HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
NGUYỄN TRỌNG PHƯƠNG
OMNI CHANNEL STRATEGY IN ONLINE RETAILING:
THE CASE OF MAGESTORE
CHIẾN LƯỢC BÁN HÀNG ĐA KÊNH TRONG BÁN LẺ
TRỰC TUYẾN: TRƯỜNG HỢP CỦA MAGESTORE
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
HÀ NỘI - 2020
ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
NGUYỄN TRỌNG PHƯƠNG
OMNI CHANNEL STRATEGY IN ONLINE RETAILING:
THE CASE OF MAGESTORE
CHIẾN LƯỢC BÁN HÀNG ĐA KÊNH TRONG BÁN LẺ
TRỰC TUYẾN: TRƯỜNG HỢP CỦA MAGESTORE
Chuyên ngành: Quản trị kinh doanh
Mã số: 60 34 01 02
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS. NGUYỄN VIỆT KHÔI
HÀ NỘI - 2020
CAM KẾT
Tác giả cam kết rằng kết quả nghiên cứu trong luận văn là kết quả lao động
của chính tác giả thu được chủ yếu trong thời gian học và nghiên cứu và chưa được
công bố trong bất cứ một chương trình nghiên cứu nào của người khác.
Những kết quả nghiên cứu và tài liệu của người khác (trích dẫn, bảng, biểu,
công thức, đồ thị cùng những tài liệu khác) được sử dụng trong luận văn này đã
được các tác giả đồng ý và trích dẫn cụ thể.
Tôi hoàn toàn chịu trách nhiệm trước Hội đồng bảo vệ luận văn, Khoa Quản
trị và Kinh doanh và pháp luật về những cam kết nói trên.
……………, ngày …… tháng …… năm ………
DECLARATION
The author confirms that the research outcome in the thesis is the result of
author’s independent work during study and research period and it is not yet
published in other’s research and article.
The other’s research result and documentation (extraction, table, figure,
formula,
and other document) used in the thesis are cited properly and the
permission (if required) is given.
The author is responsible in front of the Thesis Assessment Committee,
Hanoi School of Business and Management, and the laws for above-mentioned
declaration.
Date…………………………..
1
LỜI CẢM ƠN
Đầu tiên, tôi xin gửi lời cảm ơn trân trọng nhất tới giáo viên hướng dẫn tôi,
PGS.TS. Nguyễn Việt Khôi vì đã có những lời khuyên và giúp đỡ tôi từng bước
hoàn thành luận văn này, nếu không luận văn đã không thể hoàn thành.
Thứ hai, tôi xin cảm ơn đặc biệt tới Ban Lãnh đạo công ty Magestore vì đã
cung cấp cho tôi số liệu giúp tôi hoàn thành luận văn. Cuối cùng nhưng rất quan
trọng, tôi xin cảm ơn PGS. TS. Hoàng Đình Phi, và các thầy cô của Khoa Quản trị
Kinh doanh đã cung cấp cho tôi kiến thức trong thời gian tôi học tại đây. Đối với
tôi, thời gian học tập tại đầy là thời gian tốt nhất trong cuộc đời.
ACKNOWLEDGEMENT
Initially, I would like to express my deepest gratitude to my supervisor,
Assoc. Prof. Nguyen Viet Khoi for his advice and involvement in every step
throughout my research process, this master thesis would not have been completed.
Secondly, I would like to send my special thanks to Magestore
management board for giving me the data to support my thesis. Last but not least, I
really appreciate Professor Hoang Dinh Phi and many other professors of Hanoi
School of Business for providing me knowledge during my study here. This is the
best time of master student life.
2
CONTENT
ABSTRACT ............................................................................................................... 8
INTRODUCTION...................................................................................................... 9
1. Rationale ............................................................................................................ 9
2. Literature review .............................................................................................. 11
5. Research Methodology..................................................................................... 14
6. Thesis structure ................................................................................................ 15
CHAPTER I: OVERVIEW OF OMNICHANNEL STRATEGY ........................... 17
1.
Definition of omnichannel strategy.............................................................. 17
2.
The development of omnichannel .............................................................. 19
2.1.
The transition from single channel to multi-channel ...................... 19
2.2.
The transition from multi-channel to omnichannel ........................ 20
2.3.
Comparison of three models: Multi-channel, Cross-channel and
Omni-channel ................................................................................................... 21
3.
4.
The necessity of having omnichannel in today’s world ............................... 26
3.1.
Increasing number of customers shopping across channels .......... 26
3.2.
The increase in customers’ expectation ......................................... 28
3.3.
Inventory visibility ......................................................................... 28
3.4.
Fulfillment process optimization ................................................... 30
3.5.
Boost sales ...................................................................................... 30
3.6.
Customer service ............................................................................. 31
3.7.
Marketing ........................................................................................ 31
Requirements on omnichannel strategy ....................................................... 32
CHAPTER II: RESEARCH METHODOLOGY ..................................................... 35
1.
Research method......................................................................................... 35
1.1.
Interviews............................................................................................. 36
3
1.2.
2.
Case study – Decathlon Japan Omnichannel Sports Retail ................. 37
Data collection and analysis ......................................................................... 38
CHAPTER III: ANALYSIS OF MAGESTORE’S OMNICHANNEL SOLUTIONS
AND ITS APPLICATION IN RETAILERS’ OMNICHANNEL STRATEGY ..... 40
1.
Overview of the company and the industry................................................ 40
1.1. Overview of the industry.......................................................................... 45
1.2. General information about Magestore .................................................... 46
1.3. Product overview .................................................................................... 47
2.
Analysis of products responding to omnichannel retail needs ..................... 50
2.1. Point-of-sales (POS) ................................................................................ 50
2.2. Inventory Management ........................................................................... 59
2.3. Order Fulfillment ..................................................................................... 67
2.4. Purchase management .............................................................................. 71
2.
SWOT analysis for Magestore applying OmniChannel Retailing model .. 73
CHAPTER IV: RESEARCH RESULTS ................................................................. 76
1.
Strengths and weaknesses of Magestore’s products .................................. 76
2.
Recommendation ........................................................................................ 78
2.1. Customer understandings .......................................................................... 78
2.2. Management system and security. ............................................................ 79
CONCLUSIONS ...................................................................................................... 80
1.
Research achievements ................................................................................ 80
2.
Research limitations ................................................................................... 80
3.
Suggestions for future research .................................................................. 80
4
ABBREVIATION
No.
Abbreviation
Definition
1
B2B
Business to Business
2
B2C
Business to Customer
3
POS
Point of Sale
4
CRM
Customer Relationship Management
5
IT
Information Technology
6
US
United States
7
SKU
Stock-Keeping Unit
8
ICT
Information & Communication Technologies
9
ICSC
10
DC
11
Magestore
12
CSV
Comma-Separated Values
13
XML
eXtensible Markup Language
International Council of Shopping Centres
Distribution Center
Magestore technology joint stock company
5
LIST OF FIGURES
Figure 1: Omnichannel Customer Experience
19
Error! Reference source not found.
21
Figure 3: Retail sales
27
Figure 4: ASEAN 6 - E - commerce Markets and Penetration (2014 - 2020)
41
Figure 5: Top Online Shopping Websites in ASEAN
43
Figure 6: Growth in Number of Internet Users ( CAGR%, 2015-2020)
44
Figure 7: Internet Users by country (million 2015 -20)
45
Figure 8: OmniChannel system
48
Figure 9: POS General Sale Process
54
Figure 10: POS Order
55
Figure 11: POS Return Order
56
Figure 11: POS Return Order
59
Figure 13: Stock Taking Screen
60
Figure 14: Stock sending screen
61
Figure 15: Sending stock workflow
62
Figure 16: Transfer stock - Request stock workflow
64
Figure 17: Customer return workflow
65
Figure 18: Dropship workflow
67
Figure 19: Order Fulfillment process
70
Figure 20: Example of Order listing
71
Figure 21: Process of purchase management
73
6
LIST OF TABLES
Table 1: Other terms for Omnichannel
18
23
Table 2: Comparison of three models
25
Table 3: Examples for comparison among models
Table 4: An overview of requirements on OmniChannel Strategy
34
37
Table 5: Questions for open interviews
47
Table 7: Magestore’s development journey
53
Table 8: Features list of POS software
Table 9: Feature list of purchase management
72
Table 10: SWOT analysis for Magestore
75
Table 11: Strengths and weaknesses of Magestore’s products
76
7
ABSTRACT
The world of commerce in business to business (B2B) and business to
consumer (B2C) is changing rapidly and it will change even faster in the years to
come. Today’s empowered customer expects a consistent buying experience across
all retail channels – online, offline and both combined.
Retailers, for example, must offer store pickup for goods ordered online.
According to Forrester Research (2014), 71% of all customer expect to view instore inventory online, while 50% expect to buy online and pick up in-store.
However, only a third of retailers have operationalized even the basics such as store
pickup, cross-channel inventory visibility, and store-based fulfillment. Besides,
retailers must also make sure that customers choose how they return goods – either
ship them back or bring them to the nearest store. And this is when omni-channel
retailing becomes indispensable, which involves seamlessly integrating the
customer experience across all interaction channels – in-store, on the web and on
mobile devices.
The understanding on omni-channel retailing, in Vietnam, however, is still
in its very premature stage. Therefore, this paper explores what omnichannel
retailing is, what the requirements for an omnichannel strategy are and how these
requirements are being met by solutions provider, with the aim of giving an
overview on the omnichannel ecosystem and all the basics revolving around it. All
these questions are resolved by looking into the case of Magestore, an omnichannel
solution provider that targets foreign markets.
The research is conducted using qualitative research method including
interviews, meetings and case studies from clients working with Magestore.
To take a further step with the research, the author will choose to look deep into
one specific product of Magestore and how it is solving the needs of retailers to
give an in-depth analysis on the response of the company’s product and how it may
be improved.
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INTRODUCTION
1. Rationale
Nowadays, the retail market is becoming extremely competitive, as a result
of technology breakthrough that disrupts the habits and demands of consumers.
And as customers are becoming more demanding on their experience, retailers are
trying to find solutions to provide the best experience and differentiate themselves
from others. This means they need to find ways to lower their costs to deal with
competitive environment while increasing their service quality to fulfill the evergrowing expectations of consumers. Retailers, then, face the challenge of adopting
new strategies and learning new skills to survive.
With the impact of the Science and Technology Revolution, the retail
industry has made significant progress thanks to the consecutive debuts of ecommerce and digitalized platforms. The additional emergence of E-commerce and
digital platforms such as mobile channels or social media channels is changing the
mixed retail business model and customer’s behavior. That is the reason leading to
the gradual inferiority of the traditional single channel retailing model (which only
approaches customers in a direct or online channel). It is obvious that Omnichannel
Retailing will be the major trend in enterprises in the future.
It is seen that one strategy is indispensable when talking about competing in
retailing is “the omnichannel strategy”. This strategy has gained a significant
amount of attention from all stakeholders including retailers, consumers,
consultants, e-Commerce solution developers and even researchers (Deloitte,
2014). To explain in the most basic way, this strategy combines different channels
of sales from online to offline with the aim of giving customers seamless
experience through their entire purchase journey.
It is not by chance that Amazon and Walmart, two leaders in the retail
industry, opened real stores or online trading channels. That is the actual and
obvious evidence for the increasing attention of modern enterprises to selling
through associating their available channels. In fact, the so-called future of retail
industry has been applied by enterprises in the US and European countries for more
9
that 7 years and it has shown astonishing results with the ability to take over the
market and high growth rate.
Even now, a senior citizen looking to buy a smartwatch might be texted a
recommendation by a grandchild, then walk into a physical store to purchase. That
same grandchild on the other hand, might spend weeks parsing smartwatch
reviews, adding, then abandoning items in their cart on both mobile and desktop,
before finally purchasing because of an enticing email offer. It’s a complex process,
and it’s why omni-channel selling is so important.
However, in Vietnam, the retail concept has just come to recognition over
the last one year and enterprises are still vague about this new trend which is
foreseen to dominate the retail industry worldwide in the upcoming years. It is
reported that many retailers who execute the omnichannel strategy often face high
operational costs and low extra income (Rigby, 2010). Looking into Magestore,
from its experience of working with retailers and providing e-Commerce solutions,
we want to find out what the factors that make and break an omnichannel strategy.
From there, we also want to know the benefits of applying omnichannel and the
most advisable of adopting it.
In order to help E-commerce retailers and enterprises understand more
clearly this new and practical trend, as well as to fully take advantage of
Omnichannel’s benefits, it is necessary establish of exact definitions and
appropriate analyses about the situation and potential of cross-channel retailing in
Vietnam, especially with Magestore case. This will be a practical and reliable
foundation basing on the world’s experience of developing this model and
Vietnam’s current situation of E-commerce environment for enterprises to come up
with methods and solutions to implement Omnichannel in their business and
absolutely make use of their advantages, make profit, effectiveness for their
enterprises themselves.
Overall, the goal of this thesis is to gain insights on the requirements of
omnichannel strategy and how e-Commerce solution developers can respond to that
in their solutions for retailers.
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2. Literature review
Ana Mosquera, Cristina Olarte Pascual, Emma Juaneda Ayensa (2017),
Understanding the customer experience in the age of Omnichannel shopping.
Researches and analyzes Omnichannel environment, how customers approach
it as well as recommend for enhancing Omnichannel retailing for enterprises.
Customer Desires Vs. Retailer Capabilities: Minding The OmniChannel
Commerce Gap (2014). Analyzes consumer expectations for OmniChannel
experience Intensify and address OmniChannel’s position. The management
of several channels has been investigated in disciplines such as marketing,
retailing, and information systems (IS). Research in these fields has primarily
examined the consumer perspective, particularly multichannel shopper
characteristics and behaviour across channels (e.g., Ansari et al. 2008;
Venkatesan et al. 2007). Another research stream has focussed on the
company perspective and analysed channels’ effects on the performance of
offline or online channel implementation (e.g., Avery et al. 2012; Geyskens et
al. 2002; Homburg et al. 2014; Pauwels et al. 2011). In previous research on
the management of several channels, studies primarily took a dichotomous
viewpoint, making a clear distinction between online and offline channels.
In many cases, consumers do not complete a purchase process using only
one channel (Aubrey & Judge 2012). And 86% shop in various channels and
(McPartlin & Feigen Dugal 2012) want to use channels simultaneously.
Andrea Dixon, James W. Peltier, Shannon Cummins (2016), Omnichannel
research framework in the context of personal selling and sales management: A
review and research extensions. Researches and collects data about the
development of Omnichannel retailing in context of sales and sales management
that related to six issues: sales context, impact of technology, stages of sales
process, relationships and company performance and the role of media also.
Darrell Rigby (2011), The future of shopping. Points out future
consumption trend, especially the development of E-commerce and
upgradation of Omnichannel retail.
11
David Rygl, Norbert Beck (2015), Categorization of multiple channel
retailing in Multi-, Cross-, and Omni‐Channel Retailing for retailers and
retailing.
Summarizes, defines and explains the differences among Multichannel,
Crosschannel and Omnichannel.
Dongwon Lee, Sangkyu Park (2017), An Empirical Study on Consumer
Online Shopping Channel Choice Behavior in Omni channel Environment.
Analyzes choice behavior in Omnichannel environment then gives
recommendations for future development in this field.
Euro Commerce (2014), E-commerce, Omnichannel retail, and EU
policy. Analyzes E-commerce. omnichannel retail and factors affected.
Document forecasts the development of Omnichannel through years and EU
policy was enacted to encourage consumers on E-commerce.
Mariette Frazer, Beate Elizabeth Stiehler (2014), Omnichannel retailing: The
merging of online and offline environment. They defined clearly about
Omnichannel and its features.
Mohammad S. Rahman (2015), Competing in the age of omnichannel retailing.
Proposes solutions for carry on tasks on promoting Omnichannel effectively.
The consumer good forum (2015), Re-engineering the supply chain for the
Omnichannel of tomorrow. Analyzes the relationship and the indispensability of
supply chain and ominichannel retail.
Wojciech Piotrowicz and Richard Cuthbertson, Guest Editors International
Journal of Electronic Commerce (2014), Information Technology in Retail:
Toward Omnichannel Retailing. Overview of current Omnichannel situation,
relationship between technology and retail. Document also points out the
orientation of Omnichannel in the future.
Donald Carroll and Inés Guzmán, The New Omni-Channel Approach to
Serving Customers. Analyzes the trend in many industries toward the use of
multi-channel approaches to engaging with customers and show the
experiences of customers while approaching Omnichannel. Analyzes
successful cases of E-commerce models in the world and gives
12
recommendations for VietnamOmnichannel retail and its strategy are the most
comprehensive development trend of E-commerce. Therefore, it has received
a lot of attention from researchers from early days of presenting. However,
many researchers were still confused among the concepts of three retail
channel. After theoretical foundations were formed, researchers continue
doing research to analyze the consumer behavior and come up with
recommendations for enterprises. Nevertheless, these studies are based on
general behavior and strategy of some specific countries, it is difficult to apply
for Vietnam cases.
Vietnam E-commerce Association, Vietnam E-commerce Index report
2017. The report is the result of conducted survey at thousands of enterprises
across countries about E-commerce, retail channels and order fulfillment.
Nguyen Phuong Chi (2010) Researching some successful e-commerce
models in the world and lessons for Vietnam, Master of Economics thesis,
2010
3. Aims of research
Facing the urgent need to promote businesses to improve their capacity and
competitiveness, the study and application of retail solutions in e-commerce for
businesses in Vietnam is necessary. On that basis, the content of the thesis focuses
on the following main tasks:
Systemize to clarify some issues of E-commerce
Clarify the definitions, concepts, theoretical methods of Omnichannel.
·
Assessing the necessity of Omnichannel retailing and Omnichannel strategy
·
Retailers that purchased Magestore’s omnichannel solutions
·
Analyze the situation Omnichannel strategy in Magestore.
·
Research potentials, opportunities, difficulties as well as challenges when
applying Omnichannel for Magestore.
·
Analyze Magestore omnichannel solutions and their supporting services
·
Recommendations and solutions for Magestore.
4. Objects and Scopes of the research
13
The objects of this thesis are to gain insights on the requirement of the
omnichannel strategy, how the requirements are met in the omnichannel solutions
and in the execution of the strategy.
To identìy the scope of the research, we need to answer of three following
research questions:
What is the omnichannel strategy and why do retailers need to adopt it?
What are the requirements for omnichannel strategy?
How are these requirements being fulfilled and can be fulfilled by
Magestore’s omnichannel solutions and retailers’ execution?
5. Research Methodology
This thesis is done throughout the period of 3-month internship as a
Business Development Representative at Magestore. Following the goal of this
thesis, it is more descriptive of the factors deciding the success of omnichannel
strategy. For this reason, the main approach using in the research is qualitative
method. The qualitative method is a process of inquiries to understand a social or
human problem, based on a complex built of holistic pictures, depicted in words
with detailed information and reports which is executed in a natural setting.
The main research method used in the course of the research is the material
dialectical method, from a practical point of view about the applicability of the
research topic, the system viewpoint, and specific historical views: consider things
in specific circumstances; combining qualitative and quantitative methods for
analysis and synthesis.
According to Fink (2003), several occasions can be identified when a
qualitative survey design is suitable, including these following four reasons,
relevant to this study: first, the study is focused on exploring the knowledge and
opinions of experts in a particular field. Second, the study intends to collect
information in the participants’ own words rather than use predefined response
choices. Third, there is not enough prior information of the study subject to enable
either the use of standardized measures or the construction of a formal
questionnaire. Fourth, sample size is limited due to access or resource constraints.
a. Data collection methods
14
The research approach of this thesis is inductive, and it is qualitative
research. The data was collected from secondary sources such as articles, journals,
books, and reports. To learn about the Omni-channel, this thesis combines two
types of sources:
Internal documents: These are documents published by the company itself,
such as company-generated reports, annual reports, or public information on the
company's website.
Company documents: These are books or other reports about the company,
articles related to the industry and the company. These articles were taken from
Google's
b. Analytical methods - data processing
The data collected was then analyzed such as descriptive statistical methods,
data distribution to design statistical tables, comparison of indicators.
c. Integrated methods
In the thesis, a number of typical references were mentioned in the literature
review. The conclusion is also summarized in the final section.
6. Thesis structure
This thesis consists of introduction, three chapters, conclusion as
following
INTRODUCTION
-
Rationel,
-
Literatures
-
Aims of Research
-
Objects and Scopes of research
-
Research Methodology
-
Thesis Structure
CHAPTER 1: OVERVIEW OF OMNICHANNEL
CHAPTER II: RESEARCH METHODOLOGY
15
CHAPTER III: ANALYSIS OF MAGESTORE’S OMNICHANNEL
SOLUTIONS
AND
ITS
APPLICATION
OMNICHANNEL.
CHAPTER 4: RESEARCH RESULT
CONCLUSIONS
16
IN
RETAILERS’
CHAPTER I: OVERVIEW OF OMNICHANNEL STRATEGY
1.
Definition of omnichannel strategy
The cross-channel retailing concept (Omnichannel) was first time introduced
by Darrell Rigby in the report “Future of shopping” in 2011. At that time, he
defined cross-channel retailing as a model in which retailers sell their products to
customers through as much approaches as possible: traditional distribution
channels, website, email, social networks, phone switchboards, broadcast, etc.
However, this definition by Rigby was said to be unclear and can easily be
mistaken for Multichannel retailing model.
Since then, there have been hundreds of reports, researches about crosschannel model to form an exact definition and complete the theory of this model.
One definition that will be used throughout this thesis is: “Omnichannel can
be defined as a synchronized operating model in which all of the retailers’ channels
are aligned and present a single face to the consumer, along with one consistent
way of doing business.”
Rigby (2011) describes Omni-channel retailing is an “integrated sales
experience that melds the advantages of the physical stores with the informationrich experience of online shopping” whereas Verhoef et al., (2015) argue that
Omni-channel retailing consists of “synergistic management of the numerous
available channels and consumer touch points, in such a way that the consumer
experience across channels and the performance over channels is optimised”.
According to Deloitte (2014), a successful retailer must be able to deliver a
consistent brand, level of service, information independent of which channel, place
or time consumers are reached. To sum up, a successful omnichannel strategy
makes sure consumers may experience many different touchpoints with the brand
but they have one unified view about their experience. Omnichannel means an
consumer-focused approach, which helps retailers to keep a consistent image in
consumers’ eyes despite the increasing number of touchpoints they develop with
the brand itself.
Other terms for Omnichannel are used in literature are as follows:
17
No.
Terms for Omnichannel
It is about seamless integration of channels and data. Since consumers
1
don’t distinguish between channels, retailers will have to support
seamless integration among and between each of them (Simmons, 2013)
2
3
Omni-channel is the unified experience that the consumer has, going from
every single touch point with a brand (Steve Mast, 2013)
Omni-channel need the right technologies that can deliver consumers the
unified experience in an efficient, enjoyable manner. (Webcredible, 2012)
Integrated retail: Enable our consumers to shop anytime, fulfill anywhere
4
any time and pay any way. With a shopping experience that is simple,
seamless, relevant and rewarding (Dimalo, 2014)
Omnichannel retailing is an integrated sales experience that melds the
5
advantage of stone stores with the information-rich experience of online
shopping.
Omnichannel can be defined as a synchronized operating model in which
6
all of the company’s channels are aligned and present a single face to the
customer, along with one consistent way of doing business (Carroll and
Guzman, 2013)
Successful omnichannel strategy is contingent upon providing a
7
consistent on-brand experience across all channels, which requires that a
retailer possesses an intimate understanding of the potential and
peculiarities of each (Ginsberg, 2013)
Table 1: Other terms for Omnichannel
Overall, it can be understood that omnichannel aligns channels and provide
consumers with consistent experience. This experience covers all aspects of the
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