers
by offering a perfect environment to organized retail store,
 To suggests the organizations regarding CRM practices based on the analyses,
findings and conclusion.
 Evaluate the various CRM techniques adopted by organized retail firms and
stores.
 Examine the benefits of CRM to the retailers.

1.3 IMPORTANCE/NEED TO STUDY

A customer relationship management system is capable of collecting and storing useful
customer information about customer base. With automated data collection or manual
entries, one can build a great wealth of powerful information that you can use to
improve your company and make more money. CRM systems are capable of gathering
and storing data about individual customers. Such data includes:

 Demographic information
 Shopping patterns
 Purchase history
 Preferences
 Contact information
 Customer service notes
 And more

There’s really no limit to how detailed one can get when building out a customer
profile. There are a lot of CRMs on the market today that are able to automate most of
the data entry so long as they’re properly integrated with other platforms to receive

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information. Other platforms can include e-commerce software, inventory control,
payment processing software, etc.

Through understanding CRM in the retail sector the companies can,

o Make your customers happier

o Strengthen customer loyalty
o Improve company performance
o Spend less money on ineffective marketing
o Create successful marketing campaigns with a higher ROI
o Increase customer retention rate
o Encourage repeat sales and return customers

Customer relationship management (CRM) is all of the activities, strategies and

technologies that companies use to manage their interactions with their current and
potential customers. A saying frequently heard and said in many businesses is
"customer is king." CRM helps businesses build a relationship with their customers
that, in turn, creates loyalty and customer retention. Since customer loyalty and revenue
are both qualities that affect a company's revenue, CRM is a management strategy that
results in increased profits for a business. At its core, a CRM  tool creates a simple user
interface for a collection of data that helps businesses recognize and communicate with
customers in a scalable way. CRM can be implemented in a huge array of methods:
websites, social media, telephone calls, chat, mail, email and various marketing
materials can all be integrated into a CRM solution. Due to CRM's diversity, it benefits
larger businesses and maintaining a CRM tool is the basis for a scalable sales and
marketing system. Any company will benefit from maintaining a record of which
conversations, purchases and marketing material can be associated with leads and
customers.

1.4 LIMITATIONS OF THE STUDY

1. For the purpose of this study a convenience sampling method was used. As this type

13
 of sampling is a non-probability method it is thus seen as a limitation because the
results stemming from the research cannot be generalised.
2. Another limitation of the study would be the relatively small sample size. This
would thus bring about issues of generalisability of the study to the entire
population of customers.
3. The method of data gathering is quantitative, limiting the quality of responses as the
study did not consider utilising qualitative measures. There is also a possibility that
information gathered from the questionnaires did not provide for customers to make
any comments as the questions force particular answers to be chosen. In this way,
the particular perceptions of customers with reference to organized retail stores
cannot be taken into account.
4. Issues relating to language and literacy levels were not anticipated as the
questionnaire was only made available in English and this therefore can be seen as a
limitation.
5. Another limitation of the current study could be the quality of responses collected
from the sample. The possibility exists that the respondents could have just filled in
the questionnaire for the sake of filling it out, undermining the quality of the
research findings.
6. The results of the current research study may be considered as uncertain and
exploratory/investigative.
7. The limitation of the research is further scope for the investigation on the concept of
impact of CRM initiatives in increasing sales from the perception of organized retail
stores. As the research is limited and is confined to the views and ideas expressed
by the customers surveyed. There has to be further study combining both
qualitative and quantitative methods of research. As the research is in the initial
stage of development could not adapt to the quantitative research methods. Study
does not rule out the possibility of the suggested factors or more available
in the organization but has a view that even if these factors are being put in
practice is by individual initiatives or few organizations could be valuable. It is
also being understood that impact of CRM Initiatives may differ from one
organization to another separately and combined.

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1.5 STATEMENT OF THE PROBLEM
This study figures out the relation of CRM Initiatives and sales volume of organized
retail stores. This study also identifies the demographics so that an organized retail
stores can focus on the various CRM Initiatives to improve the relationship with their
customers and increase their sales and organizational efficiency .

1.6 HYPOTHESIS OF THE STUDY

Ho : There is no positive impact of Customer Relationship Management in increasing
the sales volume.

H1 : There is a positive impact of Customer Relationship Management in increasing the

sales volume.

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 CHAPTER 2

RESEARCH METHODOLOGY AND DESIGN

To study the impact of CRM initiatives in increasing sales with respect to organised
retail stores a descriptive study has been undertaken through a survey by forming a self-
constructed questionnaire considering the research objective. Convenient Non-
Probability sampling method has been adopted in this study to acquire data from
respondents as the sample size is small. A Convenient Non- Probability sampling
method is easy to implement and cost-effective that gets higher response rate. This is a
research with an exploratory research design and quantitative type of research.

A descriptive hypothesis is used. Descriptive hypotheses encourage researchers to

crystallize their thinking about the likely relationships. There are three main types of
descriptive methods: observational methods, case-study methods and survey methods.

Non-Parametric test is used for analysis of the data. Non parametric tests are used when
your data isn't normal. Non parametric tests are also called distribution-free tests
because they don't assume that your data follow a specific distribution. Chi square test
for independence of the attributes is used because the assumption that the data is
normally distributed need not hold for Chi square test for independence of the attributes
. The Chi-Square test is a statistical procedure used by researchers to examine the
differences between categorical variables in the same population. The Chi-square test is
intended to test how likely it is that an observed distribution is due to chance. It
measures how well the observed distribution of data fits with the distribution that is
expected if the variables are independent. A Chi-Square test is performed to validate or
provide additional context for these observed frequencies.

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A cross sectional study has been conducted. a cross-sectional study (also known as a
cross-sectional analysis, transverse study, prevalence study) is a type of observational
study that analyzes data from a population, or a representative subset, at a specific point
in time—that is, cross-sectional data.

120 questionnaires were distributed out of which 100 respondents responded.100

respondents belonging to different age-group, have been targeted in the sample for the
survey and all participated in the survey. After sorting valid responses were used for
further analysis. Some of the data is secondary data and has been collected from books,
internet and other relevant documents such as magazines, journals and web resources
and websites are other sources. Data was collected through the use of a specified
measuring instrument completely self-developed and standardized questionnaire. The
questions were nominally scaled. The scale used for measurement was the Likert
Scale .In this research, the quantitative approach in the Likert scale research design was
used as it appeared to be more appropriate in exploring the effectiveness of CRM
practices in increasing the sales volume in Organized Retail Stores.

This research population consisted of female, male and other respondents. The sample
of 100 respondents is choosen. The respondent were selected using Convenient Non-
Probability random sampling method. A structured questionnaire was used to collect
data for this research.

The purpose of the study is descriptive in nature as the research study aims at gaining
insights into CRM, and effectiveness of CRM practices in increasing the sales volume
in Organized Retail Stores.

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 CHAPTER 3

REVIEW OF LITERATURE

The international business environment has changed the way the organizations should
sight upon conducting business today. The globalization is erasing the national
boundaries and today companies are competing on a global market. This rapid change
in the global environment puts high demands on companies to quickly be able to adjust
to new situations in order to stay competitively strong. Furthermore, the economic and
financial integration have created strong links between companies and the global
macro-economic environment. No company in this integrated world will remain
unaffected of what happens in the world economy.

The increased competition on the global marketplace has led to that companies today
focus more on relationships with their customers and are therefore leaving the
transactional-based point of view. In order to meet these international environmental
changes, companies use customer relationship management (CRM) in order to create
competitive advantage and thereby becoming more profitable companies.

Berry (1983) defines customer relationship management as attracting, maintaining and

enhancing customer relationships in multiservice organizations. Berry stressed that the
attraction of new customers should be viewed only as intermediate step in the
marketing process. Solidifying the relationship, transforming in different customers into
loyal ones and serving customers as clients should also to be considered as marketing.
Berry outlined five strategy elements for practicing customer relationship management:
developing a core service around which to build a customer relationship, customizing
the relationship to the individual customer, augmenting the core service with extra

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benefits, pricing services to encourage customer loyalty and marketing to employees so
that they, in turn, will perform well for customers.

Customers are more likely to form relationships with individuals and with the
organizations they represent than with goods. Services are performances where the
employees play a major role in shaping the service experience. The service setting is
especially conducive to customers forming relationships with individual service
providers. Traditionally, the sales force is the firm's main means of customer contact,
and thus the integration of selling with other CRM activities is critical. Salespeople not
only serve as customer relationship managers to boost company profits through selling,
but they also act as customer feedback conduits to enrich other important activities of
the firm such as product design, customer service, production, and research and
development (Crosby, Evans, and Cowles 1990; Dwyer, Schurr, and Oh 1987). Such
relationship management activities have been seen as central to a firm's success. (Berry
1995; Day 2000; Dwyer, Schurr, and Oh 1987).

Indeed, they have induced a number of related technologies that have changed the way
salespeople build and maintain customer relationships. Viewed as a set of technologies,
CRM has additional benefits. Electronic data interchange (EDI), for example, can
reduce human errors in ordering and decrease a salesperson's time spent with straight
reorders, allowing him or her to maintain more customer relationships than possible
under a paper based system (Hill and Swenson 1994; Jones, Sundaram, and Chin 2002).
From better information-sharing technologies, activities such as post sale follow-up can
be made easier as well.

Research suggests that customer satisfaction, fundamental concept of relationship

management is important in achieving and retaining competitive advantage.
Organizations and research studies have discovered that retaining current customers is
much less expensive than attracting new ones. The best way to retain customers is to
keep them satisfied, a number of studies have shown that customer satisfaction can lead
to brand loyalty, repurchase intention and repeat sales, in short customer retention.
Customer retention, in turn, seems to be related to profitability.

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CRM is the most certain way to increase value to the customers and profitability to the
practicing organizations. Some have argued that issues such as establishing trust with
customers, anticipating customer needs, providing personalized service, nurturing
ongoing relationships, and creating new and profitable customer business strategies will
remain dependant to the personal selling role. The effect that CRM-related strategies
and technologies will have effect on the sales of the organization. CRM is a strategic
view of how to handle customer relations from a company perspective. The strategy
deals with how to establish develop and increase customer relations from a profitability
perspective. Based upon knowledge about the individual customer’s need and potential,
the company develops customized strategies describing how different customers should
be treated to become long-term profitable customers. The basic philosophy underlying
CRM is that the basis of all management activities should be the establishment of
mutually beneficial partnership relationship with customers and other partners in order
to become successful and profitable.

In order to more efficiently manage customer relationships, CRM focuses on effectively

turning information into intelligent business knowledge. This information can come
from anywhere inside or outside the firm and this requires successful integration of
multiple databases and technologies such as the Internet, call centers, sales force
automation, and data warehouses. CRM provides management with the opportunity to
implement relationship marketing on a company-wide basis.

However, for CRM to be successful, all activities in a company need to be managed in

combination to reach success. In some companies there is the belief that good market
planning is equal to good CRM. It must be clear that CRM is not equal to market
planning, since they are founded on two different marketing approaches. However, the
authors add that although the information in market research is CRM, it is only a small
part of the CRM that is needed in order to create profitable customer relationships.

CRM is important because it provides enhanced opportunities for using data better in
order to understand customers and implement improved relationship marketing
strategies. Customers who have developed a relationship with a service business expect

20
to receive satisfactory delivery of core service. There exist different types of relational
benefits through effective customer relationship management.

A set of relational benefits reported by respondents can be described as psychological

benefits. Customers realize that there is often a feeling of comfort and security in
having developed relationship with the service provider. A tiny proportion of a
company's customers will generate the bulk of its profits. Identifying, collecting and
keeping these clients are the very essence of customer relationship management. CRM
means better management of customers and the relationship with them that enable
information flow, such as pricing, inventory and planning, in both directions. Focuses
on what keeps a good customer coming back is good service and today’s economic
climate demands more than ever that customer acquisition, profitability, and retention
remain central to an organization’s business. But that cannot be done if customers are
running out the door before organizations even discover who they were or, more
important, what they potentially were. To keep them in the store, organizations need to
offer a better customer experience. According to Dyche (2001), The benefits of CRM
need to be measured on a long-term relationship with customers and to generate long-
term benefits through increased customer satisfaction and retention. The challenge of
CRM is to overcome hurdles, minimize risk and also guarantee results. Rather than
seeking all the answers before undertaking an initiative, the organization, must define a
clear roadmap of their objectives.

The study is attempted to review the effective relationship between CRM, customer
satisfaction and customer loyalty of the organized retail organization by studying the
main elements or factors of CRM.

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 CHAPTER 4
ANALYSIS OF ORGANISED RETAIL STORES

4.1 INTRODUCTION

The retail sector is one of the fastest growing sectors in India with several players
entering the market. But not everyone could taste the success because of huge capital
investments that are required to compete with other similar companies. The Retail
Industry has got ample opportunities to flourish upon though there are number of
challenge factors which they need to overcome. The Retail sector has undergone
tremendous changes in last decade. It has witnessed huge improvements in political,

22
social and economic environment which has directly or indirectly affected the
consumption pattern.

The modern retail sector in India is featured with sprawling shopping centers, multiplex
malls and huge complexes offering food, entertainment and shopping all under one
roof, the entire concept of shopping has been altered in terms of the formats and the
mindset of consumers, creating a revolution in Indian shopping. The term retailing is
the transaction between the seller and consumer for personal consumption. It does not
include transaction between the business or when the purchase is for reselling. The
retailers purchases goods from the manufacturer and sell the goods to end consumers
for final consumption for a profit. The retailer is last point in the supply chain and
performs various important functions like providing valuable information to
manufacturer about the product and creates various utilities for the consumers.

Retailing itself can be further divided into organized and unorganized sector.

Organized Sector: The total concept and idea of shopping has undergone a drastic
change in recent years. Modern retailing has entered into the Indian retail market. The
growth of organized retail sector is a result of higher growth in Indian economy, which
has resulted in greater purchasing power among the Indian population. Factors like
knowledgeable consumers, huge investments by venture capitalist and entry of retail
giants have also contributed to the growth of Indian retail sector. However the
government of India has laid few restrictions because of which there is a hindrance in
getting a license to start a retail outlet.

Unorganized sector: In India the unorganized sector remains dominant as it enjoys

many advantages. The major advantage is the low operating cost and less investment
required as it directly creates an impact on the pricing of the products. The unorganized
retailers are offering great opportunities for modern retailers for opening stores in rural
areas.

The Indian retail industry is playing vital role in the economic growth of the country.
The shopping concept is moving in and around hypermarkets, supermarkets, and
specialty stores and in other formats. The factors like changing life style, constraint of

23
time, heavy traffic on the roads, increase in disposable income has led the way for new
types of retail formats. Getting the right product at right time at lowest possible cost is
an advantage of consumers in the edge of retail transformation.

4.2 CHALLENGES FACED BY ORGANIZED RETAIL SECTOR

In India the organized retail sector is featured with small number of players trying to
create a new paradigm. In order to grow substantially the Indian retail sector has to
attract leading Indian and foreign players who can invest more. In the era of
globalization and liberalization a major challenge to the organized retailers are the
knowledgeable customers. The main reason behind this is that the consumers are aware
of his/her value of money and their purchasing power.

In today’s consumer market the product quality and service quality are two major
mantras the retailers are looking forward as these consumers needs more and more for
less. Technology remain a biggest challenges faced by the organized retail sector
mainly due to the factors like availability, feasibility and adoption of technology. The
successful retailers are more customers centric who dwell upon technology to gain
advantage in the market place. Major functional areas like understanding the customer
preference, tracking customers, enterprise management tools and so on.

The major setback for the organized Indian retail sector is opposition of government to
FDI.FDI allows foreign players to operate in India. This would result in healthy
competition and ultimately bringing down the prices and thus making the economy
stronger. An inefficient distribution channel is another major setback for the organized
retailers. The main task of any retailer is delivering the right goods at the right place
and at the right time. The organized retailers are under great pressure to improvise their
supply chain system and distributions channels to satisfy their customers and to achieve
a level of quality.

To understand the customer behaviour and their brand loyalty is major challenge faced
by the organized retailer. There are many factors that influence the loyalty and
commitment of a customer like product value and quality, their satisfaction etc. The

24
retailers can increase their profit by retaining the customers and thereby decreasing the
rate at which customer defect.

There is a huge competition from the unorganized sector that poses a big challenge to
the organized retailing. The traditional retailing is century old and enjoys various
benefits like low cost, sole proprietorship, less labour cost and less tax to be paid.
Unorganized sector is more customers friendly and offers benefits like credit facilities,
home deliveries and also adds personal touch to the transaction that is highly
impossible in organized retailing.

The single most important factor that challenges organized retailing is the cost of land
or the rental rates. As the store location is an important factor to determine the success
of the retailers, the cost of land or building plays a major role. The rules and regulations
imposed by the government is also very tedious and cumbersome. Thus the organized
retailers have to bear the pain and pass on the high cost to the customers. Infrastructure
in retail refers to proper roads, parking facilities, warehouses and proper connectivity.
The organized retailers face a heavy loss due to lack of proper infrastructure. There is
improper power supply in many part of the country.

Organized retail outlets use large volume of electricity and thus with absences of power
they would be lifeless. In order to ensure regular flow of work they need to have huge
power backups. This would in turn add on to the cost.

Last but not the least is the cost of operation. Since there is no proper structure
available for the organized retailers in India they cannot concentrate on their core
competency like other counterparts do in developed nations. The organized retailer in
India needs to concentrate in area like supply chain management, logistics, sourcing
and warehousing, merchandise management and forecasting of trends etc. High cost of
operation arises due to high labour cost, high rental, high cost of maintenance high
taxes etc.

A recent study says that retailers are unable to recover the investments made in loyalty
programmes. This is mainly because only less than fifty percent of customers increase
their spending after enrolling in a loyalty programme. The dilemma of the practitioners

25
has been a part in multiple deliberations with the academic community on the
effectiveness of loyalty programmes in retailing.

The challenges were centered on the following aspects like quality of customer data, to
align the processes and people, the unavailability of skilled professionals and
ascertaining the timing of customer needs. It is also challenging to put to the availed
data to the best use using the right technology, relating the customer data to customer
preferences, to get reliable real time data spread across channels and lastly to have a
360- degree overview of customers to have an exhaustive understanding.

Apart from above mentioned challenges the organized retailers needs to focus on Indian
consumer attitude and buyer behavior and also concentrate on rural and urban
consumption pattern.

4.3 OPPORTUNITIES FOR ORGANIZED RETAIL SECTOR

There are many factors which act as opportunities for the organized retail players and
has a positive impact. The higher bargaining power of the retailers with the suppliers is
another opportunity for organized retailing. Big retailers purchase in bulk and enjoy
low prices and pass this benefit to their consumers as well. Large retailers operate on
low margins and reap the benefit of economies of scale.

In house brands or private labels are introduced by the retailers to increase the sales and
thereby increasing the market share. Private labels are used by the retailers to
differentiate themselves from the competitors. Another big opportunity for the Indian
retailers are the changing age profile of spenders. This would result in high level of
spending on leisure activities and also the consumption level would go up on a higher
side. It would also result in higher investment in economy and generate trade
opportunities. There is a proportionate increase in spending of the general public also in
recent years.

Consumer spending like the increased trend of impulsive shopping is the major source
of opportunity for the organized retailers. An impulse buy is an unplanned purchase, a

26
buying decision taken after seeing the merchandise. This kind of buying is usually seen
in youngster and would be a big boon for the organized retailers. Also the fast growing
middle class population is major boost for the organized retailers.

4.4 CATEGORY BREAKDOWN OF ORGANISED RETAIL IN

INDIA

Organized retail in India is currently dominated by players that have been in the market
for atmost two decades. Pantaloon Retail is the market leader with its Wal-Mart
multipurpose low cost stores as well as specialized clothing retail outlets. Shopper’s
Stop operates multi-storey, malls in the major metros. Number of other individual brand
retailers like Haldiram, Raymonds, Reliance and Titan also represent organized retail in
India. Today, a number of major business houses in India are launching massive
organized retail ventures. They are leveraging their enormous cash reserves and
decades of experience of doing business in the Indian economy and reaching out to the
Indian consumer to launch a number of multi-store retail chains.

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4.5 MAJOR FORMATS OF IN-STORE RETAILING

Format Description Value proposition

Branded stores Exclusive showrooms Complete range available
either owned or franchised for a given brand, certified
out by a manufacturer. product quality.
Speciality stores Focus on a specific Greater choice to the
consumer need, carry most consumer, comparison
of the brands available. between brands is possible.
Departmental stores Large stores having a wide One stop shop catering to
variety of products, varied consumer needs.
organized into different
departments such as
clothing, house wares,
home shopping, furniture,
appliances, toys, etc.
Supermarkets Extremely large self- One stop shop catering to
service retail outlets. varied consumer needs.
Discount stores Stores offering discounts Low prices.
on the retail price through
selling high volumes and
reaping economies of
scale.
Hyper market Larger than supermarket, Low prices, vast choice
sometimes with a available including
warehouse appearance. services such as cafeterias.
Convenience stores Small self-service formats Convenient location and
located in crowded urban extended operating hours.
areas.
Shopping Malls An enclosure having Variety of shops available
different formats of in- to each other.

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 store retailers, all under
one roof.

4.6 BENEFITS OF ORGANISED RETAIL SECTOR IN INDIA

a. Link with Agriculture

b. Link with Manufacturing
c. Boost to Exports
d. Impact on Growth and Productivity
e. Impact on Employment and Prices
f. Impact on Government Revenues
4.7 VARIOUS ORGANIZED RETAIL FORMATS

Formats Examples Logo

Hypermarkets Big Bazaar

Cash and Carry Metro

Departmental Stores Lifestyle

Supermarkets D-Mart

Malls Phoenix Marketcity

Speciality Stores Raymonds

Category killers PetsMart

Discount stores Walmart

Convenience stores Reliance Fresh

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1. Hypermarkets –
A Hypermarket is a retail store that combines a department store and a grocery
supermarket. Hypermarkets offer a wide variety of products such as appliances, clothing,
and groceries. Hypermarkets offer shoppers a one-stop shopping experience.

Advantages –

• lower prices,
• longer opening hours,
• greater product assortment
• better adaptation to consumer shopping habits.
Disadvantages –

• Increased cost of accommodating the wide variety of products

• Customized service not provided
2. Cash and Carry –
A cash and carry store is different from regular retail chains which target professional
customers rather than end-consumers. This concept is based around self-service and bulk
buying and serves registered customers only.

Advantages –

• Best Prices
• Meet all different needs under one roof
• Quality Guaranteed
• Great value for money
Disadvantages –

• Limited Market
• No Large Purchases
• Fraud And theft
3. Departmental Stores –

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Departmental stores are large scale retail stores selling under one roof under a single
control. They deal in a variety of goods. They are divided into different departments,
each selling a particular merchandise. Departmental stores are of French origin.

Advantages –

• Economies of large scale buying

• Convenience in shopping
• Offer many services and facilities to customers
• The cost of operation is cheaper.
• Convenient location
Disadvantages –

• High operational costs

• Require huge capital for their establishment
• Maintaining personal contact with customer is difficult.
4. Supermarkets –

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Supermarkets are self-service stores that sell a wide range of food as well as non-food
products. supermarkets have at least four basic departments such as self-service grocery,
dairy produce, meat, and household department. These stores can be either entirely
operated by owners or they are given on lease to others to operate.

Advantages –

• sells a wide variety of merchandises.

• offers convenient shopping to customers as they can buy everything under one
roof.
• Offer high discounts, and convenience of buying
• Customers don’t have to spend a lot of time.
Disadvantages –

• Fewer customers services.

• Products which require instruction to use are difficult to purchase from
supermarkets as there is no one to assist you.
• High administrative expenses required to run a supermarket.
5. Malls –

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Also called shopping mall, it is a large retail complex containing a variety of stores and
often restaurants and other business establishments housed in a series of connected or
adjacent buildings or in a single large building. 

Advantages –

• They have their own parking facility.

• There is a wide variety of products available.
• There are products from competing producers available under one roof.
• They have facilities such as restrooms.
• They have gaming zones.
• There are food courts with a wide variety of cuisine.
Disadvantages –

• Occupancy cost are higher

• Retailers may not like mall managements control of their operations

• Strict rules governing store displays and signage

• Similar merchandise sold in a close proximity

• Overcrowding

6. Speciality Stores -
Specialty stores are small in size and they generally offer limited products categories but
provides a high level of service. A specialty store is a shop/store that carries a deep

33
assortment of brands, styles, or models within a relatively narrow category of goods.
Furniture stores, florists, sporting goods stores, and bookstores are all specialty stores. 

Advantages –

• Specialization and Expertise

• Focus on a single class of products
• Knowledgeable Staff
Disadvantages –

• Lack of Variety
• Reliance on Market
7. Category killers –
A category killer is a large retail chain superstore that is so competitive that it dominates
its product category. It is a a big-box store, that specializes in and carries a
deep product assortment within a given category and through
selection, pricing and market penetration obtains a massive competitive advantage over
other retailers.

Advantages –

• Specialize in offering a specific product category at different price points. 

• Able to defend their category economics, if they can create a compelling shopping
experience. 
• They offer bigger and deeper selection of merchandise.
• It has a very strong return on capital.
Disadvantages –

• It is difficult to maintain huge inventory and high sales in every category

• They face competition from mass retailers as mass merchants always offered low
prices.
• They have limited options for how to react to online competitors.
8. Discount stores –

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A discount store is a category/type of retail stores where product prices are relatively
lower in comparison to other forms of retail stores. It is a category of retail business
where a retailer sells products at greater discounts. Mostly, discount stores operate on the
same principles as a departmental store. That said, discount stores also sell different types
of products under one roof (all in one shop). However, in comparison to departmental
stores, the prices are lower at discount stores.

Advantages –

• Profitable for businesses as well as the end consumers

• Everything under one roof
• They offer an unparalleled discount on all their products
• Offer you low as well as high-quality products according to the requirement and
budget.
Disadvantages –

• The products are mostly outdated

• Offer products from renowned brands as well as private brands
• They have a collection of so many brands, even for a single product
9. Convenience stores –

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A convenience store, convenience shop, or corner store is a small retail business that
stocks a range of everyday items such as coffee, groceries, snack
foods, confectionery, soft drinks, tobacco products, over-the-counter
drugs, toiletries, newspapers, and magazines.

Advantages –

• It doesn’t cost much to start a convenience store.

• It provides an economic boost to the community.
• They are not bound by local pricing needs.
• Franchises are often available.
Disadvantages –

• Long operational hours are often required.

• Cleaning and maintenance are frequent requirements.
• Convenience stores experience inventory losses.
• These stores sell what people want more than what they need.

4.8 IMPACT OF COVID-19 ON RETAIL INDUSTRY

As the coronavirus continues to spread around the world, there have been significant
impacts to consumer behavior, product demand, and retail store, factory, and logistics
services availability. Growth estimates for global retail in 2020 will be halved from pre-
COVID-19 forecasts, overall, but impacts are uneven. Fashion, furniture, and electronics
retailers will be hit hardest as consumers forego discretionary purchases in favor of
stocking up on food and household supplies. Grocers win, but at a higher cost of
operations, and will be highly motivated to be better prepared for the omni-channel
shopper and responsiveness to demand shifts.

Retail technology investments will continue to reflect digital transformation efforts, as

retailers reserve capital for technology investments by reducing spending on store
openings and remodels. The ability to adapt responsively to product, workforce, partner,

36
and operations needs will separate the winners and losers during the COVID-19 crisis.
Some of the technology areas that will be in high demand are:

 Commerce and self-serve technologies — the future store — online and offline)
 Distributed order management and fulfillment
 Supply chain collaboration and automation
 AI-enabled personalized marketing and content management
 Cloud-based hiring and workforce enablement
 Network infrastructure, edge, and IoT for stores
 Contactless payments
 The effect on mass merchandise stores as compared to lifestyle formats, including malls,
is going to be very different because of consumption as also business dynamics.

While some of the categories would be affected by the inventory pile-up due to the
lockdown, several other categories might end up running into severe supply issues and
therefore stock out situations, as manufacturing is almost at a standstill for various
categories.

Retail is essentially about the fast rotation of working capital, which is inventory. Clearly
the inventory status is going to affect this in a significant manner.

Panic buying has been seen for essential products. However, essential products have
various categories and the consumption of these is not uniform. For example, panic
buying of biscuits would not affect future purchases. Whereas if a person has purchased
extra shampoo, toothpaste or even groceries, they are not going to brush their teeth four
times or cook extra food because of this. Similar is the case with lifestyle products, high
ticket items, etc. Some of them might even see a spurt in sales while many categories
might witness muted sales.

Supermarkets might have a relatively lesser impact because they are largely selling
essential products. However, hypermarkets might face the brunt of this shutdown because
most of them are in malls. Even the standalone ones need to sell food and FMCG
categories. As hypermarkets tend to have much higher inventory levels, that is going to
be a serious issue.

37
In the food segment itself, many products with shorter shelf life like juices are going to
expire and might have to be written off. Returning such stocks to vendors appears
farfetched. Their profitability would also be hit because the higher margin categories like
apparel would not sell in the lockdown and might have lower sales even after the
lockdown. The inventory of various other categories like apparel, etc., in a hypermarket
would have to be liquidated through massive discounts.

These stores would also be hit hard. First is the loss of sale from the seasonal high of
certain categories linked to summer like air-conditioners. Next would be the supply chain
bottlenecks that manufacturers would face because of disruption from Chinese vendors.
Last but not the least is the shopper behaviour of postponing high ticket purchases in a
period of uncertainty and gloom.

One of their biggest challenges is going to be excess stocks. The existing stocks from the
previous season plus the summer lines would put tremendous pressure on these
businesses. Physical stores would have to liquidate stocks of the previous season to create
space for fresh stocks. End-of-season sales and massive discounts might have a very
limited effect because of the current sentiment.

If the next season lines are usually sourced from China, the retailer might have some
relief as orders might not have been placed or the stocks might not have been even sent
by the vendor. The other dimension of inventory from China is the sentiment and concern
about products from China. Any retailer who has inventory of such products might be
affected.

Apparel as a category might escape such a situation to some extent as a lot of products
are being sourced from Tirupur as also countries like Bangladesh and Taiwan.

Discount formats might benefit as they would be able to source inventory at throwaway
prices as their shoppers are drawn by low prices and not the latest fashion or trend.

Online retail is again not a single segment and most of what I have mentioned earlier
about the various categories and segments would apply to the different online retailers. In
addition to this would be the challenge to restart supplies from their various smaller non-
food vendors. Medium and small-scale enterprises are being hit hard by this crisis and

38
lockdown. They form a significant chunk of the vendor base for various non-food
categories. Their business impact would trickle down to the online retailer.

Although the government has appealed to businesses to continue paying their employees,
this cannot be for an indefinite period. In case of any move to contain the manpower cost
by salary cuts or manpower rationalization, the spending sentiment is going to be badly
hit. Even those with no such cuts or employment threat would become very cautious and
tighten their purse strings. All discretionary categories, especially lifestyle products,
would be severely hit because of this.

Next comes shopper’s preference, of online vs offline. Assuming that the buying
sentiment is not negatively affected, there is going to be a surge in buying after this crisis
is over. This would interestingly be more for physical retail stores. After the lockdown
experience shoppers are raring to go out. So, experience would become an important
aspect of shopping and hence the appeal of physical stores would be more than online
purchases, at least for the medium term. Functional purchases or known brand purchases
driven by discounts would continue to be online driven.

There is a word of caution to retailers, especially the lifestyle formats. The shopper with
money and seeking experiential shopping would expect very good service. If retailers
start to cut down on store staff to minimize the cost impact of Covid-19, it would be a
very short-sighted approach.

CHAPTER 5

CUSTOMER REALTIONSHIP MANAGEMENT

39
5.1 INTRODUCTION

Customer Relationship Management (CRM) is a strategy for managing all your

company's relationships and interactions with your customers and potential customers.
It helps you improve your profitability. The full implications of customer relationship
management could mean a dramatic shift in emphasis by the supplier from organization
by function to an organization aligned to specific customers or groups of customers.
Although many companies recognize the value of CRM, not all of them are adapting it.
Customers want recognition, value, quality and respect for their patronage. CRM
recognizes that not a business’s entire customers are of equal value - and that it is
essential to pay the most attention to the most valuable customers. CRM applies to the
company customers who comprise to share of a company’s sales and profits and to also
who might fall into the periphery of company’s future earnings. An odd thing about
Customer Relationship Management is that it is easier to describe in terms of its
objectives than its activities or process. CRM aims to increase the profitability of the
customer portfolio.

Customer profitability comprises many elements, for example:-

• Price

• Size of balances, assets, premiums

• Cross-sales/up-sales

• Costs to serve

• Number and size of transactions

• Expected value of losses

• Longevity / attrition

Although there are many alternative options for influencing customer profitability. And
any of the above factors could be the focus of a separate initiative to increase existing
customer profitability.

40
“CRM is a strategic approach that is concerned with creating improved shareholder
value through the development of appropriate relationships with key customers and
customer segments. CRM unites the potential of relationship marketing strategies and
IT to create profitable, long-term relationships with customers and other key
stakeholders. CRM provides enhanced opportunities to use data and information to both
understand customers and co-create value with them. This requires a cross-functional
integration of processes, people, operations and marketing capabilities that is enabled
through information, technology and applications.”

Customer Relationship Management is a comprehensive strategy and process of

acquiring, retaining, and partnering with selective customers to create superior value for
the company and the customer. It involves the integration of marketing, sales, customer
service, and the supply-chain functions of the retail sector to achieve greater
efficiencies and effectiveness in delivering customer value. A satisfied customer
doubles as a free advertiser for every organization. Nevertheless, customer satisfaction
alone will not suffice to be successful in today’s competitive market. Marketing for
retaining the existing customer is less expensive than marketing for a new one.
Customer satisfaction is positively related with customer loyalty.

CRM is a business approach that integrates People, Processes and Technology to

maximize the relations of an organization with all types of customers. The true value of
CRM is to transform strategy, operational processes and business functions in order to
retain customers and increase customer loyalty and profitability. Customer Relationship
Management (CRM) is a business strategy that aims to understand, anticipate and
manage the needs of an organization's current and potential customers. It is a journey of
strategic, process, organizational and technical change whereby a company seeks to
better manage its own enterprise around customer behaviors. It entails acquiring and
deploying knowledge about one's customers and using this information across the
various touch points to balance revenue and profits with maximum customer
satisfaction.

41
“Customer Relationship Management is an interactive process for achieving the
optimum balance between corporate investments and the satisfaction of customer needs
to generate the maximum profit.”

CRM involves:

• Measuring both inputs across all functions including marketing, sales and service
costs and outputs in terms of customer revenue, profit and value.

• Acquiring and continuously updating knowledge about customer needs, motivation

and behaviour over the lifetime of the relationship.

• Applying customer knowledge to continuously improve performance through a

process of learning from successes and failures.

• Integrating the activities of marketing, sales and service to achieve a common goal.

• The implementation of appropriate systems to support customer knowledge

acquisition, sharing and the measurement of CRM effectiveness.

• Constantly flexing the balance between marketing, sales and service inputs against
changing customer needs to maximize profits.

There are mainly three types of CRM applications – Operational, Analytical and
Collaborative to perform all these activities.

5.2 GOALS AND OBJECTIVES OF CRM IN ORGANISED RETAIL

STORE

Objectives of CRM generally fall into three categories: cost savings, revenue
enhancement, and strategic impact. The key to CRM is identifying the aspects which
creates value for the customer and then deliver it. While individual customers have
different views of value, there are many ways to satisfy the each customer. The
objectives of CRM are-

• Increased sales revenues results from spending more time with customers, which
results from spending less time collecting information about the customer.

42
• Win rates improve since the company withdraws from unlikely or bad deals earlier in
the sales process.

• Increased margins results from knowing your customers better, providing a value-sell,
and discounting price-less.

• Improved customer satisfaction rates. The increase occurs because customers will find
that the offer is more in line with their specific needs.

• Decreased sales and marketing administrative costs. This decrease occurs since the
company has specified and has good knowledge about its target segment customers.

• Identifying those customer values that are pertinent to a particular segment.

• Understanding the relative importance of those values to each customer segment.

• Determining if delivery of those values will affect in a positive manner.

• Communicating and delivering the appropriate values to each customer in way the
customer wants to receive the information.

• Measuring results and proving return on investments.

The CRM objective is to increase business opportunities by:

 Improving the process of communication with the right customers.

 Providing the right offer for each customer.
 Providing the right offer through the right channel for each customer.
 Providing the right offer at the right time for each customer.
By doing this company can receive the following benefits:

 Customer retention. Ability to retain loyal and profitable customers and

channels to growth the business profitability.
 Customer acquisition. Acquiring the right customers based on known or learned
characteristics, which drives growth and increased margins.
 Customer profitability. Increasing individual customer margins while offering
the right product at the right time.

43
5.3 CRM IN RETAIL INDUSTRY

The Retail Industry revolves around the Customer more than any other Industry. It
becomes imperative to not just interact with the Customer in a better way, but also to
'know' the Customer. Such knowledge helps in boosting Profits, Market share and
Customer loyalty. Customer Relationship Management is a new business “buzz word”
expanding its magnitude every year. The business world is changing with widespread
deregulation, diversification, and globalization and have stimulated a dramatic rise in
competition between companies. Over that the customers are changing - natural
customer loyalty is a thing of the past.

A new breed of customers has emerged where more customers understand the
marketplace, the more they want to be recognized and understood as individuals, and
they will give their business to the companies that do the best job of understanding and
responding to their needs. In response to these changes, competitive retailers are
abandoning ineffective business philosophies of the past and adopting new and
innovative ways to maintain customer loyalty and profitability.

Rather than focus on internal considerations like reducing costs and streamlining
operational systems, retailers are seeking to maximize profitability by focusing on the
many facets of the customer relationship. Guided by the concept of CRM, an economic
view of customers that measures how profitable a customer is to a retailer rather than
measuring the profitability of product lines, companies are adopting a customer-centric
strategy, stressing the importance of optimizing the value of each customer relationship.
A major shift is experienced from product-driven strategies to customer-driven
strategies and customer retention is becoming more and more important and as the
primary focus. Reacting to increasing acquisition costs and acknowledging the value of
analyzing customer profitability, many enlightened organized retailers have realized
that the key to success is this; know everything one knows about the customer.

44
5.4 NEED FOR IMPLEMENTING CRM IN ORGANISED RETAIL
STORES

Top reasons for implementing CRM include “to increase customer retention and
loyalty”; “to respond effectively to competitive pressures”; and “to differentiate
competitively based on customer service”. Today, customers are more knowledgeable,
demanding, sophisticated, discriminating and with volatile loyalties .Retaining the
customers is about solving the customers’ problems before they call the competition.
Customers are valuable assets. It costs five to ten times as much to gain a new customer
as it does to keep an existing one.

Customer Relationship Management (CRM) is a process by which a company

maximizes customer information in an effort to increase loyalty and retain customers’
business over their lifetimes. The primary goals of CRM are to

 Build long term and profitable relationships with chosen customers

 Get closer to those customers at every point of contact.
 Maximize your company’s share of the customer’s wallet
CRM combines a progressive approach to gathering customer data with advanced
database and decision support technologies that help transform that data into business
knowledge which is of much importance to the retailers. By maximizing the use of
customer information, retailers can better monitor and understand customer behaviour.
In response to newly gained customer intelligence, retailers have retooled their front-
and back-office systems to ensure that they are providing what the customer really
desires. CRM calls for increasing customer share-that is, retaining customers and
selling them an expanded set of products that has been tailored to their wants. This
requires a lot of data from every customer. In addition to the application of state-of-the-
art data management and analysis techniques, CRM implementation often involves a
significant change in a company’s business strategy; changes that require not only
retooling back-office processes, but in many cases, reorganization of the business
functions closer to the customer.

45
Operational processes designed to support a product-driven strategy become ineffective
when the company’s marketing focus shifts to a customer-centric strategy. Effective
and flexible front-office processes are vital in any CRM implementation.

5.5 BENEFITS OF CRM

Implementing a customer relationship management (CRM) solution might involve

considerable time and expense. However, there are many potential benefits. A major
benefit can be the development of better relations with your existing customers, which
can lead to:

• Increased sales through better timing due to anticipating and forecasting demand
needs based on historic trends and current observations.

• Identifying needs and wants more effectively by understanding specific customer

requirements.

• Cross-selling of other products by highlighting and suggesting alternatives or

enhancements.

• Identifying which of your customers are profitable and which are not

• Effective targeted marketing communications aimed specifically at customer needs.

• A more personal approach and the development of new or improved products and
services in order to win more business in the future.

Ultimately this could lead to:

• Enhanced customer satisfaction and retention, ensuring that the good reputation of the
company in the marketplace continues to grow.

• Increased value from your existing customers and reduced cost associated with
supporting and servicing them, increasing your overall efficiency and reducing total
cost of sales.

• Improved profitability by focusing on the most profitable customers and dealing with
the unprofitable in more cost effective ways.

46
Once the retailer starts to look after its existing customers effectively, efforts can be
concentrated on finding new customers and expanding the market. The more one know
about the customers, the easier it is to identity new prospects and increase the customer
base.

The major benefits of CRM are-

i. Improved customer loyalty

ii. Gain competitive advantage
iii. Increase sales revenue
iv. Increase in profitability
v. Improve internal productivity
vi. Enhance executive decision making
vii. Decrease costs and expenses
The customers are so volatile that even with years of accumulated knowledge, there's
always room for improvement. Customer needs change over time, and technology can
make it easier to find out more about customers and ensure that everyone in an
organization can exploit this information.

5.6 THE CRM PROCESS CYCLE

47
CRM as an ongoing learning process where the information regarding an individual
customer is transformed into a customer relation. The process starts with collecting
knowledge about the customer and ends with an interaction with the customer. This
interaction enables the establishment of long-term profitable relationships. To get
knowledge about the individual customer the company must have a well develop
info-structure, this means that they must have an infrastructure for handling
information. To become a CRM company is just not only about customer
knowledge it is also about the ability to gather, analyze and to respond on the
individual customers needs. The CRM process cycle consists of the following
elements: Knowledge discovery, Customer interaction, Market planning and
Analysis and refinement.
A. Knowledge discovery- The first stage of the cycle is the process of analyzing
customer specification and investment strategies. The analysis is done through a
process of customer identification, customer segmentation, and customer
prediction. The detailed customer information of historical information and
customer characteristics gives marketing personnel a better base for decision-
making. In this stage the company’s focus should be on pre-understanding the
individual customers buying behavior. A well-developed and functional data
warehouse is a condition that must be fulfilled in this stage. The data warehouse
is defined as a logical collection of information gathered from all over the
organization that supports business analysis activities and decision-making tasks.
Moreover the data warehouse offers the company the opportunity to combine the
massive amounts of information with campaign management to improve the
company’s response rate towards the market. Finally, it enables the company to
facilitate customizing offers, reduce costs by developing targeted campaigns
when the company can present the right message, at the right time for the right
customer.
B. Customer Interaction- This is the phase of executing and managing customer
communication with relevant information at the right time and offerings using a
variety of interaction channels. The interaction channels used is the ones already
decided in earlier phases. Since it is extremely important to know which channels

48
 the customer prefers to interact via and also the types of technologies they prefer
to utilize. An inventory of all customer interactions and possible interaction
channels is necessary to do. This is important since it is through customer
interaction channels the company has the opportunity to deliver marketing
messages and sales opportunities and to handle service issues.
C. Market planning. This process defines among other things specific customer
offers, and distribution channels. The phase involves four different activities
namely market planning, offer planning, marketing planning and communication
planning. The process enables investments in customer interactions, localization
alternatives, treatment plans and products and services. Furthermore this stage
enables the development of strategic communication plans or programs.
D. Analysis and refinement. This phase consists of a process aiming to capture and
analyzing data from the customer dialogue that the company has received from
the interaction channels. This is a continuing learning process focusing on
refining communication, prices volumes, and approaches etc to excel the
business opportunities in the interaction with customers. A vital task is to
understanding customer specific responses to the company’s customer
(marketing or sales) stimulus.

Knowledge
Analysis
Customer
Market discovery
Interaction
Planning

49
5.7 ARCHITECTURE OF CRM IN ORGANIZED RETAIL SECTOR

Customer Relationship Management (CRM) has been a hot topic in industry for a
relatively short period of time. It formalizes best practice into a strategy that enables a
firm to identify its customers and target them in a way which will make them more
profitable and loyal. It is said that “the best examples of CRM still remain the one-to-
one services provided by shopkeepers who know their customers personally”. The topic
has thus been around for centuries, yet it is only in recent years that computing
technology has been developed which can go some way to replicating this kind of
customer management.

The power of computers allows large firms to apply these techniques on their many
customers. CRM is the infrastructure that enables the increase in customer value, and
the correct means by which to motivate valuable customers to remain loyal -indeed to
buy again. CRM can be broken down into three specific types; collaborative,analytical
and operational.

The distinction is that operational CRM occurs at customer touch points (i.e. where the
customer and firm interact) and is thus concerned with collecting data and practicing
strategies. Analytical CRM occurs in the back office and is concerned with processing
data and forming strategy. Operational CRM produces customer data which can be
analyzed in the back office. Using the findings from the data gathered, a new strategy
can be developed and operated on the customers, which in turn produces another set of
data. This cycle is continuous with each type of CRM hopefully building on a better
output over previous.

The goal of CRM is to provide a one to one personalized service to each customer - pre
and post-sale. If a firm can identify its customers, it can collect gain data of them
individually. Using the individual data it can compare them with one another. These
comparisons give an insight into each customer. As a result, the firm becomes more
aware of customer needs and can change their marketing strategy as and when essential
moving away from mass marketing towards database marketing. It is apparent that it
would be easier to implement a CRM strategy in an industry where the firms already

50
have much information on their customers such as banks and insurance companies.
These have information about their customers, their family and spending habits.

Considering the online mail-order retailers such as Amazon.com which require

customers to register before they buy. The company can then track the purchases and
browsing habits of every customer and tailor their service accordingly. It is however
much harder for the traditional bricks-and-mortar retailers to achieve the key ingredient
of CRM - customer data. Customers can visit the shops virtually, purchase the goods
and leave. CRM by its very nature is not a oneway street.

For a company to make a return on investment (ROI) on a CRM strategy, more

customers must stay loyal, which means customer satisfaction must increase. The most
important factors that drives retail customer satisfaction were the in-store experience
and their interactions with the staff. Interestingly marketing and communications and
data integration and analytics (using information from a customer’s past purchases to
provide a better service) were not so important to customers, yet these properties are
often touted as the major strengths of e-CRM. CRM can do little unless the store has its
retail basics in order. They also believe that marketing and communication and data
integration and analytics should not be the sole goals of CRM, but should support the
customer’s experience, since this is a more important factor to the customer.

Pyramid framework of a customer centric CRM strategy

Cus
tom
er
Sati
sfac
Customer
tion
experience
Marketing and
communication
Data integration and analysis

CRM Strategy

51
As being represented in the pyramid there is no scope for further improvement after
adapting the model represented by the pyramid and reaching the pinnacle sounds
impractical to achieve and maintain. This is especially applicable to the organized retail
sector, where the costs for a customer changing the store they shop at are minimal and
the competition between stores fierce.

5.8 THE IDIC - MODEL

Identify customers

Information such as name, address and purchase information must be collected across
the company, at all points of contact. The more information gathered on each customer,
the more can be understood about customer’s habits and preferences. In the retail sector
environment, purchase information is extremely valuable due to the wide range of
products available leading to customer diversification. In recent years many retail
sectors have introduced loyalty schemes, offering promotions and money off shopping.
To obtain ‘points’, customers must produce their card at every transaction point. The
advent of internet shopping has enabled retail sectors to identify customers at the point
of registration and track their purchases and browsing habits whilst on the website.

Differentiate customers

Peppers & Rogers justify this stage by saying “that customers represent different levels
of value to a company and that they have varied needs". A good organized retail sector
example of this is of Titan, Pantaloons, Globus where the level of membership is
dependent on the purchase amount. Differentiation should be relatively easy for the
retail sector to achieve once the data has been collected, since there is full information
on how much each registered customer spent and what they spent it on. With the
information gained on the total spend of each customer; it is possible to work out their
value to the company. The products a customer purchases can put them into categories
such as ‘Silver’, ‘Diamond’ and ‘Platinum’. These socioeconomic categories are clearly
independent of one another, so customers can be members of different combinations

52
allowing high degree of differentiation. This is extended further when combined with
the customer’s value to the company.

Interact with customers

This is the stage where the benefits of CRM could be tracked in by retailers’ in. having
categorized the customers; the retail sector is in a position to treat them differently.
Valuable customers for example can be given more benefits, such as better offers to
encourage them to stay faithful, since their loyalty is more important to the company.

Customize content

Once the interactions and reactions of each customer have been analyzed, a full
customized one-to-one service can be offered to customers based on their value to the
company, personality and background. Offers can be tailored according to the socio
economic classification. The biggest challenge the retail sector is facing is how they
actually obtain the data in order to identify the Customers. Once it can do this, the
volume of data available is vast, which gives the remaining three stages a much higher
chance of success.

5.9 VARIOUS TECHNIQUES OF CRM

a. Automated Communication
b. Operational CRM
c. Cross-team collaboration
d. Data Analysis
e. Performance tracking
f. Scheduling
g. Customer loyalty programs
5.10 IMPLEMENTING CRM TECHNOLOGY IN THE ORGANIZED
RETAIL SECTOR

The processes which the retail sector must go through in order to gain customer data
and provide a one to one service should be to support the customer experience; however

53
the physical outputs of a CRM initiative are data integration and analytics which can
support marketing and communication with the customer.

Technology Design Landscape for value proposition chain

This model shows how the earlier strategies formulated (IDIC and the CRM value
cycle) fit in with the technology. The first stage of the process is about identifying the
customer. This is done by the transaction engine (at the point of sale) and is in the
operational CRM level since it is a point of interaction with the customer. A detail of
each transaction is passed onto the customer data store. Once there is enough data at
this level the retail sector is able to analyze it and differentiate the customers. Since the
processing of the data at this stage, organizations have entered the analytical CRM
phase of the value cycle. At this level there is also an amount of content which can be
customized once interactions have occurred between the retail sector and customer.

The personalization engine matches the right content with the right customer. Once this
has taken place, the content must be broadcasted to the customer. The broadcast engine
does this by converting the content into the format preferred by the customer (e.g. e-
mail or post) and directing it to them. The broadcast engine need not be a piece of
technology; it is merely implementing the new strategy suggested by the analytical
CRM. Interactions between customer and retail sector occur once the customer has been

54
identified and differentiated. This illustrates the notion that CRM is best used as a tool
supporting customer experience.

CRM is potentially a useful concept in the marketing and customer service areas of a
retail sector. The information and data attainable from a retail sector’s customers is so
deep and detailed, that the potential of CRM in this sector is enormous. However before
CRM can even be considered, the retail sector must ensure it has its retail basics in
order. The key stage for a retail sector to implement, as with any bricks-and-mortar
retail business, is a method by which it can identify the customer at any touchpoint. If it
can achieve this, it will get accurate and profitable results. Research has suggested that
the motivation of a CRM initiative should be to enhance the customer experience. It is
more difficult for retail sectors to realize a time when customers are ‘locked in’. At the
spirit of a perfect CRM strategy is the design of mutual value for all the parties
involved in the business succession. It is about creating a sustainable competitive
advantage by being the best at perceptive, communicating, and delivering and
developing existing customer relationships in addition to creating and keeping new
customers.

There crop up the concept of customer life cycle focusing on the development of
products and services that anticipate the future need of the existing customers and
creating additional services that extend existing customer relationships beyond
transactions. The customer life cycle paradigm looks at lengthening the life span of the
customer with the organization rather than the endurance of a particular product or
brand. A good customer relationship management program addresses to the changing
need of the customers by developing products and services that continuously seek to
satisfy the lifestyle and need patterns of individual customers.

Organizations tend to acquire a structure around customer segments and not on the
basis of product lines to deliver customer satisfaction. Business owners need to move
away from simply looking at customer relationship management solutions to customer
retention strategies that grow the business. Customer retention strategies include all
front office interactions with potential and existing customers, including sales and
marketing as well as customer care and help desk support.

55
Rather than customer relationship management which focuses on managing customer
data, a dynamic customer retention strategy allows a business to grow its revenue
among existing customers. The role of a salesperson has changed to more of a value
creator than a persuader or problem solver. Attempts are made through specific
investments to build competitive advantages. Headed by CRM strategy there is the
development of a sales team headed by relationship managers to interface with the buy
center. The sales team is more customer-centered than product centered. Relationship
Managers are to have knowledge, skills and abilities to perform their jobs. Much of
their knowledge comes from on-job learning.

Some of the skills used by relationship managers include creative problem solving,
innovativeness, cross-functional interaction, conflict management, build trust, planning
and project management and leading teams. Relationship managers are in a way akin to
brand managers. Relationship managers in assessing performance give importance to
relationship quality. Some of the constructs used for relationship quality include trust,
commitment, satisfaction, ethical conduct, customer orientation, minimal opportunism,
willingness to invest, expectations of continuity, share of customer and growth in
customer value.

No wonder, CRM is expected to unlock the doors of customer satisfaction. By linking

the back office and the front office, CRM has the ability to make the organization
function like one entity and not like many departments. With CRM, the customer no
longer has to run from pillar to post to resolve his grievances. There are good examples
of how CRM can be used to boost brand loyalty. For example, L’Oreal, the world’s
largest beauty, skin care and Cosmetics Company wanted to broaden the scope of its
luxury products marketing to focus on customers.

The firm operates in a highly-competitive marketplace for luxury beauty products

where customer retention is a key performance indicator. It standardized on Siebel
CRM and Analytics software which resulted in greater customer loyalty. As well as
improving customer brand loyalty, L’Oreal benefited from an improved response rate
and lower cost of direct mail, and gained a consistent 360-degree view of its customers
across multiple channels. Most importantly, it can now classify ‘value customers’ more

56
easily and retain them, boosting brand loyalty. In retail industry there is some form of
direct contact between the customers and the firm. This contact or interaction hold an
importance that’s why is called ‘the moment of truth’.

The return on relationship model suggested that good relationship leads to good quality
and good customer satisfaction . Good quality is the outcome of internal and employees
integrated efforts. With this a good customer satisfaction arises due better and better
services provided by the retailers which in turns improves profitability.

Return on Relationship Model

Good Good
Satisfied Employee Customer Customer High
Internal external
employees Retention satisfaction retention profitability
quality quality

CRM works towards improving profitability based on exploiting the relationships,

which serves to organizational profitability. CRM is profitable when customers love to
stay attached for a longer duration of time, and here CRM fosters retailers to cater the
mega marketing needs of the customers.

5.11 KEY CRM TRENDS IN 2021

a. Customer experience
b. Artificial Intelligence
c. Mobility
d. Integration
e. Reliance on data
f. The digital age
g. Channel-less CRM
h. Usability

57
58
 CHAPTER 6

ANALYSIS AND INTERPRETATION

a. Demographics of the respondents:

Age, education and other demographic factors are likely to positively or negatively
influence the perception of customers on the use of customer related technology,
services and other innovative initiatives by the store to make shopping a pleasure. The
respondents were categorized into several factors, such as gender, age, income, etc. The
various demographic variables considered in this study are as follows

AGE GROUPS GENDER MONTHLY

INCOME
15-25 Male Less than 10000
26-35 Female 10001-25000
36-45 25001-35000
46-60 35001-50000
60 and above Above 50000

b. Measures:
The instruments and scales used in the study are a combination of categorical and
ordinal variables.

AGE

15-25
4% 26-35
36-45
31% 46-60
45%
60 and above

20%

59
 GENDER

21% Male
Female

79%

MONTHLY INCOME

4%1%
Less than 10000
20% 10001-25000
25001-35000
41%
35001-50000
Above 50000

34%

The study shows that most of the respondents belong to the population between 15-45
years of age group who mostly shop their household items through the organized retail
stores.79% of the respondents are female.This can be seen as that there are more
females who shop for the household items through organized retail stores. Majority of
the respondents [41%] are from lower and middle income level segment.

The data was collected from 100 respondents. Various demographics such as age,
gender, monthly income were considered.

Respondents were asked about their mode of purchases from the organized retail stores
and it was found that majority of the respondents said that they personally visit the

60
stores for making online purchases and make large amount of purchases. If they want
fewer items then they go for online mode of purchases to save time.

MODE OF SHOPPING

Online
21%
Visit the store personally

79%

As the new trend of organized retail stores is rising, they are focusing more on the
needs, demands and preferences of the customers. Also, as the competition is rising
these stores try to give customers a better shopping experience.42.4% of the
respondents responded that most of the times organized retail stores give importance to
their needs and preferences and 21.2% state that always they have seen the organized
sector giving importance to their needs and preferences.45.5% have responded that
most of the CRM is given importance in the organized retail stores visited by them
whereas 36.4% have responded that sometimes CRM is given importance in the
organized retail stores visited by them. It shows that there is still a scope for more CRM
Initiatives to be taken by companies.

When respondents were asked to rate their experience with the organized retail stores
considering the CRM activities performed by their stores , 45.5% said that they were
very satisfied ,39.4% said that they were moderately satisfied.51.6% respondents said
that they will often recommend others to purchase from organized retail stores than
unorganized retail stores.22.9% respondents said that they will always recommend
others to purchase from organized retail stores than unorganized retail stores.

As for the responses whether retailers provide customer feedback , it is found that 18%
customers strongly agree & 53% agree, 13% neither agree or disagree.

61
c. Primary factor analysis:
By identifying the relationship of CRM activities and its impact on customers for
making purchases from organized retail stores, the Primary Factor Analysis is as
follows:-

Primary factors Frequency Percentage

Friendly, helpful and knowledgeable staff 2 2%
Convenient location of the stores 1 1%
Opening hours of the shop/timely delivery 17 17%
Easily find the merchandise that is needed 18 18%
Fair product prices  22 22%
Fair returns and after sales policy 4 4%
Appealing store decor and lighting 6 6%
Well stocked store 8 8%
Proper grievance handling facilities 1 1%
Discounts and rewards to loyal customers 21 21%
Total 100

Percentage Friendly, helpful and knowl-

edgeable staff

Convenient location of the stores

Opening hours of the shop/timely

delivery
2%
1%
21% 17% Easily find the merchandise that is
needed
1% Fair product prices 
8%
18% Fair returns and after sales policy
6%
4% Appealing store decor and lighting
22% Well stocked store

Proper grievance handling facilities

Discounts and rewards to loyal cus-

tomers

62
d. CHI-SQUARE ANALYSIS:
Ho : There is no positive impact of Customer Relationship Management in increasing
the sales volume.

H1 : There is a positive impact of Customer Relationship Management in increasing the

sales volume.

On the basis of equal probability i.e. 1 / 10, the theoretical frequencies for each factor
will be 100 / 10 = 10. Therefore the expected frequency is 10.

CHI-SQUARE TABLE

FACTORS OBSERVED EXPECTED O-E [O-E]2

FREQUENCIES FREQUENCIES
[O] [E]
Friendly, helpful and 2 10 -8 64
knowledgeable staff
Convenient location of the 1 10 -9 81
stores
Opening hours of the 17 10 7 49
shop/timely delivery
Easily find the merchandise 18 10 8 64
that is needed
Fair product prices  22 10 12 144
Fair returns and after sales 4 10 -6 36
policy
Appealing store decor and 6 10 -4 16
lighting
Well stocked store 8 10 -2 4
Proper grievance handling 1 10 -9 81
facilities
Discounts and rewards to 21 10 11 121

63
 loyal customers
Total 100 660

= 660 ÷ 10

= 66

For 5 degrees of freedom, from the tables,

χ 2 = 16.91

Since, the calculated value is greater than the table value, the null hypothesis is rejected
and the alternate hypothesis is accepted. Thus, there is a positive impact of Customer
Relationship Management in increasing the sales volume.

Chart Title
25

20

15

10

0
aff es ry d s  y g re es er
s
st or ive e de i ce lic tin to l iti
le st de
l e r po g h s i om
ab e
is
n tp s li ed fa
c st
g e f th e ly t duc a le
a nd ck ng l cu
o a o s to i
le
d n tim th pr r or ls dl ya
w tio p/ i se ir a fte ec el h an o
lo
o a o a d t
kn oc sh nd F nd re W ce ds
nd n tl t h e cha sa   s to van ar
a e r n w
fu
l ni of m
e tu
r
in
g rie re
e lp nve u rs h e r re e al e rg n d
h Co ho t i p op sa
ly, g nd Fa Ap Pr nt
nd i n y fi o u
ie en si l sc
Fr Op Ea Di

OBSERVED FREQUENCIES[O] EXPECTED FREQUENCIES[E]

64
 CHAPTER 7

FINDINGS OF THE STUDY

To conclude, findings of the study illustrate that there is a positive impact of Customer
Relationship Management in increasing the sales volume. Employee gender, age, etc
also has an influence on the impact of Customer Relationship Management. The
research findings suggest that CRM also plays a vital part in making customers feel
valuable.

Customer Relationship Management is an important aspect of retail outlets to know

about customer interest, need and buying habits, like, dislike and refocus its strategy to
serve him better.

Organizations face considerable challenges in implementing large-scale integrated

systems like CRM, to satisfy the customers and to create loyalty. Retailers should
develop relationship improving services such as, inform customers about promotions,
discounts and other facilities of the organizations, encourage customers to purchase
more by showing appreciation, to convince customers that their feedback are taken
seriously, The management of the retail store should provide special training on
communicative skill to the sales staff of the organization to maintain good rapport with
customers. CRM is the most efficient approach in maintaining and creating
relationships with customers. CRM is not only pure business but also ideate strong
personal bonding within people. Development of this type of bonding drives the
organisations to new levels of success. Once this personal linkage is built, it is very
easy for organization to identify the actual needs of customers and to serve them in a
better way. It is a belief that the more sophisticated strategies involved in implementing
CRM, the more fruitful is the business. Retailers must consider seriously in investing
on tools for implementing CRM systems in their workplace.

All the respondents have given their responses considering their experience regarding
purchases from an organized retail stores. Earlier the businesses used to focus on

65
building more new customers to increase their sales but now-a-days businesses focus
more on satisfying their existing customers through various CRM initiatives to increase
their sales. Earlier the approach was business centric and it has shifted to a customer-
centric approach.

Customers responded that if they are satisfied with the CRM initiatives of the organized
retail stores visited by them then they also recommend to their friends and family for
purchases from those organized retail stores. This helps to increase the sales of those
organized retail stores. The study also realized that retaining “all” customers might not
be the most favorable for companies. CRM systems can assist sales and marketing to
identify advantageous customers faster and more reliable than other resources.
Organized Retail Stores requires CRM functionality to support their Marketing, Sales
and Service Process. The CRM functionality includes Marketing Automation, Sales
Force Automation, and Customer Service & Support. Since the information exchange
between the Sales, Order, Production and Service Function needs to be exchanged very
recurrently and accurately, the CRM system plays a decisive role in sizeable outcome
on the sales volume stressing the magnitude of integrating the CRM system.

Organizations, practicing CRM, have gained over there sales volume from those
organizations not practicing CRM, as it has increased the ratio of the satisfied
customers and the referred customers thus to the end increasing the loyalty ratio and the
profit. “Customer retention” requires strategy and it should be considered as a
mainstream activity which requires same level of attention that other marketing and
sales strategies may require. Organized Retail Stores must look into the Ambiance or
Atmosphere of the store as it’s one of the factors for satisfaction of the customer. It is
also important in creating a brand positioning for the outlet. A customer friendly layout
gives an impetus to the shopper to spend more time in the store hence increasing the
chances of shoppers buying more merchandise.

66
 CHAPTER 8

CONCLUSION AND SUGGESTIONS

8.1 CONCLUSION
It could be concluded that the customers give a preference to Value Oriented
Relationships, and here arise the role of the sales person to act elegantly and ethically to
bind the customers for long. CRM also plays a vital part in making customers feel
valuable, Home Delivery Systems for the loyal customers could be a solution to impart
value to their purchase. One of the main factor that is considered while making
shopping from organized retail stores is the fair product pricing , discounts and rewards
to loyal customers and easy availability of the merchandise. Also a part of CRM that
increases sales in the organized retail stores is the timely delivery services that
influences their sales. There next comes the Competitive similarity, which could be
tamed by the Visual Merchandising strategies, a well stocked store and the ambiance of
the Retail Store, and greeting every customer differently according to their taste,
preferences and choices gives them a satisfaction and draws a margin of sales.
Thereafter the Variety Seeking Behavior of the customer could further be dissolved by
the diversified product portfolios, e - brochures, edesigning, make and pick concepts
(e.g. apparels, jewelry etc). The next is the Reward Strategy, which could be catered by
the Membership cards and the discounts associated with each category of membership,
the discounts and the prizes schemes, the reward for being loyal etc, to gain the interest
of the customers.

The goal that CRM will allow an entire organized retail to identify, acquire, foster and
retain loyal, profitable customers. To accomplish this, organizations will usually require
changes in the existing technology systems (and possibly the infrastructure), processes
and culture (including perhaps compensation initiatives), and, undoubtedly, leadership
priorities. In the near future, the most dramatic changes in technology and operations
will be seen by people who are using CRM systems to service and sell to customers and
prospects as part of their regular jobs. Today, knowledgeable workers are already using

67
personalized CRM portals for quick access to information resources and customized
applications that easily present data. Front-line workers have access to a variety of
CRM tools to assist them in making real-time decisions based on the automated, yet
specific, recommendations generated by the collective information within the system.

It could be accomplished that customer satisfaction and loyalty generates from the
Brand, product, Company, Price, Place and Variety which further generates Customer
Retention. Through CRM Organized Retail Stores can offer their customers a better
product or service fetching additional exchanges. Thus the CRM’s objective to retain
profitable Customer stands positive hereby converting the loyal customers into loyal
advocates.

Retailers must focus on keeping customers record and information properly maintained
with help of feedback forms, Entry forms, transaction history and purchasing record
accurately maintained. Retailers can build good relationship with customers by
providing coupons, membership cards, festival offers, after service and maintained
customer loyalty with help of Guarantee & response cards, accepting credit /debit cards,
accepting mail orders, loyalty programs.

8.2 SUGGESTIONS

 Organized Retail Stores must understand the importance of CRM in their operations
and view it as a vital tool towards success. It should be understood that CRM
involves the whole organization and the business not just a sales and marketing
activity. Increasing competition is tempting customers to move from one firm to
another in search of better services and more explicitly, finding a complete solution
to their problems. It thus becomes enormously important for organizations to have
an integrated CRM strategy across the establishment in each case of generating
higher customer satisfaction and exchanges.
 Findings suggests that there is an intense need for the customization of production
and the logistics function in relation to the marketing processes for customer centric
handling of customer interactions
 Organized Retail Stores are required to find cost effective alternatives for non

68
 buyers or low-margin customers as not all customer relationships are profitable.
Retailers must control the costs and save the best resources for premium accounts
while working to bring low performers into an acceptable profit portfolio.
 To achieve the enormous benefits of CRM the organized retailers must train and
motivate their sales force executives for obtaining higher exchange and timely
updations for the sessions should be made for acquaintance with the latest
technology.
 It could be recommended that a high quality of speedy interactions should be made
regardless of the channel, with 24/7 facility, for immediate and useful responses to
inquires.
 Organized Retail Stores ought to pay attention on Leveraging analysis as a means to
improve cross-sell and up sell and basket building effectiveness in emerging as a
substantial competitive advantage.
 In light of the findings it could be suggested that there is a requirement of a
comprehensive strategy for the revenue and cost measures to help generate the
analysis of payout and the incremental net program revenue per customer.
 Organized Retail Stores could further carry on an analysis to explore the impact of
Customer Life cycle value model on the Cost and Sales Volumes ratios.
 A more focused study could be undertaken for analyzing the effectiveness of
Integrated CRM in organized retail stores, across nations. As with the increasing
Globalization the urgency of this could be sensed.

69
 CHAPTER 9

CASE STUDIES

What CRM activities are used by organized retail stores to increase their sales volume-

1. D-MART – The Indian Retail Chain

Avenue Super Marts Ltd. (ASL) is a chain that owns and operates supermarkets and
hypermarkets by the store name of D-Mart. D-Mart seeks to provide a one stop
experience to its customers and their entire family, to meet all their daily household
needs. A wide range of home utility products is offered, including beauty products,
foods, toiletries, kitchenware, linens, home appliances and much more. It has created an
image in the mind of its customers as a place where one can find all types of products at
much cheaper prices than anywhere else.

The first thing that they did that was totally different than its competitors was that it
offered products at much cheaper prices. This implies that the company focuses more
on the volume of sales than that of the margin of profit it acquires. D-Mart has not only
outpaced its competitors it has also managed to figure out how a retail chain needs to be
operated in a consumer driven market like India. e even though it is not as big or old as
its competitors it has still managed to overtake them in the market. It was one of the
first retail stores to gain profits. They were able to do that by using excellent strategies

70
which may be costly at first but help them make surplus profits later all the while
increasing their value in the eyes of the consumer.

Providing the best customer service is the way a retail store can successfully gain more
popularity and customer loyalty. More and more businesses these days focus more on
the retention of existing customers than on getting new customers. Some benefits of
value retailing are as follows-

 Provides Word-Of-Mouth Marketing- Satisfied customers are a source for

getting new customers. As per some studies a majority of the customers are
given a recommendation by their acquaintances to go to a particular store. If the
cards are played right a single customer can influence around 10 others into
becoming a customer.
 Understanding Customer Experience- Customers need to feel wanted. A
business has to demonstrate to them that they are valued. A way to make them
feel wanted is by showing them that you respect their valuable time.
 Reducing Wait Time- The first step in securing loyalty in customers is getting
rid of lengthy queues. A good queue management system also facilitates
impulse buying and also shows that you have a certain level of care for your
customers.
 Rewards- Offering a reward is a good way to motivate your customers to buy
more. Reward points, scratch cards, gift vouchers etc. are a few examples.
Rewarding customers ensures their loyalty and encourages them to visit your
store more often.
Creating customer connect through value retailing helps retailers in building long
and rewarding relations with the customers. Rewards and recognition shows that
you value your customers. Also, convenience makes it shopping at your store easier
than that at your competitors. What D-Mart did first differently from its competitors
was that it offered goods at much cheaper prices. They do this by buying goods in
bulk. The techniques and strategies that D-Mart has applied in its business model
are very synergetic and together allow it to stay ahead of its competitors in the

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 market. If the management techniques used synergize with one another they can
truly do wonders for a company.

One of the strengths that makes D-Mart different from its competitors is its relation
with its customers. It holds a special place in their hearts as it fulfills all their needs
in one trip smoothly without hassle. D-Mart has truly understood the essence of
CRM and what power it holds.

2. BIG BAZAAR

Customer relationship activities have the most impact on customer retention. Every
customer service encounter has the potential to gain repeat business or have the
opposite effect. The expectation of personalized, relevant offers and service is
becoming a primary driver of customer satisfaction and retention in financial service.

 "CRM is the business strategy that aims to understand, anticipate, manage and
personalize the needs of an organization's current and potential customers" PWC
Consulting.

 CRM is a business strategy, one that puts the customer at the heart of the business.

 Good business people have always understood the relationship between happy
customers that come back again and again and creating long term, sustainable
profitability. Big Bazaar has realized this and applied this to effect.

One just needs to think of the local shop owner who knew everyone of his customer’s
names, birthdays and particular ailments to prove that point. What is new is that there
now exists the technology to enable this customer-centricity on a much larger scale.

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(“Come To Big Bazaar- Isse Sasta Aur Achha Kahin Nahin”) It is said that a successful
CRM implementation will allow your Customer Service, Sales and Marketing people
(and anyone else in your organization) to have a holistic view of each of the customers.
In theory this will enable them to make quick, informed decisions, create cross selling
and up selling opportunities, measure marketing effectiveness and deliver personalized
Customer Care.

Using CRM, at the management of Big Bazaar can:

 Provide better customer service

 Increase customer revenues

 Discover new customers

 Cross sell/Up Sell products more effectively

 Help sales staff close deals faster

 Make call centers more efficient

 Challenges For Big Bazaar in CRM implementation:

 Difficulty in acquiring new customers.

 Inaccurate and Slow Quoting Organizations may be unable to accurately estimate and
quickly deliver successful proposals, often leading to missed opportunities, bad profit
margins and upset prospects.

 Lack of Product Knowledge Within the Sales Force.

 Problems can arise when products were sold that didn’t fit company's profitability
strategy such as selling a customer one product when another would be better for the
customer and more profitable for you.

 Difficulty and Delay in Updating Pricing and Product Information.

 When the sales force relies on incomplete product, pricing and customer information,
then they're probably not selling the most profitable products you offer.

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 Customers prefer a combination of differing channels in which to deal with your
company. Self-service on the web can even be done for complex products. Plus, self-
service on the web offers retail banks the opportunity to shift cost out to the customer.

 CRM Strategies adopted by Big Bazar-

 Customer Satisfaction their Top Priority:
Don't just make sales. Create customers - satisfied customers. In addition to the
immediate profit they provide on the first sale, satisfied customers help you build your
business in 2 other important ways:

1. They become a reservoir of repeat buyers. For some businesses that means repeat
buyers for more of the same product or service. For every business, it means buyers for
additional products and services.

2. They automatically refer more business to you from their friends and business
contacts. This is highly profitable business because it doesn't cost you any time or
money to get it.

 Whatever they Promise More, they Deliver:

Never make any promises you can't (or won't) keep. Nothing alienates customers faster
than getting something less than they expect from a business transaction. They won't do
business with you again. And they will tell everybody they know about their unhappy
experience - causing you to lose future customers.

 Always Give Customers More Than They Expect:

"Over deliver" on quality and service. Always exceed your customers' expectations.
You will win their long term loyalty. It also makes it difficult for competitors to steal
customers from you - even if they have lower prices. Customers will not risk an
uncertain experience with a competitor when they know they will get more than they
expect from you.

 Customers know how much they value them:

Let your customers know you are always thinking about them. Communicate with them
regularly. For example, create some special deals just for your existing customers. And

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announce new products or services to them before you announce them to the general
market.

 SWOT Analysis of Big Bazaar

Strength

 Prime location

 Large floor space allowing for better visual merchandising

 Large area also allows to stock a large variety of products under one roof

 Experienced and competent management

 Highly trained and motivated sales force

 Brand equity

 Large scale operations in various cities throughout the country allows them to reap
the benefits of “economies of scale.”

Weakness

 Large scale of operations sometimes acts as a barrier to personalized customer

relations.

 Large scale operations lead to reduced flexibility by increasing the amount of

overheads and a huge commitment in terms of fixed costs.

 A large organization structure leads to delayed decisions.

Opportunities

 Apart from the metros, cities like Ahmadabad, Pune, Lucknow, Indore and
Coimbatore have shown substantial retail presence. Most sport modern retail formats
like supermarkets, department stores and specialty chains. These markets are expected
to show exponential growth in the next few years. Thus Big Bazaar has the opportunity
to explore new markets.

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 Consumers are generally satisfied with the service that organized retailers extend to
them. More importantly, they are increasingly regarding these organized retailers as
providing ‘value-for-money’. These findings indicate that large retailers will capture
most of the higher consumer spending.

 Increasing penetration of the internet into Indian homes has provided Big Bazaar to
break the geographical barriers and to increase their customer base. The entry into
online retailing, would, in fact, expand the product categories available to the
consumer.

Threats:

 The time when retailers had to worry about competition only from their peers down
the street has come to an end. Big Bazaar is now facing increased competition in the
form of international retail chains that are making a beeline towards the highly potential
Indian markets. Moreover many big Indian business houses are also vying a space in
the Indian retail scene.

Big Bazaar focuses on aims to understand, anticipate, manage and personalize the needs
of an organization's current and potential customers. by providing options, alternatives,
floor display, brands ,preferences, product modification.

3. PANTALOONS

Pantaloon Retail India Limited (PRIL) a retailer was incorporated in 12th October of
the year 1987 headquartered in Mumbai the company operates through primarily the
Lifestyle' and Value' formats through multiple delivery mechanisms and lines of
business some of them being fashion food general merchandise home leisure and

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entertainment financial services communications and wellness. The Company has
stores in 51 cities across the country constituting over 6 million square feet of retail
space. It caters to the Lifestyle' segment through its 35 Pantaloons Stores and 5 Central
Malls as well as its other concepts. In Value' retailing it is present through 78 Big
Bazaar hypermarkets 113 Food Bazaars and other delivery formats.In the year 1991 the
company had launched BARE the Indian jeans brand. Initial public offer (IPO) was
made in May of the year 1992. During the year 1994 the Pantaloon Shoppe an exclusive
menswear store in franchisee format launched across the nation and also the company
starts the distribution of branded garments through multi-brand retail outlets across the
nation. In the year 1995 the John Miller formal shirt brand of the company was
launched in market. India's family store Pantaloons was launched in Kolkata during the
year 1997. In the year 2001 Big Bazaar Is se sasta aur accha kahi nahin' India's first
hypermarket chain was launched after this a supermarket chain also launched in the
period of 2002 under the name and style of Food Bazaar. The Company had initiated
India's first seamless mall in Bangalore in the name of 'Central' in the year 2004.
Pantaloons launched an exclusive line of film merchandise 'TASHAN Collection'
across all its 40 stores in April of the year 2008.

 CRM Practices in Pantaloons are as follows-

a) Pantaloons uses different strategies to attract customers and to retain customers.
b) Pantaloons encourage repeat customer visits through their unique offer and
special sales days.
c) Fashion Friday which gives additional 5% discount to each members.
d) Instant discounts for every time a customer shops in Pantaloons.
e) Special invites to the most happening events.
f) Tracking of buying behaviour – customers are informed for their presences
whenever there are new stocks of their preferred brand.
g) CRM is practiced through the “GREEN CARD” program. Green Card loyalty
program contributes approx 55% in profitability of Pantaloons across
country
h) Pantaloons maintains a customer database of 21 lakhs across India
i) Software used is the ‘Customer Loyalty Program’

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j) Shop and get rewards scheme
k) Feedback form
 Benefits of CRM to Pantaloons-
1. Customer profiling
2. Direct Marketing
3. Personally recognizing customers
4. Integration of processes at the back end to identify customer buying
habits.
5. Offering appropriate value and great service to encourage repeat business
6. Ensuring that customer satisfaction continues to improve
7. Cross selling and better service to customer
8. Beating the competition by offering a better product, competing on the service
9. experience rather than price alone.
10. Effective tool for retaining customer.
11. Promotion gets focused & thus cost reduction
12. Frequency of Green Card members doing repeat purchases

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 CHAPTER 10

BIBLIOGRAPHY AND ANNEXURE

10.1 BIBLIOGRAPHY

 Keith A. R, & Eli Jones(2008): “Customer relationship management: Finding value

drivers” Industrial Marketing management, vol. 37, 120–130.
 Stone, et Al. (2000).Customer relationship Marketing. Get to know your customers
and win their loyalty. London: Kogan Page Ltd. ISBN 0 7494 2700 0.
 Sharp, B., & Sharp, A. (1997). Loyalty programs and their impact on repeat-
purchase loyalty patterns. International Journal of Research in Marketing, 473-486.
 Dash Ck et al, “CRM implementation in Organized Retail”, 2013, Research Paper
 Boris Milovic, “Application Of Customer Relationship Management Strategy
(CRM) In Different Business Areas”, Economics and Organization, 2012, Vol. 9,
No 3, 2012, pp. 341 – 354.
 OPPORTUNITIES OF RETAIL SECTOR IN INDIA.pdf
 Berman, B. and Evans, J.R. (2003), Retail Management: A Strategic Approach, 9th
Ed, Prentice Hall Publ.
 https://www.salesforce.com/in/learning-centre/crm/what-is-crm/
 https://techonestop.com/types-of-crm-operational-analytical-collaborative#:~:text=There

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 %20are%20mainly%20three%20types,to%20perform%20all%20these%20activities
 M. Guruprasad (2018). “Study on the Consumer Preference and Perception of Supermarket
Chain - Case of D-Mart”, International Journal of Innovative Science and Research
Technology
 https://adirgrip.com/dmart-business-model/
 https://www.scribd.com/doc/139419110/customer-relationship-management-in-
pantaloons
 https://www.ijsr.net/archive/v2i4/IJSRON2013787.pdf

10.2 ANNEXURES

SURVEY QUESTIONNAIRE

1. Name ___________________________________
2. Gender:
o Male
o Female
3. Age
o 15-25
o 26-35
o 36-45
o 46-60
o 60 and above
4. Monthly Income
o Less than 10000
o 10001-25000
o 25001-35000
o 35001-50000

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 o Above 50000
5. From which mode do u often make purchases from an organized retail store like
D-mart or Big Bazar, etc ?
o Online
o Visit the store personally
6. Does the organized retail stores give importance to your needs and preferences ?
o Never
o Rarely
o Sometimes
o Often
o Always
7. Is customer relationship management given importance in the organized retail
stores visited by you?
o Never
o Rarely
o Sometimes
o Often
o Always
8. Please rate your experience with the organized retail stores considering the
customer relationship management activities performed by the stores.
o Not at all satisfied
o Slightly satisfied
o Moderately satisfied
o Very satisfied
o Completely satisfied
9. How likely are you to recommend to your friends and family for purchases from
organized retail stores considering your experience about the way of treating
their customers?
o Never
o Rarely

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 o Sometimes
o Often
o Always
10. Which Customer Relationship Management activities satisfies you the most for
making purchases from the organized retail stores?
o Friendly, helpful and knowledgeable staff
o Convenient location of the stores
o Opening hours of the store/timely delivery
o Easily find the merchandise that is needed
o Fair product prices 
o Fair returns and after sales policy
o Appealing store decor and lighting
o Well stocked store
o Proper grievance handling facilities
o Discounts and rewards to loyal customers
11. Do you plan to buy the product again in future from the store?
o Yes
o No
12. Do you think CRM enables the stores to identify the most profitable customers for the
organization?
o Yes
o No
13. Does the store u make purchases from, uses customer satisfaction surveys to understand
customer needs?
o Yes
o No
14. Do you think that with the CRM practices the stores are able to attract, and convert more
customer visits into deals?
o Yes
o No

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15. How often do you make purchases from the organized retail stores ?
o Weekly
o Monthly
o Twice a month
o Occasionally
16. The retail outlets provide you with customer feedback forms?
o Strongly Agree
o Agree
o Neither agree nor disagree
o Strongly disagree
o Disagree

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