Impacts of implementing digital Customer relationships systems on the procurement strategies

Impacts of implementing digital Customer relationships systems on the procurement strategies

Introduction 

In this assessment, there is the analysis of the United Kingdom supermarket industry. The United Kingdom supermarket investing is vast in terms of Economics. The United Kingdom Supermarket industry is having different supermarkets present in the specific industry. To get competitive advantage supermarkets implemented digital customer relationship system to the supermarkets in the United Kingdom. The implementation of this digital platform enables the supermarkets to target the customer in the effective and efficient manner. The forming of the relationship between the customer and the supermarket can be accomplished in an uncomplicated way. There can be positive as well as negative impact of this digital platform implementation in the procurement strategies of Supermarket. Both positive, as well as negative impacts, are discussed in this assessment. The description can be understood well with the deep Insight in this assessment.

Literature Review

As prescribed by Schiraldi, et. al., (2012), there is a different type of Supermarket chains present in the United Kingdom. The sales of Supermarket Chains are dominated by Tesco, Sainsbury, Ads and Morrison. These four are having a market share of 73.2 per cent of the total grocery market of the United Kingdom in the Year 2015. Tesco PLC is the largest Supermarket chain in the United Kingdom. In the present time, the digitalization of everything is accomplished. People are loved to carry electronic devices with them. It is the hobby of the different people to do the digital transaction. In the present time, people used to buy different product and services online. The E-Commerce sector is enhancing its growth in the economy of the world. Supermarkets are also providing grocery products and other items online. The ease of doing business is provided by the United Kingdom government to the supermarket and other industries. This leads to growth and development of the supermarket industry in the United Kingdom.

Positive impacts

Change in customer buying behaviour 

In the words of Lattemann & Robra-Bissant (2017), the Expectations and the demands of the customers have changed because of the implementation of the digital processes in the procurement strategies of the supermarket industry. The customers are more demanding and they require variety in the product and services that are offered by supermarkets. Because of digital procurement strategies customers used to wait for a product to come in the Store. There is a different type of options available in the market. With the implementation of a digital customer relationship system, a customer gets a notification of desired product and service. This helps the customer to know the availability of the particular product and services that the customer wants.

As per the Lemon & Verhoef (2016), there can be the different type of discounts that are provided by the different Supermarket stores of United Kingdom. This discounts can be provided to the customer either online or offline. The information on the discounts is provided to the customer with the help of social media, text messages, emails, and the mobile application of grocery stores. This enables the customer to purchase the particular product and the service in the discount hours. There are different modes of promoting the product to the customer present. Therefore customer can see and know about the product on this different platform. This is the digital relationship that is being formed by the supermarkets of the United Kingdom with the customers. Each and every information about the product and services are provided to the customer at the fingertips of the customer.

Maintaining a competitive edge

According to Peppers & Rogers (2016), with the help of implementation of digital customer relationship system on the procurement strategies of supermarket effective relationships can be built. If the customer purchases a product from a supermarket like Tesco then the different promotional messages of the product and services of Tesco r provided to the customer. This helps the customer to track the product and services by the organisation. According to the need and demand of the customer, purchasing can be done easily by the customer. If the particular customer is Surfing the different type of products and services on the online platform of the supermarket then it is traced. The tracing of the likes and dislikes of the particular customer can be done with the help of such a platform. When the customer again comes on the online platform then the first page always shows the likes and most searched product of the customers. This is done by the supermarkets to target the customers in an effective manner. This helps the supermarket to get a competitive advantage. This helps the customer to become a loyal customer of the supermarket.

Establishing trust among customer by Rapid and reliable responses 

As prescribed by Wilson, et. al., (2012), there are different types of queries which are present with the customers. The different information regarding the product and services offered by the supermarkets are not available in the box of the product. Therefore these queries are necessary to be solved as soon as possible. For this digital customer, relationship system helps customers. The information is provided to the customers in an effective manner by the means of chat process. The Rapid and reliable responses by the executive of a supermarket enable the customer to know about the product and services in a descriptive manner. 

The query about the product and services that are being offered by the supermarket is solved easily with the help of a digital customer relationship system. This helps the easy processing of the procurement in the supermarket (Saarijärvi, et. al., 2013).

24/7 potential income

In the words of Chaffey & Ellis-Chadwick (2012), because of the digital customer relationship system, the customer cares for the particular product and the services at any time. The particular customer needs only the assistance from the supermarket. After providing the assistance to the particular customer then the purchasing can be accomplished by the particular customer. This is the advantage that is being provided to the supermarket because of the implementation of a digital customer relationship system.

Saving in the operational cost

Maintaining a customer relationship in the office is quite time-consuming and cost consuming. The digital system is involved in the cost-saving process and time-saving process in the operation of customer relationship in the industry of Supermarket. The officers have to be set up at the different location as the customer base of the different Supermarket is present everywhere. The cost of locating and forming such office need the high amount of money (Parise, et. al., 2016). This cost is saved with the help of a digital customer relationship system. Therefore it can be said that the business expenses in the digital customer relationship are low as compared to the physical stores or office.

International customers

The international customers can be played with the help of a digital customer relationship system. The targeting of these type of customer can be accomplished in the effective and efficient manner. The cost of targeting such type of customer is low with the help of this means. This can be very beneficial for the supermarket to enhance their profit as well as revenue (Rawson, et. al., 2013). The international presence will become more for such type of supermarket. This will be helpful in the Business expansion of the supermarket in the United Kingdom.

Personalised online experience

The employees of the digital customer relationship system can help the customer to make a personalized account of the customer. The choices of the customer can you present in this personalized account (Klaus, 2014). This is helpful to the customer to buy the product at the time of availability of the funds with the customer. The products can be shortlisted before and the product can be purchased when the customer wishes to purchase.

Affordable employees

In the words of Klaus (2014), in the offline physical store of customer relationship management, there is a need for more stuff as compared to digital customer relationship system. Therefore it can be said that digital customer relationship is more affordable for the supermarkets in terms of affording a salary to the employee. Less number of employees is required helps in saving the cost that can be wasted in distributing salary to a large number of employees.

Encourage impulse

The frequent transactions dates can be traced by the digital customer relationship system. On such dates in every month customers are targeted. The different promotional voucher is provided to the customer automatically by the digital customer relationship system. The customer uses a promotional code to get a discount on the particular product that is like to buy the customer (Blázquez, 2014). Then the particular customer used to avail the discount whether online or offline. In this way encouragement of the impulse in the customer can be done by the digital customer relationship system.

Able to process a number of order

The processing of the order can be done in high amount as compared to the previous customer relationship system in the supermarket industry. The digital system enables the supermarket to get the orders online. And the orders come in the queue of the supermarket. The date is allotted to the particular customers according to the availability of the particular product (Kumar & Reinartz, 2018). The customer need not have to rush into the supermarket and purchase the product. They can easily order the product online. In this way, it is enhancing the profit and revenue of supermarkets in the United Kingdom.

Business growth

Growth in the business can be accomplished with the help of is the digital system. This will lead to the expansion of the business in the different countries also (Blázquez, 2014). The new investment can be done that will be helpful in creating a large number of revenue and a good return on investment for the supermarkets.

Effective Purchasing module

The digital platform provides effective purchasing module to the customer. It provides the great experience to the customer. The identification of the potential customers can be accomplished by this platform in an easy manner. The process of procurement and delivery of the goods can be easy. The whole supply chain management becomes effective in nature because of a digital platform of customer relations (Trainor, et. al., 2014).

Sales, prospecting and marketing

With the implementation of a digital platform of customer relationship sales prospecting and marketing can be accomplished in the efficient and effective manner. This can be helpful for the businesses that are in supermarkets (Choudhury & Harrigan, 2014). It is very necessary that sales should be good to run a business. The ease can be provided to the business with the help of this digital platform. Maintaining a good relationship with the customer is resulting in good sales for the supermarket. The targeted population can be used for marketing purpose of the supermarket. The promotion of the product and the services that are provided by the supermarket can be done with the help of targeting the population (Kumar & Reinartz, 2018).

Less requirement of senior management

In the digital platform of a customer relationship, different working in functioning can be done by the executive employees of the organisation. The different task can be done by the single employee. The processing of the request from the customer can be done in an easy manner with the help of a digital platform. Therefore fewer teams are required in all for maintaining digital customer relationship system as compared to the offline physical Store (Nguyen & Mutum,  2012). Therefore less requirement of senior management will be there. This will be helpful for the senior management to involve in the other operations of Supermarket that can provide benefit to the supermarket in terms of growth and development.

Negative impacts

System crash

There can be a situation in which the system can be crash. In the situation, the customer has to face a different type of difficulty while contacting the customer relationship executive. The customer may have to wait a long until the customer relationship system repaired (Nguyen & Mutum,  2012). Therefore it is very necessary to maintain the digital customer relationship system by the supermarkets of the United Kingdom. There can be the situation in which the frequent crashing of the digital system can be there for the supermarket. In this situation dissatisfaction among the customer can be there. This will lead to the creation of a bad image in the mind of customers about the supermarket. In this situation, the customer is not able to purchase the product and the services that are offered by the supermarket. This is leading to create a loss to the supermarket like Tesco PLC.

High competition

 Implementation of a digital customer relationship system in the supermarkets of United Kingdom leads to high competition. The effective targeting of the customer can be done by any of the supermarket (Wang & Feng, 2012). This is creating a competitive environment in this industry. Providing different offers by the different supermarkets to the customer is usually in trend in this industry. Customers are always in search of offers that are provided by the different supermarkets to them. Customer seeks a different type of discounts that can be available in the different supermarkets. The customer relationship digital platform used to provide the information on the discount to the customer by the means of emails, social media platforms and messages. This overall is creating a high competition in the field of a supermarket in the United Kingdom.

The customer can be impatient

According to Johnston & Jeffrey (2012), there might be the situation in which the customer can be impatient while getting the response from the digital customer relationship system. This can be possible when the customer is not getting the proper result which customer is demanding from the supermarket. There can be the situation in which a digital customer relationship system is not able to satisfy the particular customer according to the demand and needs of the customer (Wang & Feng, 2012). In this situation impatience of the customer can be in the situation. This will create dissatisfaction with the customer. the given the situation in which the particular customer will leave the particular supermarket for always and never come back to purchase from a particular Supermarket. In this situation, there can be a loss that can be created for the supermarket.

Unemployment

As prescribed by Goddard et. al., (2012), the digital customer relationship system is creating unemployment. The different processes can be accomplished on the digital platform. This results in consuming the employment of the individuals. This results in the creation of unemployment. This can also affect the economy of the United Kingdom.

Privacy of the customer

According to Padmavathy, et. al., (2012), the privacy of the different type of customer is at risk with the digital platform of the customer relationship. All the important and personal information of the customer is with a digital platform. Even the annual income of the particular person is provided by the customer to this platform will be saved in the database. This can be used by any employee for the wrong purposes. The important information can also leak. Therefore it can be said that the privacy of the particular individual is at risk because of this digital system.

Security

There used to be the situation in which the online transactions failures are common. The failure of the transaction leads to dissatisfaction among the customers and sense of insecurity comes in customers. The failed amount comes in the account of the customer after 15 working days or more. The customer has to wait a long for money to return to the account (Zeynep Ata & Toker, 2012). This is the negative impact of this digital system of the customer relationship.

Price Wars

As prescribed by Muther (2012), with the fair competition there is also an unfair competition that is created because of this digital platform. Every Supermarket wants to attract a good number of customers. Targeting the customers is easy with the digital platform. Making the relationship with the customers is easy with the help of a digital platform. In this way, the customer can be targeted easily with the lowered price of the product that the customer wants to buy. This results in the creation of price Wars between the supermarkets of the United Kingdom. This affects the profit of the supermarkets also. This is that is only acquired by the supermarket to attract and get the customer. In this way price wars are creating a negative impact on the supermarket industry. This price is created because of the implementation of a digital customer relationship system in procurement strategies of the supermarket.

Conclusion

It can be concluded that there are positive as well as negative impact of implementation of digital customer relationship system in the procurement strategy of the supermarket. The United Kingdom Supermarket industry is going through a great competition in the big four supermarkets present in the United Kingdom. Does digital platform has created an opportunity for other supermarkets to compete with main supermarkets of the United Kingdom? This enables the supermarkets to target the customers in the effective and efficient manner. This is helping the supermarket to get high profits and revenues. This leads to growth and development of the supermarkets in the United Kingdom. There is also the burden of unemployment on the economy of the United Kingdom because of this digital platform. Price is creating a great disturbance in the economic and industrial situation of the United Kingdom.

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