02 harrodsv [e doc_find.com]

How Harrods Understands, Anticipates and Inspires
its Customers

“Anything is Possible…”

David Llamas, Harrods

AGENDA
Introduction to Harrods

The Harrods Challenge

Harrods Information Systems Strategic Alignment

Customer Centric Initiatives

Empowering the Future

Lessons Learnt

The Harrods Challenge
RETAIL BUSINESS OUTLOOK OF 2002

RETAIL Issues
 Thin margins
 Competitive pressure RETAIL HARRODS
 Building loyal customers DRIVERS DRIVERS
 Multi-channel offering ANYTHING IS
HARRODS Issues POSSIBLE
 Product and process diversification
 Ultimate customer service
 Limited geographical expansion PROCESS
 Online opportunities for a Global Brand ISSUES

PROCESS Issues
 Business processes were slow and inefficient constraining the business scalability
 Systems were highly unreliable causing business disruption
 Information quality was poor and limited


PHASE 1 Overhaul of legacy systems – 4 years

Guarantee availability and reliability of service
 Improve IT Service Levels
 Infrastructure Refresh

PHASE 1 – Service Levels
2003 2004 2005 2006 2007 2008


PHASE 2 Back-office & front-office consolidation program – 4 years

Support scalability;
Improve productivity & control operating costs
 Operational Efficiencies
 IT Solutions Simplification Process
Simplification
Productivity
Cost Control
Scalability

PHASE 2 – Operational Excellence
2003 2004 2005 2006 2007 2008


PHASE 3 Introduction of a Flexible Multi-channel IT architecture – 2 years

Sustainable growth on multi-channel initiatives
 Provide a Flexible and Agile Systems Infrastructure

PHASE 3 – Flexibility & Agility
2003 2004 2005 2006 2007 2008


PHASE 4 Move from traditional reporting to the predictive enterprise – 3 years

Improve profitability and availability of product
Increase customer spend and optimize marketing expenditure
 Business Decision Making Optimization

PHASE 4 – Strategy Focused
PHASE 3 – Flexibility & Agility
2003 2004 2005 2006 2007 2008

The Harrods Customer Challenge

UNDERSTAND Our Customers
 Who are Our Customers?
 What, When, How, Why do they shop with us?


ANTICIPATE Our Customers
 What can we do to ensure that our customers are retained?
 How can similar customers be attracted?
 How can the overall customer profitability be improved?
 How can the right customers be targeted at the right time with the most
appealing merchandise and marketing strategies?


INSPIRE Our Customers
 Enhance the customer shopping experience and exceed their expectations

Customer Centric Strategies

Customer Information Management
 Data Quality issues… Recognize your Customer!
 How do we provide a UNIFIED Brand Experience across all
Channels… Information sharing
 Customer contact Strategy

Harrods Customer Segmentation
 What type of customers do we have?
 What are their preferences and shopping behaviors?

A more Personalised Customer Shopping Experience
 Harrods by invitation and personal shopping
 Clienteling
 Harrods Rewards Program

Single Customer View is a pre-step to a robust multi-channel retail CRM
architecture… “Having a database of customer records is just data, having a
clean and accurate database of customer records is INFORMATION”


Harrods Single Customer View Solution

Multiple
Channels

In-Store Call Centre Internet Customer Service Loyalty Station

Enterprise Service Bus

Data Management

Confirm Conform Compose Link

Data Analysis

Customer Centric Strategies Segment Distribution

Customer Groups 5.7%
6.4% Q
0.7%
UK Spenders
Jet-Set Elite 6.4%
33.6%
Q Quality-Seekers 4.6%

Bargain-Hunting Homemakers 6.1%
Wishful or Wistful
Teddies and Treats 0.6%

36.0%
UK Non Spenders
Share of Spend by Segment
 International 60%
Segment Size
50%
Middle East Customers % age of Spend
40%
Rest of World Customers
30%
Staff 20%

10%

0%

Q


Desired Positions
Current
12

Staff
10
Jet-Set Elite
Number of Visit in 6 Months

8

6 Wishful or Wistful
Bargain Hunting
4 Homemakers Quality Seekers

2
Q
Teddies Middle East
& Treats
0
Rest of World
-2 UK Non-Spenders
-£200 £100 £0 £100 £200 £300 £400 £500 £600 £700 £800 £900 £1,000
Average Spend per Visit

Harrods Rewards Program
One-to-one servicing
Tailored Products & Services
Black (By Appointment / Personal Shopping Services) Clienteling
Retain Most
Valued
Direct Mail / Clienteling
Customers
Exclusive invitations to store events
Gold

55% of sales are
(Introduce to “By Appointment”)

Product
Direct Mail CRM
Demographics System generated target offers Develop
Green

loyalty card based
(Sales Assc. / Rewards team) Customer
Behavioural
Relationships
Propensity modelling
Cross-Sell Analysis
Customer metrics
Retention Analysis Single Customer View Campaign results

Black Forecast reports

Prospect Pool Data Sources
Gold
Data quality
Rules / Prioritization Flexible design
Green
Analysis / Segmentation / Modeling Scalable architecture
Systems integration
Single Customer View / Marketing Analytics Data enrichment


Rewards Program & Customer Segmentation Alignment

Tier Codes by Segment

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q
Jet-Set Quality Bargain Wishful or Teddies UK Non- Middle Rest of Staff
Elite Seekers Hunting Wistful & Treats Spenders East World
Homemakers

Segment

Green 0 Green 1 Green 2 Gold Black Elite

Empowering the Future

PRODUCT Centric Initiatives
 Selection
 Availability
 Profitability

Workforce Optimization Initiatives
 Task Scheduling
 Staff Scheduling

CORPORATE PERFORMANCE Management Optimization
 Continuous Improvement

Lessons Learnt

 Get your Processes and Information Quality Right

 Evolution and not Revolution

 Do not Underestimate Change Management

 Continuously Evaluate your Strategic Partnerships

David Llamas
CIO
Harrods Ltd

david.llamas@harrods.com

02 harrodsv [e doc_find.com]

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