A STUDY ON THE EFFECTIVENESS OF DIGITAL CRM PRACTICES IN RETAIL STORES AT BANGALORE METRO-CITY

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1 A STUDY ON THE EFFECTIVENESS OF DIGITAL CRM PRACTICES IN RETAIL STORES AT BANGALORE METRO-CITY *Mr. Bandi S Herold Associate Professor Department of Management Studies & Research, Don Bosco Institute of Technology, Bangalore 74 **Ranjith Kumar K.N. MBA Student Don Bosco Institute of Technology, Bangalore 74 **Gopi Krishna P.V. MBA Student Don Bosco Institute of Technology, Bangalore 74 ABSTRACT In a stiff hyper market environment, where competition is becoming sterner, businesses need to exercise digital customer relationship management strategies to stamp their core competency and to become a USP. CRM is about understanding the potential customers of the business and nurturing relationships with them. Digital CRM is the use of internet communication channels and technologies to enhance customer relationship management (CRM) and customer experience management (CEM) initiatives. With increased internet usage the last decade, the digital and social media scenery has witnessed a paradigm-shift not only due to cost-effectiveness and viability in transmitting the messages but also the barriers to enter and scale up are minuscule compared to traditional media. Surveys reveal that digital marketing warrants a colossal growth in the present-day scenario and digital CRM practices paved the way to build a solid customer base for competitive advantage and effective commercial outcome by influencing the customers buying behavior and improving customer acquisition, retention, loyalty & brand equity, thus, leading to organizational sustainability, growth & development. Digital CRM practices ensures improved customer relationships & loyalty, promotes sales, envisage growth potential, optimizes communication channels, builds the brand from a nascent stage, boosts reputation & goodwill. The objective of this research paper is to investigate the role, implementation, & effectiveness of digital CRM practices in Retail Stores at Bangalore Metro-city. Keywords: Digital CRM, Social bonding, Retail stores, Customer acquisition, Loyalty, Effectiveness, Communication channels. Introduction: Modern technical and social shifts have led to radical changes to the way customers and companies interact. Explicitly, the rise of social media and digital channels are providing companies the opportunity to study their customers and contact them swiftly and directly. At the same time, customers expectations of companies with regard to customer management, customer service, and marketing have evolved. Digital CRM places the customer in the limelight. It integrates digital channels such as social media or apps into the traditional CRM system enabling companies to generate new customer data through methods such as social listening. Digital 63

2 CRM enables retailers to better understand the specific context customers are in, and to efficiently launch CRM activities in real-time. The crux of this paper is to examine the effectiveness of Digital CRM practices in Retail Stores at Bangalore Metro-City Review of Literature The cost efficiency and diversity of digital channels had now facilitated the marketers an interactive dialogue with their customers frequently with increased level of personalization. Growing customer power, internet of things, declining importance of classic mass media, integration of fast changing channels, growing data complexity and unconventional competitors are the trends driving change in customer interaction. With Digital CRM idyllically all data is stored in a unified data warehouse to which all departments have access. IT plays an integral part in the successful deployment and serves an important enabling function. The real challenge with data is not to gather more but to use the existing data treasure efficiently. Significance of study Digital CRM is a cohesive effort that strengthens the digital network of relationship of both the parties (firm & customer) in a mutual beneficial way. A study on the effectiveness of digital CRM practices are significantly important in the present day scenario because; A satisfied customer brings in more additional new customers for firm. Attracting new customers costs double the times than serving the old ones. Loyal customers contribute to 80% of the firm s revenue. Objectives of study 1. To study the current digital CRM practices in retail sector. 2. To study and determine to what extent the Digital CRM practices deployed by the retailers facilitates them in driving in both the Revenues and the Customers. 3. To review the effectiveness of digital CRM practices in retail stores of Bangalore metro-city. 4. To identify the digital mailing solutions opted by retailers to communicate with customers. 5. To study the impact of social bonding on the effectiveness of Digital CRM practices. Research Methodology The research was conducted to determine the effectiveness of Digital CRM practices (from view point of retailers) and to find out to what extent these practices acts as a catalyst to boost their revenues of the retailers. The researcher administered a Structured Questionnaire in order to collect the first hand primary information from the retailers. Secondary information is collected from journals, newspapers, articles & company websites. The researcher resorted to the Descriptive type of research Design and used convenient type of sampling method in his study with a sample size of 32 retail outlets. The researcher used 2 Statistical tools namely - Simple Percentage Analysis and t- test in order to assess the effectiveness of Digital CRM practices particularly with social bonding and the acceptance of the type of the credit cards. Hypotheses Hypothesis I H0: There lies no significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with social bonding. H1: There lies a significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with social bonding. Hypothesis - II H0: There lies no significant variation between the opinion of the respondents towards effectiveness of Digital CRM practices with the acceptance of the type of the credit cards. H1: There lies a significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with the acceptance of the type of the credit cards. Scope of the Study: The Study is restricted only to those retail outlets and also to those retailers who deploys Digital CRM practices Limitations of study Though the project survey has been carried out to reach meaningful recommendations and conclusions through findings, but still it suffers from a few limitations stated below; The area of study is confined to Bangalore metro city only. The Study is carried out only from the point of view of the retailers There are chances for non-disclosure of true information by the retail-outlets. The Sample Size is restricted only to 32 owing to time constraint 64

3 Analysis and Interpretation Table 1: Tabulation of Retailers responses on digital CRM practices 1 Yes No 0 0 Source: Primary Data-Questionnaire-Q1 The Table 1 reveals that 100 percentage of the retailers deploys digital CRM practices at their retail outlets. Table 2: Tabulation of Retailers responses on having digital customer database system 1 Yes No Source: Primary Data-Questionnaire-Q2 From the Table 2, it is evident that 81.25% of the retailers possess digital customer database system to interact with the customers. Table 3: Tabulation of Retailers responses on having digital solutions to assess customer satisfaction levels 1 Yes No 0 0 Source: Primary Data-Questionnaire-Q3 It is ostensible to note from Table 3 that 100% of the retailers possess digital solutions to assess customer satisfaction levels at their retail outlets. Table 4: Tabulation of Retailers responses on founding social bonds with customers digitally 1 Yes No Source: Primary Data-Questionnaire-Q4 The Table 4 represents that 50% of the retailers had established social bonds with the customers digitally. Table 5: Tabulation of Retailers responses on the digital mailing solutions opted for customer interaction S.No Mailing solutions No. of Retailers opted Percentage 1 What s app SMS Voice Mail Source: Primary Data-Questionnaire-Q5 The Table 5 gives a clear picture of note that 68.76% of the retailers has opted SMS as a digital mailing solution for customer interaction, while 25% of them had opted Whatsapp, 3.12% of them opted and the remaining had opted Voic for customer interaction. 65

4 Table 6: Tabulation of Retailers responses for having official website to promote business digitally 1 Yes No Source: Primary Data-Questionnaire-Q6 From the Table 6, it is evident that 75% of the retailers report that they do not have an official website to promote their business digitally, while 25% of them had reported positively of possessing official website. Table 6A: Tabulation of website retailers responses for offering customers to shop online 1 Yes No Total Source: Primary Data-Questionnaire-Q6A The Table 6A reports that 50% of the website retailers offer the customers to shop online and the remaining retailers offer no such provision to shop online. Table 7: Tabulation of Retailers responses on digital app provision to promote business digitally 1 Yes No Source: Primary Data-Questionnaire-Q7 Table 7, reveals that only 12.5% of the retailers had digital app provision for customers to promote their business digitally while 87.5% of them had not set digital app provision to customers. Table 7A: Tabulation of Retailers inspirational force to resort digital marketing for App S No Retailers inspirational force No. of Respondents Percentage 1 Digital billboards Social Media Internet Television 1 25 Total Source: Primary Data-Questionnaire-Q7A From the Table 7A, it is evident that 50% of the retailers inspirational vigor resort to Internet digital marketing for App promotion, while 25% of them to Social media and the remaining 25% of them to Television. 66

5 Table 8: Tabulation of Retailers inspiration on digital mode of advertising 1 Yes No Source: Primary Data-Questionnaire-Q8 It is obvious from the Table 8 that 71.87% of the retailers get inspired by digital mode of advertising. Table 9: Tabulation of Retailers responses in offering digital billing mechanism 1 Yes No 0 0 Source: Primary Data-Questionnaire-Q9 The Table 9 reveals that 100% of the retailers offer digital payment mechanism for billing purpose. Table 10: Tabulation of Retailers responses on processing error-free digital invoices 1 Yes No Source: Primary Data-Questionnaire-Q10 It is quite evident from the Table 10 that 84.37% of the retailers reported that they process error-free digital invoices. Table 11: Tabulation of Retailers responses on offering loyalty cards 1 Yes No Source: Primary Data-Questionnaire-Q11 The Table 11 reveals that 50% of the retailers offer loyalty cards to assess the loyalty of the customers. 67

6 Table 12: Tabulation of Retailers responses on acceptance of all types of credit cards 1 Yes No 0 0 Source: Primary Data-Questionnaire-Q12 It is obvious to note from the Table 12 that 100% of the retail outlets accept all types of credit cards. Table 13: Tabulation of Retailers responses on having digital grievance redressal mechanism 1 Yes No Source: Primary Data-Questionnaire-Q12 The Table 13 reveals that 84.37% of the retail outlets have digital grievance redressal mechanism to handle the customer grievances. Table 14: Tabulation of Retailers responses on the effectiveness of digital CRM practices. 1 Yes No Source: Primary Data-Questionnaire-Q14 From the Table 14, it is evident that 93.75% of the retailers found Digital CRM practices effective. Hypotheses Testing Hypothesis I H0: There lies no significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with social bonding H1: There lies a significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with social bonding. Social Bonding versus Effectiveness of Digital CRM Practices Opinion of the retailers towards effectiveness of Digital CRM Practices Parameter: Social Bonding Yes No Total Yes No Total Source: Primary Data-Questionnaire-Q4 68

7 Anova: Two-Factor without Replication Summary Count Sum Average Variance Row Row Column Column ANOVA Source of SS df MS F P-value F crit Variation Rows Columns Error Total Inference: As the Calculated p- value (0.83) is greater than the p- Value of 0.05, H0 is accepted and hence it is concluded that there lies no significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with social bonding. Hypothesis - II H0: There lies no significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with the acceptance of the type of the credit cards. H1: There lies a significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with the acceptance of the type of the credit cards. Credit Card Acceptance versus Effectiveness of Digital CRM Practices Opinion of the retailers towards effectiveness of Digital CRM Practices Parameter: Acceptance of the type of the Yes No Total credit cards Yes No Total Source: Primary Data-Questionnaire-Q12 Anova: Two-Factor without Replication Summary Count Sum Average Variance Row Row Column Column ANOVA Source of SS df MS F P-value F crit Variation Rows Columns Error Total Inference: As the Calculated p- Value (1) is greater than the p- Value (0.05), H0 is accepted and hence it is concluded that there lies no significant variation between the opinions of the respondents towards effectiveness of Digital CRM practices with the acceptance of the type of the credit cards. 69

8 Significant Findings 1) All the surveyed retail outlets deploy digital CRM practices. 2) 81.25% of the retailers possess digital customer database system to interact with the customers. 3) 50% of the retailers had established social bonds with the customers digitally. 4) 68.76% of the retailers has opted SMS as a digital mailing solution for customer interaction. 5) 75% of the retailers report that they do not have an official website to promote their business digitally. 6) 87.5% of the retailers had not set digital app provision for customers to promote their business digitally. 7) 71.87% of the retailers get inspired by digital mode of advertising. 8) 100% of the retail outlets offer digital payment mechanism for billing purpose. 9) 84.37% of the retail outlets process error-free digital invoices. 10) 84.37% of the retail outlets have digital grievance redressal mechanism to handle the customer grievances. 11) 93.75% of the retailers had found Digital CRM practices effective. Suggestions: 1) Retail outlets need to concentrate on establishing strong social bonds with all the customers digitally. 2) Retailers should establish their own official websites to promote their businesses digitally. 3) Retailers should develop and promote their digital apps to ease the customer shopping. 4) Retailers should process and offer 100% error free digital invoices. 5) Retailers need to offer loyalty cards for all their customers and reward them by point system. 6) Retailers need to handle customer grievance redressal mechanism effectively. Conclusion: Digital CRM lessens wasteful expenditure and make entire digital marketing process distinctly solicitous scenery. It lets companies to determine the type of customer relationships and interactions needed to optimize company s sales and growth potential levels. Digital CRM is incredibly cost-effective and allows firms to target digital marketing services. Digital CRM practices pave the way for firm s growth, sustainability, prosperity and success. References: 1) P. Kotler, Marketing Management: Analysis, Planning, Implementation, and Control, Prentice Hall International, Upper Saddle River, ) Gordon, Relationship Marketing: New Strategies, Tech- niques and Technologies to Win Customers You Want and Keep Them Forever, John Wiley and Sons, Hoboken, ) J. Dickie, Does CRM = Sales Effectiveness or Sales Ineffectiveness? IT Toolbox, Scottsdale, ) Gartner, Inc., Gartner Says Spending on Social Software to Support Sales, Marketing and Customer Service Proc- esses Will Exceed $1 Billion Worldwide by 2013, Gart- ner, Inc., Connecticut, ) B. Goldenberg, CRM: The Past and the Future, Customer Relationship Magazine, Vol. 10, No. 1, 2006, p ) 7) 8) 70