The retail sector in the Asia Pacific region is a bright spot for companies outsourcing customer relationship management (CRM), according to a recent report by industry analysts Ovum.
Opportunities abound such that the number of call centre agents for the industry is expected to grow by 30 percent in the next five years, or by 2016 to respond to this market growth.
The challenge for CRM companies outsourcing is to enhance their service offerings to take advantage of the growth prospects, according to an Ovum report titled 'Profiting from CRM Outsourcing in Retail'.
"We believe that there is tremendous opportunity for CRM outsourcers globally to win business in the retail sector," said Peter Ryan, Ovum lead analyst and report author. "However, in order to do so vendors will have to take a more forward-looking approach than simply cheap agents on telephones. Rather, the retailer of the future will need to partner with an outsourcer that can provide enhanced standards of support at the agent level channels."
Ryan gives this advice to retail after noting that the retail sector is undergoing significant changes globally because of the global economic crisis and changes to consumer buying behaviour. These factors affect how consumers interact with retail operators who are challenged to keep costs down while maximising revenues and delivering improved customer service.
Contact centre agents
Ovum data show that from 478,000 outsourced contact centre agents in 2011 in the Asia Pacific region, the number will grow to 681,000 in 2016 specifically for the retail sector. Australia is the most sluggish compared to China, The Philippines and India, with a cumulative average growth rate (CAGR) of only 3.8 percent over the five years.
The Ovum report cited an ANZ Bank analysis pointing to a sluggish Australian economy for the rest of the year and up to 2012. With this forecast, consumers are expected to tighten their purse strings and this will adversely impact retailers, prompting them to cut overheads to maintain their margins.
China, on the other hand, is seen as the global growth engine so CAGR is expected to be 12.9 percent. The Philippines is close behind China, with a CAGR of 11.2 percent from 2011 to 2016.
To win in the marketplace, CRM outsourcers must provide their retail clients with value-add offerings to the customers and this can help retailers boost their margins. But for this strategy to be effective, Ryan said CRM outsourcers must be good in using analytical tools.
"Outsourcers must stress their expertise in this domain, as well as capabilities in using analytics tools to properly target tactical opportunities," said Ryan. "This is likely to resonate strongly with retailers that have been struggling with budget issues leading to an inability to invest in the right agent training and application acquisition."
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