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How Harrods Understands, Anticipates and Inspires
its Customers
“Anything is Possible…”
David Llamas, Harrods
Introduction to Harrods
The Harrods Challenge
Harrods Information Systems Strategic Alignment
Customer Centric Initiatives
Empowering the Future
Lessons Learnt
AGENDA
RETAIL BUSINESS OUTLOOK OF 2002
RETAIL Issues
Thin margins
Competitive pressure
Building loyal customers
Multi-channel offering
HARRODS Issues
Product and process diversification
Ultimate customer service
Limited geographical expansion
Online opportunities for a Global Brand
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
The Harrods Challenge
ANYTHING IS
POSSIBLE
HARRODSDRIVERS
RETAILDRIVERS
PROCESSISSUES
Harrods Information Systems Strategic Alignment
Guarantee availability and reliability of service
Improve IT Service Levels
Infrastructure Refresh
PHASE 1 Overhaul of legacy systems – 4 years
PHASE 1 – Service Levels
2003 2004 2005 2006 2007 2008
Harrods Information Systems Strategic Alignment
Support scalability;
Improve productivity & control operating costs
Operational Efficiencies
IT Solutions Simplification
PHASE 2 Back-office & front-office consolidation program – 4 years
Process
Simplification
Productivity
Cost Control
Scalability
2003 2004 2005 2006 2007 2008
PHASE 2 – Operational Excellence
PHASE 1 – Service Levels
Harrods Information Systems Strategic Alignment
Sustainable growth on multi-channel initiatives
Provide a Flexible and Agile Systems Infrastructure
PHASE 3 Introduction of a Flexible Multi-channel IT architecture – 2 years
PHASE 3 – Flexibility & Agility
2003 2004 2005 2006 2007 2008
PHASE 2 – Operational Excellence
PHASE 1 – Service Levels
Harrods Information Systems Strategic Alignment
Improve profitability and availability of product
Increase customer spend and optimize marketing expenditure
Business Decision Making Optimization
PHASE 4 Move from traditional reporting to the predictive enterprise – 3 years
PHASE 4 – Strategy Focused
2003 2004 2005 2006 2007 2008
PHASE 3 – Flexibility & Agility
PHASE 1 – Service Levels
PHASE 2 – Operational Excellence
AGENDA
Introduction to Harrods
The Harrods Challenge
Harrods Information Systems Strategic Alignment
Customer Centric Initiatives
Empowering the Future
Lessons Learnt
“Anything is Possible…”
The Harrods Customer Challenge
UNDERSTAND Our Customers
Who are Our Customers?
What, When, How, Why do they shop with us?
The Harrods Customer Challenge
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?
The Harrods Customer Challenge
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
Customer Centric Strategies
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”
Data Analysis
Customer Centric Strategies
Harrods Single Customer View Solution
Multiple
Channels
In-Store Call Centre Internet Customer Service Loyalty Station
Enterprise Service Bus
Data Management
Confirm LinkConform Compose
Customer Centric Strategies
Customer Groups
UK Spenders
Jet-Set Elite
Quality-Seekers
Bargain-Hunting Homemakers
Wishful or Wistful
Teddies and Treats
UK Non Spenders
International
Middle East Customers
Rest of World Customers
Staff
Q
Share of Spend by Segment
0%
10%
20%
30%
40%
50%
60%
Segment Size
% age of Spend
Q
Segment Distribution
0.7%6.4%
6.4%
4.6%
6.1%
36.0%
0.6%
33.6%
5.7%Q
Current Positions Desired Positions
Customer Centric Strategies
Nu
mb
er
of
Vis
it in
6 M
on
ths
Average Spend per Visit
-£200 £100 £0 £100 £200 £300 £400 £500 £600 £700 £800 £900 £1,000
12
10
8
6
4
2
0
-2
Customer Centric Strategies
Middle East
Rest of World
UK Non-Spenders
Staff
Wishful or Wistful
Teddies
& Treats
Bargain Hunting
Homemakers
QQQuality Seekers
Jet-Set Elite
Prospect Pool
Single Customer View
Black
Gold
Green
One-to-one servicing
Tailored Products & Services
(By Appointment / Personal Shopping Services)
Direct Mail / Clienteling
Exclusive invitations to store events
(Introduce to “By Appointment”)
Direct Mail
System generated target offers
(Sales Assc. / Rewards team)
Clienteling
Retain Most
Valued
Customers
CRM
Develop
Customer
Relationships
Rules / Prioritization
Analysis / Segmentation / Modeling
Single Customer View / Marketing Analytics
Data Sources
Data quality
Flexible design
Scalable architecture
Systems integration
Data enrichment
Product
Demographics
Behavioural
Propensity modelling
Cross-Sell Analysis
Retention AnalysisCustomer metrics
Campaign results
Forecast reports
Customer Centric Strategies
Harrods Rewards Program
55% of sales are
loyalty card based
Black
Gold
Green
Q
Customer Centric Strategies
Rewards Program & Customer Segmentation Alignment
Tier Codes by Segment
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jet-SetElite
QualitySeekers
BargainHunting
Homemakers
Wishful orWistful
Teddies& Treats
UK Non-Spenders
MiddleEast
Rest ofWorld
Staff
Segment
Green 0 Green 1 Green 2 Gold Black Elite
AGENDA
Introduction to Harrods
The Harrods Challenge
Harrods Information Systems Strategic Alignment
Customer Centric Initiatives
Empowering the Future
Lessons Learnt
Empowering the Future
PRODUCT Centric Initiatives
Selection
Availability
Profitability
Workforce Optimization Initiatives
Task Scheduling
Staff Scheduling
CORPORATE PERFORMANCE Management Optimization
Continuous Improvement
AGENDA
Introduction to Harrods
The Harrods Challenge
Harrods Information Systems Strategic Alignment
Customer Centric Initiatives
Empowering the Future
Lessons Learnt
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
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