Improved Customer Relationship Management in the Fashion Industry - Essay Example

Improved Relationship Management in the Fashion Industry Table of content oriented marketing; a modified version of relationship marketing is one of the most widely used marketing tools. Its role becomes all the more intensified in the fashion industry which makes it imperative for the organisation to identify the nuances of customer relationship and develop their marketing strategies accordingly. The present report is an attempt to study the importance of customer relationship in the context of fashion industry. While doing so different organisation with different national affiliation involved in fashion business have been taken into consideration. Information technology has accelerated the evolutionary phase of customer relationship. Many CRM software and information systems are available today which can be used for capturing and storing potential customer data which help organizations in developing and maintaining customer relationship. This report is an attempt to provide comprehensive information on technologies used by the present day organizations for maintaining a healthy relationship with their potential customers. Supply chain has also supported organizations in improving their relationship building activities with their customers. Introduction to Customer Relationship Management (CRM) Customer Relationship Management (CRM) is a comprehensive approach adopted by organizations in order to create, maintain, and expand their customer base. It has become an essential part of every organization and seeks participation from all of the departments of that organization. It should be noted the process of customer base development of an organization is not dependent on any specific department. Instead it is a strategy which must be followed by all of the departments while developing their departmental plans. It is not solely related to the IT department of the organization neither it is an activity performed by the sales and marketing team (Anderson & Kerr, 2002). Present day business situation has forced organizations to revamp their traditional approaches so as to meet their target revenue and sales volume. High level of competition has become an issue not only for international level organizations but also for the organizations operating in the national and domestic markets. Organizations are required to use smarter techniques for identifying and retaining their customers. This has also made it necessary for the present day organizations to analyze their offerings and identify their targeted customers. The latter is considered as the key to success as it increases the of the productivity and revenue generation of the organisation. (Dyché, 2002). Technological innovation has enabled organizations to successfully adopt CRM approaches. This has enhanced the decision making capability of the organization (Rajola, 2003). However as discussed above CRM approaches also demand efforts at the organizational level where all the departments of the organization must be involved. Current Marketing Trends in Fashion Industry According to Perna (1987); Fashion can be defined as the expression of different times. It is the essence which gets reflected in the lifestyle of people living in a society and is defined by the social status of that particular system. Certain things which are more prominently used than others are often referred as examples of fashion. Most of the luxurious goods such as cell phones, clothing, vehicles, etc are often referred as objects of fashion. Therefore business organizations involved in fashion industry are more concerned with designing, producing, promoting, and selling those products and services which are demanding and dominating the market. Clothing and dressing materials have always served as the most common way of expressing the current trend in fashion. According to Barnard (2001); Clothing is a medium through which people can attain both social status and individuality, thus meeting the balance required to be maintained between the set of complex needs (Hines & Bruce, 2007). Retailing of clothing material is the prime business for most organizations involved in fashion industry. Initially the retailing activities were performed at domestic level but with the global advent of Western dressing culture, the retailing began at the international level with numerous competitors battling for a larger market share. However foreign retailing activities are very low in proportion when compared to the total retailers present within a nation or a region. Majority of the retailers are found to be more inclined to domestic level business. To increase the proportion of foreign retailers’, organizations such as H&M, The Gap, Gucci, Zara, Mango, and Top-Shop have expanded their business at international level (Bruce et al., 2004). International level fashion industry is a highly complex one with extensive involvement of international marketing concepts. Various approaches are adopted by fashion organizations to serve their customers beyond the national boundaries. Approaches adopted for international marketing include, casual export to the formation of multinationals and enterprises by the organizations. The level of efforts made on exporting activities indicates the approach adopted by the organizations for international level operation. Large exporters which have overseas presence either emphasize on export activities exclusively through huge capital investment or offer franchise opportunity to local business entities. Forming joint ventures has also helped many organizations to expand their overseas business operations (Bohdanowicz & Clamp, 1994). The basic criterion of fashion industry is to identify the potential customers and develop long term relationship with them by making them loyal to the brands offered by them. Strategic approaches towards marketing practices Strategic approaches, adopted by the organisations of the fashion industry, mainly concentrate on the marketing activities so as to win their customers’ confidence and build their brand image in the market. Adopting fast fashion is addressed as one of the successful strategies adopted by large retailing brands such as Zara, Benetton, and many more. To expand their offering these retailers renew their products at regular interval of time. This continual renewal process is carried out according to the choices and demands of the present generation. Organizations try to develop their products in a unique way so as to gain maximum attention from the media and public which will help them to promote their products more easily. Presently the demand of customers has become so intellectual and versatile that organizations are clubbing product variation with designer wears to win the international market effectively. (Greenwood, 2006). Organizations are required to identify the basic ideas that go behind forming a trend or fashion. The basic ideas include the process through which the changes are taking place which originates from the development of new products. (Vejlgaard, 2007).Organizations must be able to identify the changes which are taking place in the requirements and expectations of their customers. These identification processes are performed by establishing long term relationship with customers and identifying their behaviour towards a particular product or service offered by the organizations. The pattern displayed by the customer group helps organizations in identifying the changes which are taking place in the requirements of the customers. The response thus obtained will assist the organizations to incorporate features in their products and services so as to meet the expectations of the current customer group. Luxury goods and services which remain in fashion generally possess all the qualities that make them attractive to a large number of customers. Fashion industry uses luxury and fashion interchangeably to promote its products. According to Jackson (2004) many fashion designers have contributed significantly to the promotion of luxury brands through their association with it, while Chanel & Laurent have advocated that people perceive many luxury brands as fashionable only when versatile and diverse range of products are offered by the brands. Both of the situations are true in case of many large brands such as Gucci and John Galliano which are supposed to be luxurious as well as fashionable (Hines & Bruce, 2007). Luxurious impression of these brands could be the result of their diverse product range or it could be the influences made by the designers on the perception of customers. Importance of customer relationship in Fashion Industry Customer relationship is an important part of contemporary business. It is not only necessary for the fashion industry rather it is required in all types of businesses where customer relationship is involved. Customer relationship is concerned with three basic attributes; trust, commitment, and loyalty. These virtues should be displayed from both the sides, i.e. from customer and the seller. The traditional marketing approach did not take the above mentioned factors into account. However with the change in the consumer behavior it has been identified that relationship marketing is becoming more responsible for influencing the decision of the consumers. Relationship building is considered as an important part of the strategy development for the organizations to win the confidence of its target customers. Developing relationship with consumers requires efforts from both the parties. If the consumer is satisfied it approaches the organization again and again for the same product. At this point it becomes essential for the organization to satisfy its old customers and meet their expectations. By doing this the organization succeeds in gaining the confidence of its customers which helps them to develop trust and commitment between each other. The factors such a trust, commitment and loyalty can be developed by the organizations by bestowing appropriate values and benefit associated to the products and services offered by the organizations to its customers. In the context of fashion industry the above mentioned responsibility becomes all the more important. Therefore they keep offering new products since fashion industry involves artistic and creative approaches towards their product development. The products and services offered by fashion organizations should be always new and updated. Fashion industry demands greater innovation and novelty which must reflect in their products and satisfy their customer. From this perspective it is evident that fashion industry must blend of artistic vision, creativity, and strategic management to maintain long term relationship with their customers (Antar & Gholamifar, 2006). Better practices of relationship marketing have helped fashion organizations to survive for a longer time in the market and expand their business beyond their national boundaries. Internationalization of fashion brands became a reality when the organizations realized the short life-span of their products. People have shown interest for short lived products or services offered by fashion organizations after which the products or services become outdated or old fashioned. Considering this fact organizations keep observing and updating their products and services as per the demands of the customers. The products and services offered by fashion industry face very high level of competition in a very short life-span, so organizations which have better customer relationship and reputation in the market receive maximum benefits. Approaching the customers with a brand name for helps organizations in gaining more customers. In this sense branding is a pre-requisite for developing better customer relationships which also influences the buying decision of the consumers (Mascareigne & Bernardzon, 2008). Fashionable products and services must be advertised in such a way that it gains rapid recognition among its consumers which in turn helps the products and services to become fashionable in real terms. Through effective customer relationship, organizations can have better market reaching ability to promote their products and services. This also indicates that for fashion industry customer relationship is the ultimate key to success. Role of CRM in Fashion Industry Present day customers are very much concerned about the companies whose products and services they avail. Traditional marketing practices directed organizations to approach their customers for marketing their products and services but present day situation has changed, it has become more dynamic. Customers and organizations interact through communication channels which have become vaster and have increased the organization’s options of reaching their customers (Almor et al., 2002). Another significant change observed in the customer-organization relationship is that the control over the relationship has shifted to the customers’ side. Customers are now controlling the way through which organizations could approach them. Customers enquire about the various products and services through different sources when they feel the need of doing so. As far as the enquiry process is concerned customers have higher faith over the external sources than the company’s own data. Internet technology has empowered the customers to have access to numerous sources of information through which they can gain information. Fashion organizations are required to be more conscious about the dynamic nature of the newly developed communication channel. Organizations are required to be more focused on the customers’ feedback which serves as the source of information for the enquiring consumers. So organizations are required to keep their present customers satisfied because low satisfaction level delivered by the products and services could hamper their future business prospects. With the increasing importance of improved communication channel to reach the customers, organizations are trying to equip themselves with the latest technological innovation offered by several IT products to perform the information management tasks of the organizations. Companies like Oracle, Teradata, SAS, etc. have brought these software products in the market which are used by the client organizations to maintain relationship with their potential customers and store data pertaining to them. These systems have also helped the organizations in building relationship with their suppliers as well, who are also considered as a critical part of the fashion industry. The dynamic nature of the business world and customers’ requirements has forced organizations to be in regular touch with their suppliers who provides them with raw materials needed to produce the final product to be offered by the organizations (Raab, Feb 2010). With the help of e-customer relationship management systems, organizations can have better control over the issues such as rapidly growing industry, continuously changing market demands, and increasing level of customer demands. The electronically handled customer relationship management systems also support organizations in strengthening their customer relationship by automating their activities such as sales and marketing, customer servicing, engineering and quality assurance functioning which are observed across the organization. Offering self-service to the customers provides them with easy access of information related to any product or service. Customers are also offered assistance while placing and cancelling the orders and also while checking the current status of their orders at flexible times (Dhanabhakyam & Sureshkumar, n.d.). Supply chain supporting customer relationship Adopting technological approaches such as RFID (Radio Frequency Identification) technology helps organizations to improve their supply chain which helps them in forecasting the requirements of the resources as well as their size of inventory (Myerson, 2007). By achieving efficient supply chain, organizations will not only be able to meet the demand and supply balance but will also be able to control their wastages. This also helps them in satisfying their customers and developing a strong relationship with them which is the basic purpose of customer relationship management. Some other supply chain techniques used by organizations are quality management and ‘just in time’ approaches. These are also helpful in improving their customer service and relationships. JIT helps in reducing the lead time of the organization in meeting the orders placed by it. It also helps them in meeting the lead time as per their quotation made to the customers. JIT strategy also brings stability in the lead times of the organizations (Rhodes et al., 2006). CRM approaches are beneficial for all types of businesses, irrespective of their types and size. The benefit of CRM is that helps an organization to achieve its desired targets because customers are the sole factor for success of an organization. Present day customers are more demanding and to meet their demands organizations are required to adopt customer oriented marketing strategies. Better CRM practices could also help organizations to face the economic downturn and reduce its impact on the financial condition of the organization (IBM-website, n.d.). Organizational approaches to improve customer relationship Many organizations have adopted several approaches to improve their relationship with customers as per their capabilities to invest in their improvement methodologies. Large fashion organizations such as Topshop and Zara, which have their operations in many European nations, have adopted numerous strategies to win their customers’ faith. They have adopted different strategies to attract maximum customers and have deduced methodologies to retain them. Topshop has its operations across the United Kingdom and several other regions where it has tried to provide better customer experience to its customers through membership cards for loyal customers and style advisors to convey the latest style to their valuable customers (Topshop, n.d.). H&M is one such organization which is involved in fashion industry and serves its customer in the most effective way. It offers a wide range of quality products for all age groups and maintains their quality as well (H&M, n.d.). GUCCI also has its brand name in fashion industry which it has gained by serving its customers from a long time without compromising on the quality of the products (GUCCI, n.d.). The company has maintained its brand in the global market with the help of better CRM approaches Conclusion Organizations adopting effective CRM approaches require a joint effort made at the organizational level irrespective of the departments of the organization. It is same in the context of fashion industry where changes are very frequent and versatile. So it has become imperative for the organizations involved in the fashion business to keep a tab of changes taking place in the consumers’ behavior. A proper analysis of customer behavior will help the organizations to develop along lasting relationship with their customers. Apart from consumer behavior improved supply chain also helps to fill the gap between the customer satisfaction and products offered by organizations. Through better supply chain, organizations can have better operational and production activities which support them in materializing their promises made to the customer group. Branding also plays a pivotal role in setting the trends of the organization. Reference Anderson, K. & Kerr, C. 2002. Customer relationship management. McGraw-Hill Professional. Antar, J. & Gholamifar, D. June, 2006. CRM in Fashion Companies for men’s wear. [Online] Available at: http://hj.diva-portal.org/smash/get/diva2:4186/FULLTEXT01 [Accessed on March 3, 2010], Almor et al. 2002. A Journal of Complexity Issues in Organizations and Management- a publication of The Institute for the Study of Coherence and Emergence. [Online] Available at: http://www.econ.tuwien.ac.at/hanappi/E_CO/Vol_4_4/Emergence%204_4.pdf#page=41 [Accessed on March 3, 2010]. 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