The retail sector has seen unprecedented
growth in the last few years and according to
research firm Lucintel, the global retail market
is forecast to reach an estimated $20,002
billion in 2017 with a CAGR of 3.9% in the
period 2012–2017.
Global izat ion, recessionar y trends in
developed countries, growth of emerging
economies and the rise of online retail have
impacted the retail market dynamics to a great
extent. The increasing adoption of digital,
social, and mobile technologies is changing
the way consumers buy. According to a
research conducted by Deloitte, more than
74% of shoppers conduct online research
before making in-store purchases. While
consumers are reaping the benefits ,
companies are struggling to stay profitable in
this changing landscape.
With a multitude of choices, consumers are
dictating terms today. The online retail
revolution has changed customer preferences
and expectations drastically. Customers can
now make purchases from a variety of sources,
get product reviews and information, compare
Retail Industry overview
paragyte
deals and get rewards for loyalty. As the
competition increases and consumers drive
bargaining power, success will come to those
who are able to provide multi channel sales, an
engaging online and in-store customer
experience, competitive pricing and a robust
supply chain.
They will need to break traditional moulds and
focus on innovation when it comes to offering
products and services. Analysts and industry
observers believe that retailers will need to
create new opportunities to acquire new
customers and retain existing customers.
Today retailers have the opportunity to capture
and use to massive amounts of customer data
such as web browsing patterns, social
interactions, supply chain data, customer
service interactions and reviews. To put all this
data in perspective and derive actionable
insights from it, retailers need to look to CRM
technologies and have a sound customer data
strategy in place. Companies will need to train
a significant amount of focus on Innovation,
technology enablement and customer
centricity to stay ahead in this game.
1
According to an analysis by Watermark
Consulting, 10-year investment returns from
publicly traded customer experience leaders
(measured by Forrester's Customer Experience
Index) were 43%, while investments from
customer experience laggards generated
negative returns.
This shift towards customer centricity has led
t o a n i n c r e a s e d a d o p t i o n o f C R M
methodologies and technology solutions
among enterprises over the last few years. In a
market where grabbing customer attention is
getting tougher by the day, CRM has helped
retailers understand their customers better
and improve revenues and customer retention.
The early adopters of retail CRM systems
primarily used it for enabling targeted
marketing. With ecommerce, the scope of
CRM has expanded across the customer
lifecycle, right from acquisition to supply chain
and customer service, integrating disparate
customer focused functions like marketing,
sales and customer service.
Significance of CRM in retail
2
paragyte
Retailers are betting on the potential of Big
(customer) data to stay relevant in a market
challenged by economic volatility, savvy
consumers, mobile proliferation and growing
number of channels. According to a research
conducted by Superoffice.com, in 2008 only
12% of businesses used cloud based CRM –
that figure has increased to 87% in 2014. When
it comes to investment in technology, CRM
software leads, with 49% of businesses
planning to increase spending. The chart
below shows how businesses plan their
CRM investment.
A customer-obsessed enterprise focuses its strategy, its energy, and its budget on processes that enhance knowledge of and engagement
with customers and prioritizes these over maintaining traditional competitive barriers. – Forrester Research
Forrester - Age of the Customer
Source: Superoffice.com
3
paragyte
“Get closer than ever to
your customers. So close
that you tell them what
they need well before they
realize it themselves."
- Steve Jobs
4
paragyte
1 Retention
A recent study by Aberdeen Group found that
59 percent of retailers identified a lack of
consumer insights as their top pain point. CRM
provides visibility into customer interactions
across the lifecycle, from marketing customer
service. Retailers can use this data to analyze
customer behavior and preferences and
develop customer retention strategies such as
targeted promotions and offers, product
recommendations and loyalty programs.
Benefits of CRM in Retail
2 Profitability
CRM data can used to derive actionable
insights on how to increase aspects such
order size and revenue per customer. With a
strong data based recommendation engine,
retailers can drive more sales by creating
cross-sell / upsell opportunities.
Attracting new customers is typically 5 to 10
times more expensive compared to
retaining old customers. CRM can help
reduce cost of customer acquisition and
retention by better customer targeting and
offer marketing.
Targeted marketing campaigns deliver
better ROI than traditional marketing
efforts. This helps companies optimize their
marketing spend and get better results.
3 Effectiveness
With CRM systems, companies can leverage
marketing automation capabilities through
seamless integration capabilities. Marketing
automation adds tremendous value to
marketing capabilities. These tools can be
utilized to create targeted segmentation and
personalize the offers and marketing
communication. Campaign management
becomes a lot more effective with easy
scheduling and follow up functionalities. The
reporting and analytics modules help them
track key success metr ics of specific
campaigns, attach revenues to specific
campaigns and measure ROI. This helps
marketing become more revenue oriented and
aligned to the business objectives.
4 Personalization
According to Harvard Business Review,
personalization can deliver five to eight times
the ROI on marketing investment and boost
sales 10 percent. CRM data can enable
enhancement of consumer experience
thorugh personalization by offer, timing and
channel. Companies like Amazon and Macy's
have mastered the art and science of customer
experience and are paving the way for others
to follow.
5
paragyte
5 Performance
Performance Analysis helps retailers make
crucial business decisions and make the
necessary course corrections when needed.
Customer data analytics also enables
identification of customer behavior and
buying patterns, helping them develop
accurate and timely revenue forecasts. A
robust reporting mechanism can drive visibility
and keep the entire organization aligned to
business objectives.
Customer Focus
6 Service
Customer service is a crucial aspect of
customer retention. With CRM, customer
service teams can keep a close eye on
customer satisfaction metrics and ensure high
standards of customer experience. CRM
systems help close loop the customer
experience process right from acquisition
to service.
CRM puts the spotlight on the
customer rather than the
product . Armed wi th a
combination of CRM, big
data analytics and technology
enablement, retailers are
much better equipped to
handle evolving market and
customer dynamics.
6
paragyte
Paragyte offers the entire gamut of CRM capabilities, be it offshore development, or migration
from a different CRM model, specific to business. With expertise in Microsoft Dynamic CRM and
Salesforce and other leading technologies, Paragyte has helped SMEs and enterprises
implement best-in-class CRM systems.
Business Analysis CRM for a business goes beyond just coding and designing; it involves completely
revolutionizing the way things work and propelling the business towards maximum growth. For
this, it is necessary to understand the business domain. The team at Paragyte gives special
importance to domain knowledge and ensures that the CRM solution adapts to the business
environment.
Change Management A migration from old to new is almost always accompanied with a challenging transition period.
Paragyte's professionals strive to ensure that the change happens as smoothly as possible by
devising solutions for all possible transitional issues.
Mobility Readiness Paragyte has a proven track record in mobility solutions, and it brings this very expertise in its
CRM solutions to provide its clients that cutting edge to their businesses.
Paragyte CRM Capabilities
There is no doubt about CRM's potential to add value in the retail industry. It does however bring
its own share of challenges.
Data SecurityThe recent data breach at Target shows how vulnerable retailers are when it comes to customer
data. The breach had a massive impact on Target's brand reputation and revenues. This is surely
giving sleepless nights to a lot of retail executives. Target has subsequently invested a lot of time,
money and effort in reinforcing its data security systems and processes. The solution lies in being
prepared for the highest threats possible. IT organizations need to ensure that there are systems
and processes in lace to avoid such incidents.
Data driven cultureIn the business environment today, there is no shortage of data. There is rather an overload of
data. Organizations need to adopt and encourage a data driven culture across
the board. This takes guesswork out of the process and brings in better accountability. Such a
culture needs ownership from staffing, HR, Learning & development and quality functions.
Adoption and compliancethe success of CRM depends on availability of good quality of data. That means across the
customer lifecycle, concerned functions need to ensure that relevant customer data is fed in to
the system. Executives need to ensure that the right metrics are being measured and reported on
a regular basis. When it comes to a data driven culture, executives need to lead by example and
the organizations need to encourage and reward positive adoption and compliance behavior.
7
paragyte
Challenges
ConclusionCRM has shown demonstrable business impact in the retail industry and it definitely here to stay.
CRM Technologies will continue to revolutionize online and brick and mortar retail. What it also
certain is that consumers will drive the trends and retailers will need to adapt. Retailers will need
to think beyond merchandising and tactical operations and focus on acquiring and retaining
customers.
The combination of CRM, big data analytics and technology is going to determine the success
and longevity of retail companies. When it comes to CRM adoption, fortune will favor the brave
and those left behind will isk oblivion.
References: Superoffice.com, Lucintel, Deloitte, Forrester, Aberdeen, HBR
About ParagyteParagyte provides innovative solutions in a wide range of technologies and domains, to various
small and large organizations. We strive to provide solutions that increase our clients' efficiency,
reduce costs and maximize their return on investment. With a team of skilled and enthusiastic
technical experts, who are ever-eager to better themselves in the quality of services they provide,
we have turned challenges into opportunities for many of our customers and helped them yield
significant results through their partnership with us.
To know more about Paragyte, visit www.paragyte.com
paragyte
United States
New York
77 Water Street, 8th Floor
New York, NY 10005
Ph: +1 917 725 5089
Seattle
16301 NE 8th Street, #207
Bellevue, WA 98008
Ph: +1 917 725 5089
India
Pune R&D Center 1
201, World Trade Centre
Pune, 411014
Ph: +91 20-26655442
Pune R&D Center 2
7 Kemps, Road 13
Kalyani Nagar, Pune, 411006
Ph: +91 20-26612499
www.paragyte.com
email: [email protected]
2015 © Paragyte Technologies