297 Jurnal Manajemen dan Pemasaran Jasa Vol. 12 No. 2 September 2019 :297-314 ISSN 2442 – 9732 (Online) Doi: http://dx.doi.org/10.25105/jmpj.v12i2.5521 ISSN 0216 - 3780 (Print) CONSTRUCTION OF CUSTOMER RELATIONSHIP MANAGEMENT IN RETAIL BUSINESS Robert Kristaung Murtanto Universitas Trisakti robert_kristaung@trisakti.ac.id murtanto@trisakti.ac.id Abstract This article aims to construct the dimensions of customer relationship management (CRM), which consists of processes, preferences, customization, readiness, and capability in the retail service industry. With a total sample of 257, the results of testing using Structural Equation Modelling show that the fifth dimension of CRM construction contributes significantly to the construction of CRM. The findings of the study on the construction of CRM customization show that there is still a weaknesses in registering valuable loyal customers. The collapse of conventional retail business is caused by not putting the priority of detecting valuable old customers This weakness becomes the strength of online retailers who are able to get traditional retail customers to switch to online platforms. CRM customization is also a crucial managerial implication for conventional, digital retailers and digital- conventional retail formats. Keywords: process; preferences; customization; readiness; capability; and customer relationship management Article History Received: 14 Sep 2019 Revised: 24 Sep 2019 Accepted: 2 Oct 2019 INTRODUCTION The retail service industry is the highest speed growing business in the global market and has undergone a significant transformation over the past decade. As the develop service landscape, because of the increased industrial competition, the retail industry faces more enormous challenges in maintaining a competitive position to continue to having high profitability. One of the challanges is making innovation in the development of new service and the existing service. But it seems that the service business, including retailers, failed to do what is called the consumer perception of service innovativeness (Kristaung & Riorini, 2010), The modern retail store that has been so popular has experienced a tremendous shock with a disruptive economy, which actually started when entering the 2000s. It's just that at the beginning that was affected at that time was the business of mass media such as