Role of CRM in organized retail in India

Abstract

Retailing is the largest private industry in the world with annual sales close to us $ 7 trillion. The Indian retail industry is the fifth largest retail industry in the world contributing around 17% of India s GDP and employing more than 8 % of its population. Though the share of organized retail in Indian Retail scenario is less than 5 % today but it is expected to grow at CAGR of 40-45% within next five years. The departmental stores and grocery form the largest share of organised retail in India and are also expected to be the fastest growing formats. It s no secret that retail profitability is connected with customer insight. Years ago, the best retailers were those who that could generate pedestrian traffic and had well merchandised stores offering fresh displays and good service. Firmly entrenched in the Relationship Age , today s leading global retailers are leveraging their customer bases to build profitable relationships with valuable customers by focusing their merchandising, marketing and customer service offering into a powerful integrated brand offering. This paper aims to study the customer relationship management practices being adopted by these successful retailers across the globe and find out whether these practices can be implemented successfully in Indian retail context with focus on Departmental and Grocery store formats. For achieving the same, extensive literature review has been done to find the scope of Customer Relationship Management in the retail context. The paper focuses on broad strategic domain of CRM which includes the role of retail organisation and its constituents required to create comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for both the customers and retailers. Customer focused strategies adopted by leading CRM business practitioners like Tesco, Macy s, Mark and Spencer s etc. are studied in detail to know how these retail formats have been successful in implementing them and create a sustainable competitive advantage. Finally, the research focuses on how these practices can be adopted by the Indian retailer to create a sustainable competitive advantage for them.