WASHINGTON, DC, Mar 8, 2006 / – The latest Customer Centricity Study, conducted by Ogden Associates for the NRF Foundation, shows just how important the customer really is to retailers. Among the findings, more and more retailers are utilizing customer data (customer insight) to improve marketing programs and merchandise offerings – a fundamental yet often elusive goal of retailers’ customer relationship management (CRM) programs.

In perhaps the clearest indication of retailer commitment to customer knowledge-driven strategies, 65% of retailers in this latest survey say their technology expenditures for CRM will increase this year.

The Customer Centricity Study found overwhelming support among retailers for strategies that improve the customer experience. Nearly 98% of the respondents said that improving the customer experience was important, while another 97% cited that increasing customer satisfaction was a priority.

In pursuing these objectives, retailers have also made major progress in seeking and responding to direct input from customers by probing for better understanding of customers’ lifestyles and life stages. The survey finds that retailers are deploying a wide variety of techniques to build customer understanding including market and customer research, focus groups, store intercepts, supplier input, web statistics, third-party data and Internet research.

The study also showed that retailers really are listening these days, with over 35% of them obtaining direct customer feedback on a daily basis – a notable increase from 2004 where just under 10% of retailers obtained weekly customer feedback.

“For years retailers have been seeking new, more personalized and relevant, ways to connect with and serve their customers,” said Janet Murphy, President, Ogden Associates. “Although much more remains to be done, we’re seeing a breakthrough now, with more retailers actually utilizing hard-won business intelligence to improve communications with customers, and tailor merchandise offerings and services more closely to customers’ needs and desires.”

Reflecting a major shift toward more strategic use of information, 67% of respondents this year say they used customer information for Merchandise Planning, up significantly from 42% of respondents in 2004. Retailers also see customer insight as important in developing marketing strategies (92%), advertising budgets (69%), catalogue targeting (67%), promotions (83%) and of course customer service (78%).

“In this business, pleasing the customer means everything,” said Mike Gatti, RAMA Executive Vice President. “Retailers clearly recognize the significance of developing relationships, evaluating customer feedback, and ultimately improving the overall retail experience for the consumer and boosting their own sales.”

In spite of these advances, the Customer Centricity Study also shows that retailers are still not achieving the return on investment they seek from customer knowledge-driven strategies and techniques; 60 percent cite lack of proven ROI as an obstacle to the program. Throughout the study there is evidence that retailers still have much more to accomplish in improving their processes and organizational alignment. Only 44 percent of retailers have tackled this piece, although the study does predict that this will be a major focus of activity over the next couple of years.

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