Applying Data Mining to the Customer Relationship Management in Retail Trade
Customer Relationship Management (CRM) has attracted much attention due to the high competition in the retail trade. Meanwhile, data mining has great potential to improve the effectiveness of CRM, since the data volume of customers is drastically increasi
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Abstract. Customer Relationship Management (CRM) has attracted much attention due to the high competition in the retail trade. Meanwhile, data mining has great potential to improve the effectiveness of CRM, since the data volume of customers is drastically increasing. In this paper, we firstly propose a logic structure of the retail CRM system, and thus discuss several data mining techniques, i.e., classification, clustering, association analysis, for CRM. Last but not the least, several sub-fields of CRM that are suitable to the application of data mining techniques are discussed. As can be seen from this paper, the retailers must strengthen the application of data mining technology research in order to support the management decision-making and improve the level of information management. Keywords: Retail Customer relationship management Data mining
1 Introduction Retailing is one of the industries that are developing most rapidly in the last century. Nowadays, retailing becomes an important pillar industry of national economy. The development of retailing depends considerably on the technology progress, especially information technology (IT). Since 1960s of last century, after the revolutions of organization and management, the revolution of technology was raised. Many techniques include IT, Web and electronic commerce (EC), were applied widely in retailing which reduced the costs and raised efficiency for retailers. The development of retailing was supported greatly by technology progress. Today, the technology of information management is adopted by most of big retailers which is typified of Wal-Mart who has the management information system based on a global communication network that connects all chain shops and suppliers. Wal-Mart gets hold of competitive superiority by the application of IT and Web and became the biggest retailer, also biggest enterprise in the world. Based on IT and Web, the application of CRM was also developed in retailing. CRM is a system and soft for gather, storage and analysis of customers’ information. CRM could support the management the customers’ information as a kind of resource and the decision-making in the business [1]. CRM have been implemented in some retailers as Wal-Mart and gets distinct effects [2]. S. Zhou and Z. Wu (Eds.): ADMA 2012 Workshops, CCIS 387, pp. 116–124, 2013. DOI: 10.1007/978-3-642-41629-3_10, Springer-Verlag Berlin Heidelberg 2013
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Comparing the developed countries, the informationization and electronic commerce are also at a phase of beginning in China [3]. While many retailers have the management information system (MIS), it is only used in generic management as stocking, selling and accounting etc. A great lot information can not be used availably and transformed resource and wealth. Thus it is very necessary for retailers to implement CRM in order to advance the informationization and raise the power of competition [4].
2 Retail Relationship Customer Relationship Management
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