Omni channel strategy in online retailingthe case of magestore

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 kết nghiên cứu luận văn kết lao động tác giả thu chủ yếu thời gian học nghiên cứu chưa công bố chương trình nghiên cứu người khác Những kết nghiên cứu tài liệu người khác (trích dẫn, bảng, biểu, công thức, đồ thị tài liệu khác) sử dụng luận văn tác giả đồng ý trích dẫn cụ thể Tơi hồn tồn chịu trách nhiệm trước Hội đồng bảo vệ luận văn, Khoa Quản trị Kinh doanh pháp luật cam kết nói ……………, 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………………………… LỜI CẢM ƠN Đầu tiên, xin gửi lời cảm ơn trân trọng tới giáo viên hướng dẫn tơi, PGS.TS Nguyễn Việt Khơi có lời khun giúp đỡ tơi bước hồn thành luận văn này, khơng luận văn khơng thể hồn thành Thứ hai, xin cảm ơn đặc biệt tới Ban Lãnh đạo cơng ty Magestore cung cấp cho tơi số liệu giúp tơi hồn thành luận văn Cuối quan trọng, xin cảm ơn PGS TS Hồng Đình Phi, thầy Khoa Quản trị Kinh doanh cung cấp cho kiến thức thời gian học Đối với tôi, thời gian học tập đầy thời gian tốt 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 CONTENT ABSTRACT INTRODUCTION 1.Rationale 2.Literature review 5.Research Methodology 6.Thesis structure CHAPTER I: OVERVIEW OF OMNICHANNEL STRATEGY 1.Definition of omnichannel strategy 2.The development of omnichannel 2.1 The transition fro 2.2 The transition fro 2.3 Comparison of th Omni-channel 3.The necessity of having omnichannel in today’s world 3.1 Increasing numbe 3.2 The increase in cu 3.3 Inventory visibili 3.4 Fulfillment proce 3.5 Boost sales 3.6 Customer service 3.7 Marketing 4.Requirements on omnichannel strategy CHAPTER II: RESEARCH METHODOLOGY 1.Research method 1.1 Interviews 1.2.Case study – Decathlon Japa 2.Data collection and analysis CHAPTER III: ANALYSIS OF MAGESTORE’S OMNICHANNEL SOLUTIONS AND ITS APPLICATION IN RETAILERS’ OMNICHANNEL STRATEGY 1.Overview of the company and the industry 1.1.Overview of the industry 1.2.General information about M 1.3.Product overview 2.Analysis of products responding to omnichannel retail needs 2.1.Point-of-sales (POS) 2.2.Inventory Management 2.3.Order Fulfillment 2.4.Purchase management 2.SWOT analysis for Magestore applying OmniChannel Retailin CHAPTER IV: RESEARCH RESULTS 1.Strengths and weaknesses of Magestore’s products 2.Recommendation 2.1.Customer understandings 2.2.Management system and secu CONCLUSIONS 1.Research achievements 2.Research limitations 3.Suggestions for future research No 10 11 12 13 LIST OF FIGURES Figure 1: Omnichannel Customer Experience Error! Reference source not found Figure 3: Retail sales Figure 4: ASEAN - E - commerce Markets and Penetration (2014 - 2020) Figure 5: Top Online Shopping Websites in ASEAN Figure 6: Growth in Number of Internet Users ( CAGR%, 2015-2020) Figure 7: Internet Users by country (million 2015 -20) Figure 8: OmniChannel system Figure 9: POS General Sale Process Figure 10: POS Order Figure 11: POS Return Order Figure 11: POS Return Order Figure 13: Stock Taking Screen Figure 14: Stock sending screen Figure 15: Sending stock workflow Figure 16: Transfer stock - Request stock workflow Figure 17: Customer return workflow Figure 18: Dropship workflow Figure 19: Order Fulfillment process Figure 20: Example of Order listing Figure 21: Process of purchase management LIST OF TABLES Table 1: Other terms for Omnichannel Table 2: Comparison of three models Table 3: Examples for comparison among models Table 4: An overview of requirements on OmniChannel Strategy Table 5: Questions for open interviews Table 7: Magestore’s development journey Table 8: Features list of POS software Table 9: Feature list of purchase management Table 10: SWOT analysis for Magestore Table 11: Strengths and weaknesses of Magestore’s products Figure 18: Dropship workflow Source: Inventory Management – User Guide for Magento 2.3 Order Fulfillment Magestore Order Fulfillment module 67 This module allows retailers to manage their order fulfillment process with key functions including: order fulfillment process management, order listing and report Order fulfillment process The summary of the process is displayed on the dashboard with information on orders by its attributes including status, day, carriers and picked/ packed requests by day This process is simplified and organized into steps including: · Step 1: Verify orders: Allows users to verify, hold or cancel orders To let users verify orders more efficiently, the software have batch creation option to mark orders users are verifying Staff are not allowed to see orders in the batch created by others They see orders in the batch they create and orders which are not in any batches Admin has permission to check orders information and staff in batches · Step 2: Check stock availability This step has the function of verifying orders, however, it is used to separate orders into groups based on inventory availability: Request pick from warehouse (for those having all items in stock) and Back order (for those lacking some items) From there, users will follow steps to add fulfillment requests · Step 3: Pick items: In this step, users will see a picking list and they will pick all items of these orders by following steps: o Select the warehouse to pick items o Choose one or many orders to pick items o Pick items for each order · Step 4: Pack items: Staff will follow sub-steps to complete this step, including: o Select the warehouse to pack items o Choose one or many orders to pack items: by scanning the pick ID o Recheck the quantity of items in each order o Pack items for each order 68 · Step 5: Deliver packages: User will be able to view the details of orders including which items are in the package, shipping information and tracking number from the shipping carrier 69 Figure 19: Order Fulfillment process Source: User Guide for Magento Order listing This dashboard classifies orders into types: Awaiting payment, back orders, hold orders, complete orders and canceled orders It is designed to allow users to have one view of all types of their orders 70 Figure 20: Example of Order listing Source: Purpose – Website UI Kit Report The software can show types of reports that record how many orders have been picked and packed including: · Fulfillment by warehouse (total/ daily) · Fulfillment by staff (total/ daily) 2.4 Purchase management Magestore Purchase Management module aims to provide a comprehensive solution for a retailer’s business This module eases the process of managing suppliers, quotations, and purchase orders, keeping things neat and tidy Full feature list of purchase management Supplier Supplier list View the supplier with summarized information - Total SKUs, purchase order value, date of the last purchase order 71 Create suppliers Assign products Pricelist Single product Multiple products Quotation List of quotations Search/ Filer/ Sort CSV or XML files Create quotations Add products Emails Table 9: Feature list of purchase management The process of purchase management includes these following steps: 72 > Step 1: Purchase staff create request for Quotation: A Quotation is the proposal of price and quantity of goods that store owners send to suppliers The quotation will become purchase order when a seller sends confirmation of price and availability of products stated in the quotation > Step 2: Purchase Manager validates request for Quotation > Step 3: Purchase Staff Send Request for Quotation to Supplier > Step 4: Purchase Manager Approves Purchase Order > Step 5: Purchase Manager Confirms Purchase Order > Step 6: Purchase Staff Complete Purchase Order Figure 21: Process of purchase management Source: User guide for Magento SWOT analysis for Magestore applying OmniChannel Retailing model Strengths  E - the com inte Magestore’s products The cost of wage for  reduced, which will save the total cost of company This will lead to lower price of products Applying OmniChannel  means that company has to develop the technology, which will improve the infrastructure  Update instead of traditional methods by using QR code, Credit card, Samsung pay, VN pay, , which will support the customers in shopping and paying online Opportunities E - commerce is now  profit is up to 10 billion USD in 2022 The  smartphone of Vietnamese is more than 70%, even the countryside can be up to 50% These people all can be potential customers of the store  OmniChannel Strategy isn’t a new retailing model in the world so Magestore can learn the experience from operations 75 CHAPTER IV: RESEARCH RESULTS Strengths and weaknesses of Magestore’s products Strengths and weaknesses of Magestore’s products in response to omnichannel retailers’ needs Requirements Inventory visibility A single brand with consistent information Adjust assortment to channel Insights through analytics Inventory allocation strategy Return logistics Cross channel fulfillment strategy Increased availability & reduced delivery time Table 11: Strengths and weaknesses of Magestore’s products Inventory Visibility Magestore’s Point-of-sales has a function of synchronizing online and offline orders in real time Retailers can choose to run the system online or offline In case they are running it online and the internet connection is lost All the orders and transactions can still be made and saved, which will then be uploaded online when the internet is back Currently, the system can deal with the data of 100.000 SKUs with 100.000 clients checking out in store 76 Moreover, Point-of-sales is connected with Inventory Management Therefore, the inventory information will be updated automatically with any actions in store And the other way around, if the inventory for specific is low or zero, cashier at store will know and inform their clients With its ability of real-time synchronization, Magestore’s POS and inventory management module have well met this requirement of omnichannel strategy A single brand with consistent information With its ability of real-time update on stock, Magestore’s products can ensure a consistent experience from website/ to store for clients However, it still lacks the ability to manage other channels including social media, kiosk, call center To be able to this, the company will need to integrate its products with marketing automation functions This will help provide a seamless experience in the way like, for example, if an item is out of stock, the ad runs for this item will be stopped til the item is back in stock Adjust assortment to channel The same as the second requirement, the company’s products have not yet met this requirement because of its lacking in functions of marketing automation The modules will not be able to analyze clients’ purchasing behaviors and show them products of high purchase possibility Insight through analytics With each module, Magestore can provide the most necessary list of reports that assist retailers in their management This includes: For Point-of-sales: 10 types of reports related to sales, order lists, staff, location and payment methods For order fulfillment: types of reports to record how many orders have been picked and packed: Fulfillment by warehouse (daily/ in total), Fulfillment by staff (daily/ in total) For inventory management: instant inventory reports to control product quantity by SKU Inventory allocation strategy 77 Currently, the inventory management system only has assisted warehouse managers to complete their tasks and update the data to the system However, for those tasks that require action suggestions and planning Return logistics Similar to the previous requirement, Magestore’s products especially POS and inventory management module can only resolve part of the return logistics issue for retailers On Point-of-sales, users can handle returned items by changing its quantity and update it in inventory However, the refund is still being processed and not ready for selling To be able to assist retailers to handle return items, there are many aspects related to Point-of-sales, inventory allocation and order fulfilment needed to be done Cross channel fulfillment strategy As said in previous requirement analysis, current products by Magestore not have the ability to gather data and give action suggestion related to planning As to help retailer with cross channel fulfillment, the system will need to be able to define the most suitable method and location to fulfil an order over all channels Increased availability and reduced delivery time The last requirement is a combination of the success of all previous requirements Besides, it requires effort from retailers themselves to train staff and adapt to the new working environment as well as the new system This requirement, however, is currently not within Magestore’s products’ reach as they are only able to satisfy the basic needs of small-to-medium retailers Recommendation 2.1 Customer understandings Company has to understand thoroughly the demands of potential customers to provide them with the highest quality of service Therefore, it is necessary that Magestore should analyze deeply the customers to find out their favorites, habits of shopping, trends… and foresee all the upcoming difficulties As a result, Magestore should frequently carry out the survey about demand and feedback of customers about the products The aims of the survey is to look for information from the 78 customers: Who are they, Where they from, How is their budget, What are their demands, What type or trend of product is their favourite, What channel they often use and, more importantly, Do they satisfied with the products etc Surely, each type of customers will have different bias channels or devices, which is used to find information about the products of Magestore Therefore, the company has to gather those information to classify customers and set up suitable method to provide information about Magestore 2.2 Management system and security With the high development of technology, setting up a management system is so important to Magestore that they have to first focus on Basically, the management system such as CRM, statistic analyzation, automatic marketing etc play an irreplaceable part in managing data neat and tidy However, information security is one of the biggest problems for not only Magestore but also every E - commerce company Therefore, Magestore should control the system strictly and frequently check the security of the system, find out and fix the bug as soon as possible This step is so important because the security in management system influences the trust of customers Nevertheless, setting up a system is not an easy work and it can be a burden on the company’s finance Therefore, the most suitable solution to this problem is to buy the default management system from some Omnichannel company such as Bizweb, Haravan… instead of setting up the system themselves By this way, Magestore can save their money as well as take advantage of the existing tools 79 CONCLUSIONS Research achievements This study contributes to both the theoretical and practical dimensions of analyzing organizational culture of a startup In the theoretical view, this study contributes to the understanding of what organizational culture is, how it was formed and developed in the and how the three levels of corporate culture are like in context of startup AhaMove, following the model of Edgar Schein In the practical view, this study maybe an useful reference document for the studied company (AhaMove) which desires to foster its corporate culture to gain higher employees’ job satisfaction and productivity Findings from this study will also significantly provide several positive contributions to many other startups in general and AhaMove in particular to actively change and improve organizational culture in the future Research limitations Some limitations should be taken into account when considering the results Like every research ever conducted, there will always be limitations on different aspects of the work The most easy-to-see limitation of this research is the lack of primary data in the form of wide questionnaires as the data obtained from interviews can be quite subjective Besides, those interviews conducted are mainly used for an exploratory descriptive purpose of the omnichannel strategy from Magestore’s view as a solution provider And it is impossible to see the outcomes of the thesis as fixed on the company as its products are constantly improved Secondly, within the time-span of the internship and research process, it is difficult to obtain and analyse a meaningful amount of data And, for the company to listen and act accordingly to the suggestion of the research is not feasible due to the typical characteristics of software development which requires intensive resources and concentration Suggestions for future research In the future, the author may continue the research by digging deep into only one specific product that Magestore is offering to analyze its suitability for the 80 market requirements and suggest the improvements possible By doing deep research, the author believes the outcome can be of more realistic use to Magestore management board and also stakeholders relevant to the purpose of the thesis 81 ... (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... OVERVIEW OF OMNICHANNEL STRATEGY 1.Definition of omnichannel strategy 2.The development of omnichannel 2.1 The transition fro 2.2 The transition fro 2.3 Comparison of th Omni- channel. .. the definitions, concepts, theoretical methods of Omnichannel · Assessing the necessity of Omnichannel retailing and Omnichannel strategy · · Retailers that purchased Magestore? ??s omnichannel