Low customers engagement at aeon celadon shopping center

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN NGOC ANH LOW CUSTOMERS ENGAGEMENT AT AEON CELADON SHOPPING CENTER MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR LE THI THANH XUAN Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN NGOC ANH LOW CUSTOMERS ENGAGEMENT AT AEON CELADON SHOPPING CENTER MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR LE THI THANH XUAN Ho Chi Minh City – Year 2019 LOW CUSTOMERS ENGAGEMENT AT AEON CELADON SHOPPING CENTER Table of Contents Chapter 1: Company overview 1.1 AEON group: 1.2 AEON Vietnam: 1.3 Aeon Celadon Shopping Center: 12 Chapter 2: Symptom: Customers decreasing 98.8% compare with last year (2018 Vs 2017) 13 Chapter 3: Problems identification 18 Potential problems: 18 3.1 3.1.1 Far from home of customers and inconvenient location 18 3.1.2 Unreasonable prices: 19 3.1.3 Worse assortment of products: 19 3.1.4 Cashier check out slowly and staff’s bad attitude of services: 21 3.2 Validating problems: 22 3.2.1 Manager’s perspectives: 23 3.2.2 Customer’s perspectives: 24 3.3 The importance of main problem 25 Chapter 4: 4.1 Cause validation 26 Potential causes: 26 4.1.1 Unreasonable prices: 27 4.1.2 Few famous brands: 29 4.1.3 Poor color, sizes and volume displays: 29 4.1.4 Very crowded customers at weekend and holiday: 30 4.1.5 Bad attitudes of services employees: 32 4.1.6 Employees lack of products knowledge: 33 4.2 Validating cause: 34 Chapter 5: Alternative solutions 37 5.1 Solution 1: For worse assortment of products 38 5.2 Solution 2: Worse of customer services 42 Chapter 6: Action plan 46 Chapter 7: Supporting information 48 Table of Figures Figure 1: Finacial review of Aeon group 2018 (Unit: Thousand USD) Figure 2: Aeon Vietnam annual report 2018 (Unit: Billion VND) 11 Figure 3: Aeon Vietnam annual report 2018 (Unit: Billion VND) 11 Figure 4: Aeon Vietnam annual report 2018 (Unit: G.rate and Volume sales) 14 Figure 5: Aeon Vietnam annual report 2018 (Unit: No Of competitors - Stores) 15 Figure 6: Aeon Vietnam annual report 2018 (Unit: No of customers) 16 Figure 7: Aeon Vietnam annual report 2018 (Unit: VND) 16 Figure 8: Customer survey report of Dec,2018 (Unit: Ratio%) 18 Figure 9: Customer survey report of Dec,2018 Ele (Unit: No of customers) 20 Figure 10: Customer survey report of Dec,2018 Mul (Unit: No of customers) 20 Figure 11: Customer survey report Cust Purchases in food line (Unit: Ratio%) 27 Figure 12: Customer survey report Cust Purchases in soft line (Unit: Ratio%) 28 Figure 13: Customer survey report Cust Purchases in hard line (Unit: Ratio%) 28 Figure 14: Hard line annual report 2018 sales and GP (Unit: billion VND) 30 Figure 15: Number customers at weekday (No of Customers) 31 Figure 16: Number customers at weekend (No of Customers) 31 Figure 17: Annual report 2018 No of customers complaints (Unit: No cust) 33 Figure 18: Annual report 2018 No of cases (Unit: No cases) 33 Figure 19: Annual report 2018 No of cases (Unit: No cases) 34 Figure 20: Estimated costs first solution and second solution (Unit:VND) 41 Figure 21: Estimated costs first solution (Unit: VND) 44 Figure 22: KPI Revised update (Unit: Weight) 44 List of Diagrams Diagram 1: Aeon group global expansion Diagram 2: Aeon Vietnam organizational structure Diagram 3: Aeon Vietnam philosophy 10 Diagram 4: Aeon Celadon organizational structure 12 Diagram 5: Initial cause effect map of Symptom 26 Diagram 6: Final cause effect map of Aeon Celadon 36 Executive summary: Customers experience is one of the most significant factors in retail industry and it will enhance customers’ engagement that can be interpreted as customers’ interaction in terms of perception, emotion and behavior toward a store Thus, the high customer engagement is able to improve customer satisfaction, strengthen customer loyalty and encourage oral behavior, which helps to keep a sustainable competitive advantage and allow them to charge higher prices and higher profit margins than competitors However, at Aeon Celadon Shopping Center face is Customers decreasing 98.8% compare with last year (2018 Vs 2017) Using different literature reviews and concluding in-depth interviews, survey among customers and employees at Aeon Celadon Shopping Center, this research aims to define what the main problem is, why it is the main problem, how important it is and how it affect to the business performance at Aeon Celadon Thus, the findings show that has some potential problems are listed as: Far from home of customers and inconvenient location; Unreasonable prices; Worse assortment of products; Cashier check out slowly and staff’s bad attitude of services And main problems are Worse assortment of products, Worse of customer services Main causes are Few famous brands and bad attitudes of services employees And solutions for these issues are hire Merchandiser expert from outside to make new strategies for Electrical and Multimedia department and Training for service employees In conclusion, the thesis points out the central problem at Aeon Celadon Shopping Center, what main causes of the problem and how to make outstanding decision of the solutions to solve the problems, to increase customer engagement as well as business performance at Aeon Celadon Shopping Center Chapter 1: 1.1 Company overview AEON group: Aeon group is one of the biggest retailers in the world with over 250 years of establishment and development It’s headquarters is located in Chiba, Japan During the long-term history of operations, Aeon group always keep the solid commitment to customers that is “Customer First” Towards a prosperous, stable and happy society is the basic principle in the operation of Aeon group Its high accountability to customers has helped Aeon group have important achievements in gaining customers’ trust and expanding business scale as well in both Japan and other Asian countries Below is the milestone of Aeon group • 1758: first established the Shinoharaya shop at Yokkaichi • 1887: moved Shinoharaya store to Yokkaichitsuji city and changed its name to Okadaya • 1926: rebuilt Okadaya into a joint stock company • 1959: Okadaya kimono fabric store changed its name to Okadaya with a capital of up to 15 million USD • 1969: merged three companies including Okadaya, Futagi and Shiro to establish Jusco company • 1984: Jusco expanded its business in Malaysia and Thailand • 1989: Jusco changes its name to Aeon Group And net sales revenue of Aeon group in 2018 archived 68.977 billion U.S dollars Figure 1: Finacial review of Aeon group 2018 (Unit: Thousand USD) In recent years, the average age of Japanese population has been increasing and the market tends to be saturated, so one of Aeon's new strategies is to invest in other developing countries, especially those the country has a high economic growth rate in the ASEAN region Vietnam is the first Southeast Asian country selected by Aeon to invest in development after 30 years of development in Malaysia and Thailand, and Aeon group strategies is making Aeon Vietnam by next second Aeon Japan Diagram 1: Aeon group global expansion 1.2 AEON Vietnam: Aeon Hochiminh Representative Office was established in 2009 Since 2011, Aeon Vietnam has operated as trade centers, department stores and supermarkets which are the main business activities of Aeon group Besides, Aeon Vietnam implements other business activities relevant import and export, commerce and market research There are four shopping centers in Vietnam, three in the South and one in the North They are Aeon Tan Phu Celadon, Aeon Binh Tan in Hochiminh City, Aeon Canary in Binh Duong and Aeon Long Bien in Hanoi Diagram 2: Aeon Vietnam organizational structure AEON Vietnam Vision statement: Aeon Vietnam wants to become a firm that will reach the soul of five billion people over Asia AEON Vietnam Mission and Philosophy statement: AEON Vietnam mission and philosophy is encapsulated in three words, they are “peace”, “humanity” and “community”, following the commitment of Aeon group “Customer First” These values are always maintained at anywhere Aeon its business, which positions Aeon as a human-to-human enterprise, a member contributing to the development of local communities Diagram 3: Aeon Vietnam philosophy AEON Vietnam focus on shopping center and supermarket chain The chain of shopping centers and supermarkets in AEON is currently being successfully operated in Japan and many other countries in Asia The AEON department store and shopping mall provides customers with comprehensive day-to-day support for a wide range of industries, from clothing to food items and household items These items are carefully selected and inspected, perfectly meeting the taste and tastes of the local people, as well as providing the necessary services 10 As a basis for evaluation somes key benefits and costs for first solution and second as follows: ❖ Benefits: ✓ Motivation and participation of higher employees ✓ Improved customer service skills ✓ Increase customer satisfaction ✓ Increase organization profits ✓ For individual employee incentives ✓ Employee engagement ❖ Costs: The estimated cost for first solution outlined above is specified in detail as follows: Figure 20: Estimated costs first solution (Unit: VND) Figure 21: KPI Revised update (Unit: Weight) 44 After analyzing and comparing the estimated benefits and costs between two potential solutions above, the first solution focuses on training for service employees for improving customers services sactisfaction at Aeon Celadon with costs VND 110 million should be choose In fact, since the KPI system is only used once a year at the end of the year, managers are hard to keep tracking of the advantages and disadvantages of regular employees to evaluate them accurately Specifically, the first solution training for service employees that can make the department little bit costs However, training for service employees make the business of the company are greater is because of the loyalty they command from their customers This loyalty ensures that customers stay with the company over the years 45 Chapter 6: Action plan Based on literature reviews, actual finding and two solutions presented above, the Aeon Celadon needs to perform actions with four steps for each solution as following: • Solution1: Hire MD expert from outside Step1: Candidate sourcing Step2: Application tracking Step3: Interview and job selection process in recruitment Step4: Handing over the employment offer Thus, a detailed six-months action plan from January 2020 to June 2020 will be planned as follows: 46 • Solution2: Training for service employees Step1: Create Objectives and Outcomes Step2: Develop Targeted Content Step3: Track Training Effectiveness Step4: Continuous Training Thus, a detailed six-months action plan from January 2020 to June 2020 will be planned as follow 47 Chapter 7: Supporting information Interviewee’s Demographic: No Name 1Ms Miyata 5Ms Ngoc Tuyen Position Head of MD Hardline Hardline Manager Softline Manager Foodline Manager Customer 6Ms Ngoc Thuy Customer 2Mr Nguyen Thanh Trieu 3Ms Phan Thi Hao 4Mr Nguyen Ba Tien 7Ms Nguyen Thuy Customer Hang 8Mr.Yasuo Nishitohge General Director Working Time of Experience interview years 2, Mar,2019 years 2, Mar,2019 years 2, Mar,2019 years 2, Mar,2019 Customer 2, Mar,2019 Customer 2, Mar,2019 Customer 2, Mar,2019 years 2, Mar,2019 Place of interview Aeon Celadon Aeon Celadon Aeon Celadon Aeon Celadon Aeon Celadon Aeon Celadon Aeon Celadon Aeon Celadon 48 Transcript from interview: Theme Coding Category + Internal + Internal working working situation situation + Teamwork 1.What are the key factors that you consider most in your department? Ms Miyata head of MD: I’m strategies that focus on imported products to make store difference with the competitor, but unfortunately after two years I found was is wrongs because almost of famous brand + Recognition + Recognition have a manufacturing in Vietnam so assortments and price very competitive compare with imported products Mr Nguyen Thanh Trieu Hardline Manager at Celadon store: Almost of + Internal product in hand manage are aging stock and working model is not updated, even store have strong situation promotion but can not sold out, so that very + Internal working situation + Recognition + Teamwork difficult for me to make Visual Merchandis + Recognition Display to attrack customers Ms Phan Thi Hao Softline Manager at Aeon Celadon: I love working in good team where I have been guided to support to develop valuable work-skills and received + Internal + Internal working working situation situation + Teamwork + Recognition + Recognition some encouragement to contribute In general, I love to work with my team as well as Celadon store 49 Mr Nguyen Ba Tien Foodline Manager at Aeon Celadon: I am working at Aeon almost years, I got a lot of support from my boss my team and all of department related and that make me happy to work at here 2.What are department you will focus on for improvement? Ms Miyata head of MD: I’m will focus on famous brand has manufacturing in Vietnam at Electrical and Multimedia department And that is my strategies for this year +Categories +Brands +Merchandising management management Mr Nguyen Thanh Trieu Hardline Manager at Celadon store: I will make +Area selling floor enough ordering to full fill products in my area manage selling floor especially Electrical and multimedia department to meet with Merchandising Department +Sales, GP management +Ordering System +Merchandising management strategies to attract more customers Ms Phan Thi Hao Softline Manager at Aeon Celadon: My line sales and gross profit quite good however my line facing with high inventory so my focus to reduce inventory in Softline from 90 days to 60 days especially kids’ department +Sales, GP +Area selling floor +Ordering management System +Merchandising management +Inventory management 50 Mr Nguyen Ba Tien Foodline Manager +Training +Training and at Aeon Celadon: Last year I have training +Coaching development staffs in Japan, so this year I will focus on how skills training to my staffs the same skills with Aeon Japan for all department in my line Do you have ever shopping in Aeon and it is satisfaction for you? Ms Ngoc Tuyen customer: I’m waiting for more than 20 minutes to get past the cash register at Aeon Tan Phu, my house in District - Ho Chi Minh "Guests are too +Shopping +Customer behavior services +Satisfaction crowded, I am afraid to squeeze so I only buy a few exotic fruits and vegetables and come back Go to the checkout counter and have trouble because the system is faulty, not receiving payment by card Ms Ngoc Thuy: I’m often went to Aeon and was mistaken for the money at cashier +Shopping counter every time, I’m always had to check behavior again and was wrong, when I sent the wrong +Satisfaction +Customer services message, the cashier returned her money without checking again and took the bill or products, I’m very anxious about calculating the wrong and getting the money back, and she ask where Aeon's reputation is, and always make the wrong money, so she have to take precautions and simply refund the money and this is make she 51 dissatisfied Ms Nguyen Thuy Hang customer: I usually shopping in Aeon in general Aeon quite good and however some need to +Shopping +Customer improve, one-time I have a payment at the behavior services counter the cashier staff has an +Satisfaction inappropriate attitude when among the items I pay, there is product without code Should not be able to display the payment amount It is thought that the staff should guide them enthusiastically and warmly, explain to me rather than expressing an uncomfortable attitude and saying, "this product is not paid out" I find such service unacceptable Attitude should be reviewed and revised Have you ever purchased goods on the first floor and the second floor in this department store? Ms Ngoc Tuyen customer: I always purchase apparel for my Kids and myself in first floor and I has never purchase in second floor because the goods so boring not attract me +Purchase +Categories behavior management category category +Purchase Ms Ngoc Thuy: I always purchase apparel by +Selling floor management satisfaction for my Kids and myself in first floor and in second floor I has purchase some goods of +Purchase +Categories behavior 52 household only category by management category Ms Nguyen Thuy Hang customer: I +Purchase always purchase for food in ground floor satisfaction +Selling floor management only What are products did you purchase and how much prices? Ms Ngoc Tuyen customer: I purchase food and apparel for my family +Purchase behavior Ms Ngoc Thuy: I purchase food and apparel for my family Ms Nguyen Thuy Hang customer: I category +Categories management by +Selling category management +Purchase +Prices satisfaction management floor always purchase for food in ground floor only For Electrical and Multimedia products, where you usually purchase? The reason you choose to purchase at those places? Ms Ngoc Tuyen customer: I always purchase in Dien May Xanh and The Gioi Di Dong, because there are a lot of products to choose and their very good services like testing, installation software, delivery … I'm very satisfaction about that Ms Ngoc Thuy: I always purchase in +Purchase behavior +Categories category by management 53 Nguyen Kim, because my have good category relationship with their very long time, every +Purchase purchase I choose Nguyen Kim and more satisfaction over I have the silver member card, so they have special promotion for me Ms Nguyen Thuy Hang customer: I always purchase in Dien May Xanh and The Gioi Di Dong, because nearby my house How you think customers services at Aeon Celadon? and any suggestion for improvement Ms Ngoc Tuyen customer: Today I see there are some cashiers who are no longer +Shopping +Customer new because I have seen uniforms but behavior services professional not yet stable, dealing with the +Satisfaction management situation is not fast, if at the time of and crowded, it will take a long time and guests suggestion waiting I think Aeon should regularly check skills qualifications Ms Ngoc Thuy: I sincerely comment on the working attitude of cashier on how to deal with customers during the direct transaction process Customers wonder, +Shopping +Customer cashier instead of gently handling, glare- behavior services collecting revenues patted the table to +Satisfaction management challenge customers to inform customer and 54 service department I hope, and other suggestion customers will not have to encounter this unhappiness during the next shopping Ms Nguyen Thuy Hang customer: I am +Customer very interested in services in Aeon Celadon, +Shopping services but I have contributed some issues about behavior management customer care service in Aeon Celadon +Satisfaction Myself I have joined Coop mart every time and Tet comes to Coop mart, I take good care of suggestion the staff, they all give gifts to all Coop mart members who have a lot of accumulated points will be given gifts while in Aeon Tet holiday see nothing Because I am near Aeon, so I shop here more than Coop mart But when I went to Tet I still got gifts from Coop mart Dear Sir, could you let us know about business situation at Aeon and facing with the problem? Mr Yasuo Nishitohge General Director of AEON Viet Nam: “As you know, in 2018, AEON Vietnam has been in operation for years Until now, we have been developing year by year and always catching new challenges during the past Business years As a result, we have achieved great situations success thanks to your efforts Besides, we Business development strategies have learned from mistakes I think the most important point of the retail industry is to 55 gain experience as an opportunity to learn and improve Nothing is better than lessons learned from business I want to remind with you that the biggest risk is when we never take risks That is, all businesses must evolve into new markets because the times will change, customers' shopping needs also change and the competition situation changes rapidly each year The key point is that we have been expanding the size of the Company in the last years On this momentum, we are also facing new problems with customers decreasing 98.8% at AEON Celadon so we have to make new plans, new rules, new systems, etc to developing business and always need to focus look to the future and consider the issues more carefully because this has an important role to predict future business strategies On the other hand, we need to capture and take advantage of great opportunities in the future.” 56 References Christou P Vietnam's retail market: Future growth https://wwwkantarworldpanelcom/vn/news/Vietnams-retail-market-Future-growth2018 Salahuddin ABEA, Mohammad Muzahid Antecedents of Retail Store Image in the Context of a Leading Retail Superstore in Bangladesh Scholarly Journals 2014;7(7):90-109 Velayudhan SK Outshopping in rural periodic markets: a retailing opportunity Scholarly Journals 2014;42(2):151-67 Chang S-HW, Kai-Yu INVESTIGATING THE ANTECEDENTS AND CONSEQUENCES OF AN OVERALL STORE PRICE IMAGE IN RETAIL SETTINGS Scholarly Journals 2014;22(3):299-314 Gil-Saura IRM, M Eugenia; 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Trade Journals 1992;24(12):22 58 ... 2019 LOW CUSTOMERS ENGAGEMENT AT AEON CELADON SHOPPING CENTER Table of Contents Chapter 1: Company overview 1.1 AEON group: 1.2 AEON Vietnam: 1.3 Aeon Celadon. .. to customers and vehicle statics report show that average customers visits to Aeon Celadon at weekday around 32.921 customers meanwhile weekend is around 65.573 customers, that mean customers at. .. ECONOMICS HO CHI MINH CITY International School of Business TRAN NGOC ANH LOW CUSTOMERS ENGAGEMENT AT AEON CELADON SHOPPING CENTER MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR LE THI