BUILDING & SUSTAINING RELATIONSHIP IN RETAILING

Presented By TEAM 5 V.S.Aayisha Parveen C.R. Shrilekha N.Shri Aishwarya K.Vijayalakshmi M.S. Sindhu

RELATIONSHIP RETAILING


It seeks to establish and maintain a long term bonds with customers.

This means concentrating on the total retail experience, monitoring satisfaction with customer service, and staying in touch with customers.

To be effective in relationship retailing, a firm should keep two points in mind

A Win-Win Approach: Retailer must win- attract shoppers, make sales, earn profits. The customer must also win-receive good value, be treated with respect, feel welcome by the firm. 2. Develop a customer database : To provide information on people attributes and past shopping behaviour.
1.

FOUR FACTORS OF RELATIONSHIP RETAILING The Customer Base Customer Service Customer Satisfaction Loyalty Program

1. CUSTOMER BASE

The customer base is the group of customers that a business serves.

In many cases, the customer base is considered the business's target market, where customer behaviors are well understood through market research or past experience.

Example:

Bharti Airtel is the first service provider to cross 100 million subscribe base as announced by the chairaman on 19th august 2011. After having started its service in 1995 as Bharti Tele-Ventures, the company crossed the 7.5-crore customer mark in August 2008 and 5crore mark in October 2007, making it one of the fastest growing telecom company in the world.

WHAT SHOULD THE RETAILER DO?

Retailers must regularly analyse the customer base in terms of population and lifestyle trends attitudes toward and reason for shopping the level of loyalty, the mix of new versus loyal customer.

2. CUSTOMER SERVICE
Customer service refers to the identifiable, but sometimes intangible, activities undertaken by a retailer in conjunction with the goods and services it sells. It impacts on the total retail experience. Two elements of customer service:

Expected customer service:is the service level that customers want to receive from any retailer, such as basic employee courtesy.

Augmented customer service: includes the activities that enhance the shopping experience and give retailers a competitive advantage.

DEVELOPING A CUSTOMER SERVICE STRATEGY

What customer services are expected and what customer services are augmented for a particular retailer ?

What level of customer service is proper to complement a firm's image? Upscale retailer Discount retailer

Should there be a choice of customer services? Warranties may have optional extensions or fixed

lengths. A firm may offer one, three, and six month payment plans or insists on immediate payment.

Should customer services be free ? In settling on a free or fee-based strategy, a firm must

determine which customer services are expected (these are often free) and which are augmented (these may be offered for a fee).

How can a retailer measure the benefits of providing customer services against their costs? A retailer should plan augmented customer services based on

its experience, competitors' actions, and customer comments; and when the costs of providing these customer services increase, higher prices should be passed on to the consumer.

How can customer services be terminated ? Once a customer service strategy is set, shoppers are likely to

react negatively to any customer service reduction. Therefore, some costly augmented customer services may have to be dropped.

PLANNING INDIVIDUAL CUSTOMER SERVICES

CREDIT PURCHASES DELIVERY ALTERATIONS AND INSTALLATIONS CENTRALIZED OR DECENTRALIZED PACKAGING COUNTERS AND COMPLAINTS

CNTD

GIFT CERTIFICATES& TRAIL PURCHASE OTHER USEFUL CUSTOMER SERVICES- interior designers, personal shoppers, ticket outlets, plentiful parking, water fountains, pay phones, restrooms, a restaurant, baby-sitting, fitting rooms, a beauty salon, shopping bags, help desks and information counters

CUSTOMER SATISFACTION

Customer satisfaction occurs when the value , quality and customer service provided through a retailing experience meets customer expectation.

Retail satisfaction consists of three categories: shopping system satisfaction , buying systems satisfaction and customer satisfaction.

Most customers do not complain when dissatisfied. They just shop elsewhere. Most people feel complaining produces little or no positive results. The retailers must obtain regular feedbacks.

LOYALTY PROGRAMS

Retail loyalty programs evolved when progressive retailers recognized that without a "customer identification tool," they were unable to recognize individual customers.

The basic benefits of using a loyalty program to obtain customers are: Shift - Acquire new customers Lift - Increase the spending of existing customers Retention - Improve the natural churn rate of customers Profit mix - Shift spending to higher margin products.

A retail establishment or a retail group may issue a loyalty card to a customer who can then use it as a form of identification when dealing with that retailer.

EXAMPLES:

Shopper's Stop has been offering a loyalty programme called First Citizen . Lifestyle -The inner Circle loyalty Programme. Reliance Retail - "Reliance One"

GOODS AND SERVICE RETAILING

GOODS RETAILING

SERVICE RETAILING

Goods retailing focuses on the sale of (physical) products Some retailers engage in either goods retailing (such as hardware stores) No sales- goods can be stored

Service retailing involves transactions in which consumers do not purchase or acquire ownership of tangible products. service retailing (such as travel agencies) others offers a combination of two ( such as video stores that rent , as well as sell, movies). No possibility of delayed sales

DIFFERENCES BETWEEN GOODS AND SERVICE RETAILING

CONTINUED

Service retailing encompasses diverse businesses as personal services hotels and motels auto repair and rental recreational services. In addition, although several services have not been commonly considered a part of retailing (such as medical , dental , legal ,and educational services), they should be when they entails final consumer sales.

KINDS OF SERVICE RETAILING. There are 3 kinds of service retailing. Rented goods services Owned goods services Non goods services

FOUR UNIQUE ASPECTS OF SERVICE RETAILING Intangibility Inseparability Perishablity Variability

INTANGIBILITY

No possibility of the customer to see, touch or feel the service proposition before or during its purchase No impulse purchase Very difficult to evaluate or measure quality in services The customer cannot stake any claim of ownership or possession of the service proposition ;they can only experience the offer

PERISHABILITY
Unlike goods services cannot be stored but have to be transacted during the given time. If transactions does not take place then service offer loses its value Service revenue can never be recovered with the hope of future sales. There is the element of opportunity lost.

VARIABILITY
Not consistent with quality and delivery Same service can never be delivered in the same way to the same customer across two different time periods The service transaction as having a different quality when delivered from two different places.

INSEPARABILITY
The production and consumption takes place at the same time The presence of the service retailer and the customer is important. Even if one of them is absent the service transaction cannot take place

ABILITIES REQUIRED TO BE A SUCCESSFUL SERVICE RETAILER

Specific skills are often required for the retailer. The retailer must select staffs who are courteous towards customers. Retailers must accept responsibility for complaints and rectify problems quickly. It is important to listen to customers opinion on the outlets customer service.

TECHNOLOGY AND RELATIONSHIPS IN RETAILING

TECHNOLOGY AND RELATIONSHIPS IN RETAILING Facilitates a better communication flow between retailers and their customers between retailers and their suppliers Faster transactions.

IMPACT OF TECHNOLOGY IN RETAILING In each firm, the roles of technology and humans must be clear and consistent with the goals and style of that business. Although technology can facilitate customer service, it may become overloaded and break down. It is also viewed as impersonal by some consumers. New technology must be set up efficiently with minimal disruptions to suppliers, employees, and customers.

CONTD
Shoppers expect certain operations to be in place, so they can rapidly complete credit transactions, get feedback on product availability, and so on. By enacting the advances, they can be distinctive. For instance, consider the paint store with computerized paint-matching equipment for customers who want to touch up old jobs.

TECHNOLOGYS EFFECTS IN TERMS OF ELECTRONIC BANKING Automatic teller machines(ATM) and The instant processing of retail purchases. allows centralized recordkeeping and lets customers at bank and nonbank locationsincluding home or office. Besides its use in typical financial transactions (such as check cashing, withdrawals, and transfers), electronic banking is now used in retailing.

CONTD.
Many retailers have accepted some form of electronic debit payment plan, whereby the purchase price is immediately deducted from a consumers bank a/c by computer and transferred to the retailers a/c. Worldwide, there are more than 1.1 billion ATMs and people make billions of ATM transactions yearly

SMART CARD SYSTEM

New version of electronic payment is called the smart card The smart card contains an electronic strip that stores and modifies customer information as transactions take place. It is similar to pre-paid phone cards. As they shop, card readers deduct the purchase amount from the cards. After they are used up, the cards are thrown away or are recorded. In the future, Smarter smart Cards are expected to be for more permanent and store more information.

IMPACT OF TECHNOLOGY IN CUSTOMER AND SUPPLIER INTERACTIONS:

Retailers widely use point-of-sale scanning equipment. By electronically scanning products, retailers can quickly complete transactions, amass sales data, give feedback to suppliers, place and receive orders faster, reduce costs, and adjust inventory. The disadvantage here is the error rate.

SELF-SCANNING SYSTEM
A super market customer scans the groceries and sacks them. The sacking area is built atop a scale linked to the scanner that alerts the customer if an item was scanned twice or not at all. After all items are scanned, the customer scans in any coupons and selects a payment method. The machine accepts cash, credit, and debit cards, and electronic benefits transfers.

CONTD.
Customers can use checks and food stamps but may need assistance from a cashier. Additionally, a cashier monitoring the check out stations will be required to enter the birth date of customers purchasing alcohol or cigarettes.

ETHICAL PERFORMANCE AND RELATIONSHIPS IN RETAILING

ETHICAL CHALLENGES FALLS INTO 3 INTERCONNECTED CATEGORIES Ethics relates to the retailers moral principles and values Social Responsibility Involves acts benefiting society Consumerism entails protecting consumer rights.

ETHICS
Retailers have a moral obligation to act ethically a failure to be ethical may lead to adverse publicity, law suits, and the loss of customers and lack of self-respect among employees.

UNETHICAL PRACTICES AGAINST THE SOCIETY Raising prices on scarce products after a natural disaster Not having adequate stock when a sale is advertised Selling alcohol and tobacco products to children Deflaming competitors Selling refurbished merchandise as new

HOW TO AVOID UNETHICAL ADS

The best way to avoid unethical ads for firms is: to have written ethics codes, to distribute them to employees and channel partners, to monitor behavior, and to punish poor behavior- and for top managers to be highly ethical in their own conduct.

SOCIAL RESPONSIBILITY
Initiatives taken by retailers are: having employees participate in community events donations to charitable groups giving away goods and services to a school wheel-chairs for persons with disabilities

CONSUMERISM
Consumerism involves the activities of the government, business, and other organizations to protect people from practices infringing upon their rights as consumers

WHY RETAILERS PREFER PRACTICING CONSUMERISM

Some retail practices are covered by legislation People patronize firms perceived as customer oriented and not to one seen as greedy Consumers are more knowledgeable, price-conscious and selective than in the past They may not provide enough personal attention for shoppers or may have inadequate control over employees The use of self service is increasing and it can cause frustration for some shoppers Innovative technology is unsettling to many consumers, who must learn new shopping behavior Retailers are in direct customer contact, so they are often blamed for and asked to resolve problems caused by manufacturers.