By Glenn Gramling, Senior Vice President of Sales & Marketing, Infogain Corporation
If we see Customer Relationship Management (CRM) with a broader perspective, it can be called as a business strategy that includes implementation of policies, processes and enabling technologies. In today’s customer-centric environment, CRM plays a significant role in retail market. With the rapidly changing technologies and increasing competition, we need to keep a close eye on the upcoming CRM retail trends and keep updating ourselves accordingly.
Let’s begin with the retail industry and have a look at the challenges faced by this industry. More than any other business driver, competition characterizes the retail industry. Globalization, deflation, diversification of sales channels and, most of all, changing customer demands have merged to create a cutthroat environment in which retailers struggle to turn a profit. Today, it is a must for the retailers to work faster and smarter to deliver and track sophisticated, event-driven marketing communications with ever-tightening deadlines and turning data about customers into knowledge that empowers retailers to make better decisions.
Now let’s move to CRM. Customer Relationship Management (CRM) is the science of developing a customer-centric organization. With a CRM focus, a company utilizes every opportunity to delight customers, foster their loyalty and build long-term, mutually satisfying relationships. CRM solution implementation services are a combination of consulting and system integration services related to CRM initiatives. Consulting CRM services are advisory services designed to help companies analyze and improve the effectiveness of business operations and technology strategies.
In order to gain a competitive advantage and differentiate products and services in the marketplace, now the retailers are shifting their focus from a product-centric view to a customer-centric one. They have realized that only companies with powerful CRM system can be in competition and move ahead in the race.
With the recognition of powerful CRM solutions and how they help in facing tougher competition, the CRM software industry is taking on new life.
The various trends that I see in CRM retail are:
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The Three Tiers of Retailers
On the basis of the revenue earned, the retailers can be divided in three tiers. Tier 1 retailers who earn more than $1 billion as revenue, Tier 2 retailers who earn $250 million to $999 million and Tier 3 retailers who earn $50 million to $250.
Looking at the statistics and by trend analysis, I noticed that Tier 1 retailers are far ahead of the tier 2 and tier 3 retailers. The gap is significant.
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Adapting with the Change in Technology
The retailers are changing their approach to adapt themselves with the change of technology. Even Tier 3 retailers are changing their approach towards the use of technology. Medium size and small retailers (Tier 2 and Tier 3) have started adopting CRM solutions for the first time, and large enterprises have enhanced their initial CRM implementations.
The retailers who are still operating from the classical measures and have a pragmatic approach towards technology adoption, take my words, they are in real danger.
- Bridging the Gap
The retail industry is moving at an aggressive pace. Even Tier 3 business houses have adopted the technology that is used by Tier 1 retailers. The retailers are on the verge of enabling true customer centricity.
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Making Use of Analytical Tools
The retailers have started using the analytical tools and insights driven from the customer data more effectively. It allows the retailers to think above marketing and move to merchandising and store operations.
With all my experience and analysis of the current market trend, the predictions that I can make about the upcoming retail market is that the retailers will understand the need of having personal websites and in the coming two years almost one third retailers will personalize their web sites to provide better CRM services. In the coming two years, almost one-fourth retailers will undertake Multi-Channel CRM Projects.
As I shared earlier that the retailers have adopted customer-centric approach, so in the coming years, I believe that more than one fourth of retailers will take up customer behavior tracking projects. As retailers will move through the intricacy of the first-generation CRM projects, they will invest for more large-scale CRM initiatives in the year 2007. Moreover, with the increased awareness and knowledge, both retailers and vendors will be able to differentiate and understand that what is hyped and what is deliverable. In fact by the end of year 2007, most of the retailers will have a mind set that they’ll build their own CRM application and almost one-third retailers will start Customer Data Centralization Projects in the upcoming years.
Today’s retail marketplace has an ever-expanding set of products, stores, formats and geographies. Increasing competition and commoditization is making it more difficult for retailers to sustain profit margins and premium pricing. CRM solutions for retail empowers the retailers to increase retention, revenue and loyalty, by leveraging every customer interaction.
So the recommendations that I would like to make to the companies that provide or are planning to provide CRM solutions to retailers are that they must understand that operational efficiency no longer offers competitive differentiation. They should also vigilantly consider the criteria that retailers who are buying CRM services allude to most often.
Most importantly, CRM service providers must help the retailers who are still using the age old applications understand what a great risk they are taking by foregoing the modern CRM techniques. To gain the confidence of the retailers, CRM service providers must demonstrate deep retail industry knowledge and should provide business cases and proof points from similar projects in the retail industry.
At the end, I would like to say that as CRM service provider, you should provide tailored solutions to the retailers. This also helps to gain the confidence of the retailer that you understand their business and business requirements very well. You should also try to explain that with the help of CRM solution, today’s customer-centric companies would be able to view each customer contact experience as an opportunity to generate improved revenue and loyalty. To maximize the potential of their customers’ lifetime value, it is imperative that they have a CRM solution that empowers their staff to engage their customers in a continuous closed-loop dialogue.
Glenn Gramling is Senior Vice President of Sales & Marketing at Infogain Corporation, the leading provider in CRM, ERP, Integration and Business Intelligence Solutions and Services. He brings to Infogain Corporation nearly two decades of extensive industry experience in domestic and international environments, including sales, business development, global marketing and strategic relationship management. As Senior Vice President of Sales and Marketing, Glenn manages all of Infogain Corporation’s sales and marketing functions, including business development and strategic planning, helping to drive continued growth in the company’s core consulting services and assisting with the company’s expansion. Prior to joining Infogain Corporation, he was the Director of Strategic Marketing at Seagate Technologies. Glenn also worked at Hewlett-Packard for over 15 years in various senior sales and marketing positions. Glenn has also served as Vice President of Business Development and Sales Functions at both HiFive.net, Inc. and NOCpulse, Inc. He received his bachelor’s degree from Purdue University in industrial management, with a minor in computer science. For article feedback, contact Glenn at
glenn.gramling@infogain.com
 
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