CRM IN RETAIL

Symbiosis Centre for Information Technology

Report entitled
A Study on the Customer Relationship Management (CRM) in RETAIL
process with
particular reference to BIG BAZAR
Submitted by

Name

: AKASH GOEL

PRN#

16030241005

Name

: GEETIKA PANT

PRN#

16030241018

Name

: GUNJAN SHARMA

PRN#

16030241019

Name

: HARSHGIRI GOSWAMI

PRN#

16030241020

Division
Batch

:A
: 2016 - 18

Subject/Code
Semester
Date

: Business Process Management

:I

: 15th SEPTEMBER, 2016

For Office Use only

Name of the Faculty

Signature of the Faculty

: Suneel K Prasad

CRM IN RETAIL

Index
Sr No.
1.

Chapter
Introduction

2.

Objective

3.

About the company- Big bazar

4.

Why CRM in Retail

5.

CRM at Big Bazar

6.

Business Process Architecture

7.

Process Architecture

8.

Process Design

9.

Process Model Description

10.

Bibliography

CRM IN RETAIL

1. Introduction:
Customer Relationship Management (CRM) is a managerial philosophy that seeks to build
long term relationships with customers. A company may produce very high quality goods but
it wont be successful if it fails to manage or satisfy its customers. According to a study in
Harvard, an exceptionally satisfied customer is 6 times more likely to buy again as one who
is merely satisfied and only 5% increase in customer loyalty can boost profit from 25% to
85%. This CRM is a very significant part of business which helps in achieving customer
satisfaction and loyalty.

2. Objective:
Our main motive of the study is to learn about how a typical retailer like Big Bazaar
processes work and in the process how the concepts of BPM are mapped and applied in it. In
the project we have first studied the CRM architecture in Big Bazaar. In the various
processes we have selectively capture the As-is version and then suggested an improved
To-be version of the same process. For modelling we have used tools like Signavio and
drawn the diagram through it.

3. About The Company- Big Bazaar

Big Bazaar is one of the largest retail chain under Future Group.
It was headed by Kishore Biyani in 2001, with its headquarters at Mumbai.
It is a subsidiary of Pantaloons Retails Ltd and it follows the business model of US
based retailer Wal-Mart.
It has current employee strength of about 36000 and has 214 divisions.
Big Bazaar is a 13-year-old hypermarket chain with more than 100 stores all over the
country.
It is an amalgamation of Indian bazaars i.e a combination of a supermarket and a
departmental store which provides a touch of modern and retail facilities.
It offers a wide mix of products right from apparel to general merchandise like
plastics, utensils, cookery, home furniture, cutlery, sports goods, car accessories,
music, books, computer accessories and many more.
It is a destination where you get all the products available at prices lower than the
MRP, thus setting a new level of standard in price, convenience, and quality.
Hafte ka sabse sasta din was introduced by Big Bazaar, wherein extra and special
discounts were offered to the buyers on every Wednesday of the week to attract
potential buyers into their store.
Big Bazaar also has a separate section for fashion conscious buyers called Fbb. This
marks the uniqueness of Big Bazaar as compared to other top notch traditional
supermarkets which mainly revolve around food, groceries and general merchandise.

CRM IN RETAIL

Their basic attraction associated with reasonable prices is their Unique Selling Price.
It is a massive hit with the lower middle class and middle class people as the major
client base.

4. Why CRM in Retail?

Customer Relationship Management in retail can increase customer satisfaction,

reduce costs and improve company's performance in the marketplace.
In retail industry, CRM is a comprehensive process of acquiring and retaining
customers to create a superior value for the company as well as to the customers. To
meet the expectations of customers by providing personalized, relevant offers and
service is becoming a primary driver of customer satisfaction and retention in retail
business.
A satisfied customer in 10 years will bring 100 more customers to the company.
It costs 5 times more to attract a new customer than to serve an old one.
20% of the companys loyal customers account for 80% of its revenues. (Paretos
principle).
The chances of selling to an existing customer are 1 in 2, the chances of selling to a
new customer are 1 in 16.
Helps to differentiate among the customers on the basis of their sensitivities, tastes,
preferences and personalities, lifestyle and age, culture background and education,
physical and psychological characteristics
Differentiate among the offerings for instance low value customer requiring high
value customer offerings, low value customer with potential to become high value in
near future, high value customer requiring high value service.
Keeping Existing Customer.

5. CRM at Big Bazaar

A successful and effective CRM programmed results in increase of Customers Lifetime
Value for the store. Following are the CRM practices of big bazaar to attract and retain
customers:

Loyalty Payback Card: Any customer can avail this loyalty card for free and can
earn 1 reward point for every Rs. 100 purchased. Customer can then get a voucher for
his reward points accumulated from the Customer Service Desk in the store and get
any item worth that voucher for free.

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Everyday Discount: Big bazaar provides every day discount on each and every
product to customer. Every day price of product does change. It also introduce, if
customer buy more than Rs.999 at one time, customer will get Sugar, Iron box etc.
based on its purchase.

Pay Back of Car Parking Fee: For any amount of purchase done at Big Bazaar
at selected locations, customers can produce the car parking fee receipt and get the
amount paid by the store itself.

Promotional Deals and Offers via Messages: Special offers and promotional
messages sent to customers on their registered mobile numbers on special occasions
like festivals, birthdays, anniversary etc.

Recommendations: Big Bazaar through their feedback forms tries to collect

information like customers shopping experience, limitations in the store if any,
suggestions etc.

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Strategy

Description

Benefits

Reward Point

The loyalty points earned by the customers are

reimbursed any time after minimum specific points

Specific Offers

Exclusive Offers: These are offers designed for the

regular customers to make them come back or may
even be designed to showcase and differentiate
their offerings from that of the competitors.
Differentiated Offers: These are offers which are
linked to behaviour of any particular set of
customers depending upon a mix of their
demographics and previous purchase habits.
External Offers: A retail store offering discount
coupon or some freebie which is connected to a
different brand.

Increases Customer
Satisfaction, Increases
Return on relationships
& Improves Retention
Rate Increases number
of customers, Increases
Competitive advantage
& Improves Revenue per
customer

Services

Car Parking Space: Offering customers space for

car parking is like inviting them with arms wide
open. The reason for this is the increasing
inconvenience customers face to shop on
weekends due to non-availability of parking & the
stores are huge crowd pullers
Smart Card Payment: Stores accept smart card
payment to attract customers of customers who
want to purchase with smart card.
Special Counters: To facilitate and serve the loyal
customers better, stores designate special counters
both for cash and customer service so that the
premium customers can be attended with ease.

Increases Customer
Satisfaction, Increases
Return on relationships
& Increases number of
customers.

Recommendation
s

Customers are invited to provide their suggestions

and recommendations for improvement of their
shopping experience via form filling and on the
counter feedback.

Makes customer feel

important and helps
retailers to find out the
loopholes and take
necessary actions.

CRM IN RETAIL

6. Business Process Architecture:

Business process architecture is a methodology used for identifying and aligning an
organizations key business processes against business requirements. The business
architecture captures what processes are performed in the organization and also provides a
framework that allows IT to map its activities to business processes. This is done by creating
a series of simple, graphical models. These models are deceptively simple so that they are
clear to the people who make the business work, yet, at the same time, capture a quite
complex set of facts about the business.
Once the modelling dimension are identified, they are assembled into a process flow
(How Model) that sequences the activities, establishes the decisions that control branches in
the process, specify who performs each element, which pieces of information are used, where
the work is done, and when it is performed.

7. Process Architecture
In our project we are using the hierarchical process framework to identify the different
process at CRM. This process enables us to capture the business processes and their scope. It
also serves as a framework for defining priorities and scope of subsequent BPM phases.

7.1 Introduction to process

There are three parts of application architecture of CRM:

Operational - automation to the basic business processes (marketing, sales,

service)

Analytical - support to analyse customer behaviour, implements business

intelligence alike technology

Collaborative - ensures the contact with customers (phone, email, fax, web, sms,
post, in person)

Operational CRM
Operational CRM means supporting the "front office" business processes, which include
customer contact (sales, marketing and service). Operational CRM provides the following
benefits:

Delivers personalized and efficient marketing, sales, and service through

multichannel collaboration.
Enables a 360-degree view of your customer while you are interacting with them.
Sales people and service engineers can access complete history of all customer
interaction with your company, regardless of the touch point.

CRM IN RETAIL

Integrates call centres enabling multi-channel personal customer interaction.

Integrates view of the customer while interaction at the transaction level.

Fig. Hierarchical Process Framework

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Level A
In this level all the high level Retail processes are identified.

Level B
The CRM process is selected and group of related business functions and standard end-toend processes are identified and defined.

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Level C
In this level we have decomposed the processes into core processes that combine together to
deliver Service Streams and other end-to-end processes.

Customer
Database

Analysing Data and

Identifying Target
Customers

Contact and
personal
Information

Data mining

History of
purchases

Market Basket
Analysis

Customer
Preferences

Identifying markets
segments

Identifying best
customers

Developing
CRM
Programmes

Programmes for
customer retention

Providing
incentives

Special
customer
services

Add on
selling

Customer Pyramids
Cross
selling

RFM Analysis

Implementing CRM
Programmes

Collaborative
Efforts

Effective Resource
planning

Clearly defined
Objective

Managing change

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8. Process Design

As-is process model:

Analysis of Shopping Cart and Customer Behaviour:

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To Be Process:

9. Process Model Description

1) As per the BPMN Model, the Company will receive the billing information. Once the
billing information is received the customer information is requested from the CRM
database. This information is then checked against the existing CRM database.
2) CRM system will check if customer arrived is a new or existing. If he is a new customer
then the customer details are added in the database and the shopping details are captured,
otherwise existing record is fetched which triggers the CRM process.
3) The current shopping cart of the customer is scanned and the billing information is
updated. The details are then used to analyze customer using following techniques

Data Mining- This technique is used by the company to understand the customer
buying pattern and helps them for decision making.
Market basket analysis- This is a specific type of data analysis that focuses on
composition of basket or products purchased by a customer during a shopping
occasion.

CRM IN RETAIL

Identifying market segments- It helps retailer to adopt specific policy for satisfying
group of customer needs who purchase similar merchandize.
Identifying best Customers- Using information in the customer database retailers can
develop a score or numbers indicating how valuable they are to them. Best customers
are determined byLifetime value- It is the expected contribution from the customer to the retailers
profits over his or her entire relationship with retailer.
Customer pyramid-A commonly used segmentation of customer is using pyramid
Approach. The categorisation of Payback card in Big BazarPlatinum
Gold
Silver
RFM (Recency, Frequency, and Monetary) Analysis- Recency refers how recent a
purchase is made. Frequency means how frequent customer purchases and monetary
refers how much they have bought.

4) After the completion of the CRM process the available offers and discounts are displayed.
If no offers are available then the customer has an option to earn or redeem the payback
points and the invoice is generated otherwise the customer is intimated.
5) The customer has now two choices either to avail the offer or reject the offer. If he rejects
then he has an option to earn or redeem the payback points and the invoice is generated
otherwise the available offer is applied, the bill is updated and the customer can either earn or
redeem the payback points and the invoice is generated.
6) The billing process is completed.

To-be Process model redesign Initiatives:

In addition to the processes mentioned in as-is process model following are the initiatives
taken by the process in to-be problem thereby enhancing the efficiency of the CRM process.

Choice of Upgradation - Once a new customer is added to the database he will be

offered the upgrade in Payback membership. If he rejects the offer then his shopping
details are captured otherwise the available offers after the upgrade are displayed and
the existing As is model is carried out and in addition the upgrade fee will be charged
in the bill.
Special counter for Platinum Payback members- The Platinum Payback card
holders will be preceded to the fast billing counter to avoid the hessels of the
normal billing process.

CRM IN RETAIL
Learning in the subject Vs Finding in the project:

Learning in the subject

Finding in the project

Learnt how a process works (as-is model)

Drew the As-Is model using BPM tools

Learnt the Reengineered process

Drew the To-Be process model using BPM

tools

Learnt identification of core processes

Identified and drew the core process

architecture into a hierarchical model diagram

BPMN s 4 process model elements were read

Elements were used to draw the BPMN

diagram

Learnt to do BPMN modelling on paper

Now have hands on experience with signavio

tool

Difficult to analyse and compare model

Able to analyse ,compare model n work flow

design

Unable to test the workflow model in

theoretical concept

Able to capture, model ,test the design process

Had difficulty in analysing and integrating the

processes.

Practically doing the project gave a closer

insight into analysing and integrating easily

Initially had only an overall idea about the

retails CRM process

Presently have an idea about the various sub

process involved in CRM and the
subcategories with our identified Query
handling process.

CRM IN RETAIL

References and Bibliography:

White Stephen, Introduction to BPMN, IBM

Fundamentals of Business Process Management, Springer.
http://academic.signavio.com/p/login
http://www.oracle.com/us/solutions/index.html
http://www.bigbazaar.com
http://www.crmsearch.com/retail-crm.php
http://www.ruthstevens.com/articles/crm-for-retailers/
http://www.worldwidejournals.com/paripex/file.php?
val=October_2012_1350555754_5fb67_44.pdf (case study).
http://indianresearchjournals.com/pdf/APJMMR/2015/September/2.pdf (case study).
http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG275.html (case
study).

CRM IN RETAIL