Project report vincom mega mall royal city rejuvenate the future of retail experience

VIETNAM MARITIME UNIVERSITY INTERNATIONAL SCHOOL OF EDUCATION PROJECT REPORT VINCOM MEGA MALL ROYAL CITY Rejuvenate the Future of Retail Experience Lecturer: Ms Nguyễn Thị Cẩm Nhung Class: BMM09 - Group 02: Vũ Hồng Nhung - 79335 Trần Huệ Trúc - 80169 Nguyễn Thu Hà - 77789 Lê Thị Thu Thủy - 79999 Ngô Thị Phương Anh - 77084 HAI PHONG - 2021 TABLE OF CONTENTS I Executive Summary II Company Overview 2.1 Brief introduction 2.2 Statement of objective 2.3 Statement of mission 2.4 Core values .4 2.5 Logo .5 2.6 Ownership structure .5 III Market Research 3.1 Industry Analysis 3.2 STP analysis 11 3.2.1 Segmentation 11 3.2.2 Targeting 13 3.2.3 Positioning .13 3.3 SWOT Analysis 13 3.3.1 Strengths 14 3.3.2 Weaknesses .15 3.3.3 Opportunities 17 3.3.4 Threats 18 IV Big Actionable Ideas .21 4.1 Redesign customers experience 21 4.2 Innovate tenant mix (rearrange pop-up stores according to customer segments) .22 4.3 Strategically digitalize mall operations 30 4.3.1 Smart parking system .30 4.3.2 Smart automatic payment machine in the supermarket 31 4.3.3 Intelligent service robots 33 V Action plan 35 VI Financial projects and appraisal 36 6.1 Formulation of a financial project 36 6.1.1 Sale projection (Projection of the statement of profit and loss) 36 6.1.2 Cash flow statement .38 6.2 Financial appraisal .39 VII Risk assessment .40 VIII IX Conclusion 41 REFERENCES 42 X APPENDIX 44 I Executive Summary Vincom Mega Mall Royal City (VMMRC) is the first subterranean shopping mall complex in Vietnam to comply with international standards and vast parking lots It is dubbed in Hanoi as a "miniaturesque European City" and earned "Vietnam's finest mega-mall" in 2014 Vincom Mega Mall Royal City's key enticing aspects are a large retail area, many entertainment choices, restaurants, commercial activities, and sales promotions Seventy percent of visits to Vincom Mega Mall Royal City currently have an average salary of less than VND 15 million per month and are under 35 years old All shopping malls and tenants are seeking solutions to enhance footfalls and revenues through trade marketing and promotional campaigns The Vincom Retail leaders have been spending a lot of time developing an approach to establishing VMMRC as the leading position in the Vincom shopping chain We want to rejuvenate this Mega Mall to become the “number one” place that initiates and spreads trends to the targeted customers However, in recent years, due to the lack of updates and improvements in terms of quality as well as not focusing on improving customer experience, the number of visitors visiting and shopping at Vincom Mega Mall Royal City has decreased significantly Instead, more and more shopping and entertainment centers have sprung up, such as Aeon Mall, Discovery Complex, attracting massive attention from visitors from all over the country We decided to assist with some innovative solutions to achieve this ambitious goal Specifically, we would like to focus the solution on addressing the following aspects:  Redesigning customer experience  Innovating tenant mix  Digital transformation of retail experience II 2.1 o o - 2.2 Company Overview Brief introduction Business Name: Vincom Mega Mall Royal City Legal form Sole Proprietorship/ Private Company: VinGroup Limited Company: Vingroup Joint Stock Company Location: No.72A Nguyen Trai Street, Thanh Xuan district, Hanoi Business sector: Retail shopping Product/ Services: Provides a wide range of travel, shopping, entertainment offerings where customers can combine sightseeing, consuming, and family interaction in one visit Personnel: 388 employees Statement of objective Vincom Mega Mall Royal City aims at becoming the 'no 1' site where the trend towards consumer targets may be initiated and spread 2.3 Statement of mission Vincom Mega Mall Royal City's mission is to pioneer a unique shopping, entertainment, and dining experience, helping to shape a new consumption style for consumers II.4 Core values Picture 1: Vincom Retail’s Core values (Source: Vincom Retail annual report, 2017) II.5 Logo Vincom Retail's logo portrays a bird flying towards the Sun indicating both its aim and the drive to attain new levels of success Picture 2: Vincom Retail Logo (Source: Vincom Retail annual report, 2017) 2.6 Ownership structure Figure 1: Organizational chart (Source: vingroup.net) Picture 3: Leadership chart (Source: vingroup.net) Picture 4: Executive Board of Business Areas (Source: vingroup.net) III 3.1 Market Research Industry Analysis Vietnam's retail real estate market recovered slightly after the anti-Covid-19 blockade shock in 2020 In which, Da Nang received clear optimistic signals after a period of hiatus Colliers Vietnam, the rapid economic recovery makes Da Nang an attractive retail market The rent of retail space in commercial centers in Da Nang in the first quarter of 2021 increased by 6-7 USD/m2/month compared to the previous quarter The occupancy rate was recorded at nearly 90% In Ho Chi Minh City, the Covid-19 period in February 2021 did not have much impact on the retail market, the rent of commercial centers in the central area still increased by 5-10 USD/m2/month compared to the fourth quarter of 2020, while the commercial centers in the suburbs had a slight decrease in rent (decreased by about USD/m2/month) Many shopping centers still keep occupancy rates up to 100% with long-term tenant contracts Vacancy rates at high-end shopping centers in Districts 1, 2, and have almost recovered or even improved compared to last year In Hanoi, the rent at commercial centers in Hanoi decreased by - USD/m2/month The occupancy rate remains stable, reaching nearly 100% for retail podiums and nearly 90% for shopping centers (Le Q, 2021) Vincom Retail's total consolidated net revenue in the first quarter of 2021 reached VND 2,226 billion, up 32% over the same period in 2020 In which, investment real estate leasing continued to grow with revenue reaching 1,712 billion dongs, up 18% over the same period last year Revenue from the real estate transfer segment reached VND 452 billion - an increase of 125% over the same period, due to the handover of three large commercial townhouse projects Consolidated profit after tax of Vincom Retail reached VND 781 billion in the first quarter of 2021, up 59% over the same period last year Regarding the scale of operation, Vincom Retail owns and operates 80 trade centers (commercial centers) in 43 provinces and cities nationwide as of March 31, the total retail floor area is about 1.7 million square meters Vincom Retails aims to achieve an after-tax profit of about VND 2,500 billion; net revenue from production and business activities reached 9,000 billion dongs The targets of revenue and profit both increased compared to the implementation results in 2020, increasing by 8% and 5% respectively It is expected to continue to provide the market with nearly 100,000 square meters of retail floor space, bringing the total retail floor area across the system to 1.8 million square meters With various types of shopping malls, this business will focus on developing large-scale Vincom Mega Mall in Hanoi and Ho Chi Minh City In addition, this business plans to open two shopping centers under the Vincom Plaza brand, Vincom Plaza My Tho and Bac Lieu in 2021 Regarding cooperation, developing strategic partners and tenant relations is the focus of the business plan in 2021, according to Vincom Retail's Board of Directors Accordingly, the business will continue to expand the network of new tenants in groups, including large international groups, new tenants with the potential to become chain customers, and Vietnamese tenants (Van P, 2021) With basically successfully controlling the COVID-19 pandemic in 2020, the industry in the first quarter of 2021 achieved a decent increase of 6.5% over the same period last year (General statistics office, 2021) Domestic trade has a positive growth rate, up 6.4% over the same period last year thanks to increased consumer demand, preparation for Tet holiday and businesses, trade centers, supermarkets… There are many promotions and discounts to stimulate demand and attract people's consumption (Phan, 2021) Figure 2: Revenue structure of the retail industry (Source: GSO, 2020) Total sales of consumer goods and services reached 5,073 trillion thanks to a strong recovery in demand at the end of 2020 According to the fourth quarter data of the General Statistics Office, the total sales of consumer goods and services increased by 7.8% y/y mainly thanks to a 12.2% YoY increase in retail sales, accounting for 78% of total sales The remaining industry group decreased by -5.8% over the same period, accounting for 21.4%, including accommodation and catering, travel, and others Figure 3: Essential and non-essential spending structure (Source: Fitch Solution, 2020) Vietnam is still spending a lot on consumer staples due to the low average income but is expected to gradually switch to more consumer discretionary as income improves The disposable income of Vietnamese people affected by COVID-19 and high thrift should focus on consumer staples spending The consumption structure still focuses on essential products, accounting for 61% of total household spending F&B with the largest value reached VND 767,940 billion, growing 12% YoY in 2020-2024 In the medium and long term, opportunities for consumer discretionary retailers will increase as lifestyle demands increase Experts estimate that in 2021, Vietnam's retail segment may soon recover, returning to pre-epidemic levels and many growth trends Specifically, according to a forecast of VNDirect Securities Joint Stock Company, it is expected that consumption will recover to pre-pandemic growth, total retail sales of consumer goods and services is expected to increase by 8.5%- 9% compared to 2020 Retail sales in 2021 increased thanks to the recovery of consumer confidence and the spread of vaccines for the pandemic Besides, from the differentiation of the retail industry in 2020, experts also forecast that in 2021 this industry will have main trends: Large retail companies seize opportunities to increase market share; shift consumer spending toward essentials, favoring grocery retailers; Covid-19 boosts the Your staff now can carry on more activity rather than wasting hours behind the cashier lane It can refurbish shelves, rearrange goods and advise clients more effectively You now have a well-organized business with outstanding personnel, a friendly atmosphere for your clients Self-pay setup usually includes: - Self-check-out software: Some systems may switch between cashier assistance and self-service Other software requires additional customization Self-checkout machines must include required and optional payment features to request assistance from store staff - Self-pay machines: Dedicated self-pay kiosks with multi-touch capabilities - Barcode scanner: Integrated into a payment device or a connected handheld device, the barcode scanner is the primary device of the selfcheckout system Customers can add items to the cart immediately instead of manually searching and selecting from the product list - Payment terminals: Self-checkout counters usually include an integrated terminal to help customers pay with credit cards and other contactless methods Some kiosks also have cash machines to facilitate cash payments - Receipt printer: Compact receipt printer suitable for kiosks Customers can receive a receipt right after completing the payment The self-checkout process in a retail store usually includes the following steps: Figure 13: Four steps of a self-checkout process (Source: The Authors) Picture 14: Sample of a self-checkout, machine (Source: Internet) Some clients seek a quick procedure as others want human contacts when they arrive in your shop Your consumers may choose their preferred way, both via 32 self-check-out as well as by regular check checks They feel more controlled and content with their experience 4.3.3 Intelligent service robots Nowadays, Robots and Artificial Intelligence (AI) have been on the rise The services industry seems to be quite interested in testing service robots In the world, there are several countries such as Japan, China, America, that apply service robots in their customer serving process The appearance of intelligent service robots is considered as a wind of change in the service industry One of the vital advantages of customer service robots is their versatility as they can multiple tasks and they have a high level of value The customer service robot can help out humans in many different ways: ● Voice interaction When the robots meet a person, they will have the ability to interact like a human, like greeting, answer questions intelligently, and have some fun Q&A with the customers ● Provide information For example, if the customer is having trouble finding a brand of clothes in the mall, the robot can tell and show that person the information of different clothes brands (price, review, type of clothes, etc.) in the mall which helps the customer have a better choice ● Guiding ways When a customer needs to find a way to a store or parking area, the robot can show him the navigation on the screen and tell him the ways to reach his destination ● Automatically return to charging After some hours are activated, the robots need to be charging in order to ensure their efficiency When the battery is low, it will automatically return to the charging room and recharge itself 33 Picture 15: Intelligent Service Robot Model (Source: Alibaba.com) 34 V Action plan Table 6: Project Action Plan (Source: The Authors) 35 VI Financial projects and appraisal 6.1 Formulation of a financial project 6.1.1 Sale projection (Projection of the statement of profit and loss) Table 7: Cash inflow in USD (Source: The Authors) 36 Table 8: Cash outflow in USD (Source: The Authors) 37 6.1.2 Cash flow statement Table 9: Initial Investment in USD (Source: The Authors) Table 10: Statement of Cash Flow (Source: The Authors) 38 6.2 Financial appraisal Table 11: Financial Appraisal (Source: The Authors) Above is the table of cost estimates for modification, technical input, and other related fees in USD Note: The cost is referred to from many sources There would be a price difference depending on the deal with the suppliers 39 VII Risk assessment Table 12 Risk Assessment (Source: The Authors) 40 VIII Conclusion In general, consumers nowadays prefer to shop quickly and intelligently They need ways to maximize their shopping time while still enjoying the best services and products at VMMRC If the mall authorities comply with the aforementioned recommendations, the customer satisfaction level will definitely be very high Ultimately, the path to success lies in curating experiences to engage and entice consumers by connecting with them at the right touchpoints, at the right time, and with the right message To respond to the rapidly evolving consumer preferences and behaviors, companies will need to innovate quickly and respond swiftly when navigating the digital retail landscape in Vietnam 41 IX REFERENCES Alibaba.com 2020 Ai Intelligent Disinfection Machine Spray Sterilizing Machine For Hall Fully Automatic Spray Disinfection Robot - Buy Spray Disinfection Robot,Ai Sterilization Machine,Spray Sterilizing Machine Product on Alibaba.com [online] Available at: [Accessed 21 June 2021] Báo Sài Gịn Giải Phóng 2020 xu hướng ngành bán lẻ năm 2021 [online] Available at: [Accessed 21 June 2021] BSC, 2021 Báo cáo triển vọng ngành 2021 Ngọc Trong Đá [online] Available at: [Accessed 21 June 2021] Bsc.com.vn 2021 Triển vọng ngành tiêu dùng bán lẻ năm 2021 [online] Available at: [Accessed 21 June 2021] Huyen, N., 2021 Báo cáo tình hình kinh tế - xã hội quý I năm 2021 [online] General Statistics Office of Vietnam Available at: [Accessed 21 June 2021] Le, Q., 2021 Nhân tố ngoại đưa bất động sản bán lẻ vào ổn định [online] baodautu Available at: [Accessed 22 June 2021] Phan, T., 2021 Bản in viết | không gian để ngành Công Thương chưa thay đổi mục tiêu tăng trưởng [online] Baochinhphu.vn Available at: [Accessed 21 June 2021] Phong, V., 2021 Vincom Retail hợp hai công ty bất động sản [online] Thesaigontimes.vn Available at: [Accessed 23 June 2021] 42 Trang thông tin điện tử - Hội đồng lý luận TW 2019 Thực trạng công nghiệp Việt Nam thời gian qua [online] Available at: [Accessed 21 June 2021] 10 Vccavietnam.com n.d Trung tâm Nghệ thuật đương đại Vincom | VINGROUP RA MẮT TRUNG TÂM NGHỆ THUẬT ĐƯƠNG ĐẠI VCCA [online] Available at: [Accessed 21 June 2021] 11.VCR (2021) Vincom Retail Corporate Presentation 12.VietnamCredit 2020 Vietnam’s retail industry to rebound in 2021 [online] Available at: [Accessed 21 June 2021] 43 X APPENDIX 44 45 46