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CRM in Practice: Virgin Megastores

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18th Sep 2006
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Virgin Megastores is one of the most familiar names on the UK high street. Part of the global Virgin empire, the firm has 126 stores throughout the UK and Ireland. It’s reckoned that over 10 million customers shop with Virgin each year.

The first Virgin record store opened in London's Oxford Street in 1971 and in 1979 the company took over the site at the end of Oxford Street and Tottenham Court Road for its flagship Megastore. This shop alone sells around 7,000 CDs per worldwide it's estimated that over 1 million people shop with Virgin Megastores each day.

That's a lot of customers to manage, particularly in a market when the threat of online music downloads encroaches ever closer. Virgin's rival HMV has been the subject of intense speculation after seeing its sales drop off as a result of online competition from the likes of iTunes or emusic.com.

In some respects, the retail music and entertainment sector is as vulnerable to a form of customer churn as the telco and mobile phone markets. So maximising return on customers is vital as is being able to retain existing customers. This requires that most elusive of CRM holy grails – the single view of the customer.

"We needed something that would give us that single customer view,"notes CRM manager Suzanne Jiggens. "We needed to bring togther different data from different sources and produce it for us in a way that we could work with. It is the single customer view. That would then give us the flexibility to develop as we wanted. We can tailor communications specifically to customers. When a customer receives a communication from us they will know that it is something that they want to receive.

As CRM manager for such a potent high street name, Jiggens is aware of the challenges of competing in the current retail climate and the enabling role that well-deployed CRM can play in increasing commercial competitiveness.

"One of the biggest challenges that we have as an organisation is that we have a variety of customer engagements," she explains. It's a challenge to capture all that information from those various engagements and seeing the complete picture that results. For example, the engagement may be store based or online. Customers can shop with us in a variety of different ways and our customer management needs to appreciate this."

While individual business units within the Virgin Group use their own choices of CRM package, Virgin Megastores has recently deployed Neolane in a bid to to create personalised, targeted, customer-centric communications with the aim of boosting customer loyalty.

Virgin Megastores went live on Neolane V4 in mid-August following a selection process ending in June. Messages to customers can now be personalised in content and highly relevant to each individual, not just a generic marketing pitch aimed at the widest possible constituency.

The new software is also allowing Virgin Megastores to run its online and offline campaigns itself, rather than outsource them.

Neolane UK and its partners will handle the consolidation of customer data from multiple sources across the retailer. They will also support the solution with an ongoing data quality foundation to ensure unified, clean and complete customer views.

Of course the retail sector has been one that has been stongly identified by various industry analyst firms as being a potentially hot spot for CRM firms and as such most of the larger companies have developed their own vertical application to target the sector.

"We did speak to a lot of different companies," recalls Jiggens. "We looked at a lot of different products and to be honest there were a lot of companies out there that could have delivered a good system for us. But what we wanted going forward was something that allowed us to tap into our own expertise and allowed us to develop into what we decided we needed to have. This system that we now have allows us to develop it and take it into new areas."

Future plans include incorporating Electronic Point of Sale transactional retail data from users of its new student discount card, which was launched this month. This will enable even greater degrees of customer segmentation and purchase insight.

 

Suzanne Jiggens has over six years experience working in direct marketing and CRM roles for Freemans Catalogue, GE Capital and HSBC. She joined Virgin Retail in July this year to develop customer-led CRM strategies and to manage the implementation of supporting systems, software and services.

 

Virgin Megastores is the high street outlet of Virgin Group, headed by the high-profile entrepeneur Sir Richard Branson.

The Virgin Megastores sell CDs, DVDs, video games, books and other entertainment products. Larger Virgin Megastores hold more than 300,000 CDs, as well as some of the largest stocks of DVDs, video games and other items.

 

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