What to look for when selecting retail CRM

Understanding customers, managing stock and running promotions are three retail functions that are enabled by CRM. 

Modern retail is incredibly sophisticated and CRM software enables smaller retailers to gain advantages that used to be the preserve of bigger players.

In this article, we’re going to look at what retailers need to look out for when selecting the best CRM for their business.

It started with a Clubcard

In the UK, Tesco was one of the first large retailers to collect and use customer data with its Clubcard. The scheme launched in 1995, and in 2018 it boasted 17 million users.

Of course, technology in 1995 was far less sophisticated than today, but motivations driving the release of the Clubcard have remained similar. Retailers want to build relationships with customers so they keep coming back to the store.

The Clubcard plan was to swap points for data - customers accessed rewards, and in turn, Tesco accessed rich customer data they used to tailor communication and offers to customers.

Check out our top CRM features guide for all the features you need in your CRM system

Retailers now use CRMs for a range of critical business functions, including:

  • Segmenting customers to ensure marketing is more targeted.
  • Management and execution of promotions.
  • Management of inbound marketing campaigns.
  • Managing levels of inventory. 
  • Planning and performance analysis.

Let’s take a look at some of these features in more detail…


Retail promotions are nothing new. From the market stallholder offering two for one on strawberries to the mammoth Amazon promotions that have become part of the retail calendar, the value of promotions is huge. Just for fun here are some retail figures for promotion days in American retail:

  • Cyber Monday: $7.9 billion
  • Black Friday: $6.2 billion
  • Thanksgiving: $6.2 billion

Promotions are at the heart of the Groupon business model ($2.6bn in annual sales), and the site is built around small businesses finding new customers.

Retail promotions are often directed at brand new customers to build a client base - where a CRM becomes incredibly powerful is generating promotions for the existing customer base.

This was the drive behind the Tesco Clubcard.

Retailers that can understand customers better can tailor promotions that will appeal to specific target groups better. If Tesco knows a customer is 65+, male and frequently buys ready meals, it can ensure the promotions focus on those products. 

This is a rudimentary example. The Clubcard is capable of considerably more - a sophisticated profile of spending habits, engagement with offers and huge datasets that will inform Tesco on the best way to promote to customers.

A CRM is important for executing campaigns. A large retailer will collect huge datasets on customers from a range of marketing channels, including online, apps, in-store, wi-fi logins, coupons and more. This vast dataset needs to be centralized, so marketing teams can analyze it and build campaigns.

Most retailers will use some form of an email to market to customers. The email campaigns received by each customer will be most effective if tailored to their specific customer profile – the more specific, the more effective. The challenge retailers have is taking multi-channel data and collating it in one place – a good CRM is critical for effective promotion. Let’s consider the following.

A large clothing retailer with over 40 stores sells online, in-store and via an app; customers are making purchases across all channels and redeeming various discount codes. The retailer wants to build up a picture of every customer:

  • What is their favorite product?
  • Which offers prompt them to make purchases?
  • How do they prefer to buy?
  • When do they make purchases?
  • Are they buying for themselves or as a gift?

The list of questions will go on and on.

If a profile can be built for every customer in the centralized CRM, it allows the retailer to build up a profile over time. This is called a single customer view, and each customer is normally identified by an email address. That’s why retailers are desperate to collect customer data – because anything attached to that address helps build a picture of the customer – that may be searching online, using the app, logging into wi-fi or redeeming a coupon.

Once the retailer has a clear customer view, it can build out a large dataset in its CRM. Let’s look at how this data can be used to build campaigns.

Inbound marketing 

Hubspot defines the objective of inbound marketing as: 

Your goal is to attract new prospects to your company, engage with them at scale, and delight them individually.

This is very difficult to achieve in retail but critically important to sustained success. Let’s look at how a good CRM can help retailers achieve this:

Content creation

Attracting new customers is an important part of the marketing mix for a retailer, having a great store in a good location is an important step but creating online content is also important. Videos, blog posts, paid advertising or tutorials are all ways to engage customers - here are a couple of examples:

  • American Golf Discount has a section that includes professional golfers giving tips and industry advice.
  • Mend retailer Mr Porter places an emphasis on editorial with a magazine used to drive traffic and customers.
  • DIY retailer Wickes includes a section on its website that provides advice and guides on how to use its products.

Once retailers drive users to their websites, the next stage is capturing their details and finding out as much about them as possible. 

Email automation

Once retailers have collected some basic data on a customer, the next job is to find out more about them. Let’s take the retailer Next as an example - they collect customer data in many ways (online, apps, coupons, etc.) and then use what they learn to provide targeted marketing.

Email automation is one tactic used by Next; its CRM will collect rich customer data and then build automations that are designed specifically for the customer. 

For example, by building a profile that a male customer buys suits, shirts, and shoes in the Autumn, it can ensure information or promotions on those products are sent to the customer. Next would likely have hundreds of different email marketing funnels designed for specific customers. 

These email automations are highly-sophisticated. Determining what emails a customer receives depends on a huge range of factors like buying habits, email open rates, content consumed and many other factors.

Strong email marketing campaigns will become more tailored as new information on the customer emerges. For example, a retailer may start by sending a customer generic emails, and depending on how the customer engages in the email (e.g. open and click rates) the subsequent emails become targeted accordingly – if a user engages in content on shirts and clicks on search then emails with appropriate offers can be sent. 

Planning and reporting

A good CRM helps retailers make critical strategic decisions. By providing a quick and easy dashboard of key metrics, a CRM is an invaluable management tool.  A retailer will use a CRM to glean key insights:

  • Purchasing trends.
  • Lifetime customer value.
  • Ideal target customers.
  • Financial performance.
  • Effectiveness of promotions.

A CRM will provide different dashboards for key personnel. The CFO will see a very different view of the company performance to the store manager or head of marketing. 

Well laid out metrics should inform decision making.

The head of marketing should be able to understand whether a promotion has been successful in delivering sales or even an increase in customer lifetime value. These insights will enable the key team members to tailor a strategy accordingly, for example, re-running a successful campaign or changing a bad one.


A central CRM will need to connect with other tools to provide insight and operational efficiency. Here are a couple of examples of key retail tools a CRM may connect with:

Eagle Eye: This tool helps retailers build effective digital promotion campaigns.

Xero: The accounting tool helps retailers run management accounts for performance insight and regulatory reporting.

Active Campaign: An email automation tool to use customer data to build effective email marketing campaigns.  

CRM selection

When building a vendor shortlist for your retail CRM, it’s important to consider CRM features that are particularly relevant in the retail CRM space.

Check out our complete CRM selection guide and checklist

An effective CRM should factor in the following features for maximum effectiveness:

  • Inbound marketing: the capability to track customer data closely and then tailor marketing and promotional campaigns.
  • Integrations: most retailers will use a sophisticated tech stack, so a CRM that easily integrates is important.
  • Email marketing: as part of the inbound marketing strategy, email is likely to play a key role.
  • Planning and reporting: the CRM should provide information that enables decision making.
  • Stock management: there is a whole element of retailing not covered in this article, managing stock and cash levels.

Good luck selecting your retail CRM. 

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Doug Haines

About the author…

Doug Haines has worked on a variety of CRM implementation projects and now writes on a wide range of topics. He is a regular contributor to Discover CRM

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Doug Haines

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