Gearing Towards Omnichannel Grocery Retail Through Business Model Innovation

Technological innovations and the advent of digitalization have led retail business into one of its biggest transformations of all time. Consumer behaviour has changed rapidly and the customers are ever more powerful, demanding, tech-savvy and moving on various plat-forms. These attributes will continue to drive the development and robustly restructure the architecture of value creation in the retail business. The largest retail category, grocery yet awaits for a real disruption, but the signals for major change are already on the horizon. The first wave of online grocery retail was introduced in the mid 1990’s and it throve until millennium. Many overreactions, heavy investments and the burst IT-bubble almost stag-nated the whole industry for a long period of time. The second wave started with a venge-ance around 2010. Some research was carried out during the first wave from a single-viewpoint of online grocery retail, but without a comprehensive approach to online-offline business model integration. Now the accelerating growth of e-business has initiated an increased interest to examine the transformation from traditional business models towards e-business models and their integration on the companies’ traditional business models. This research strove to examine how can we recognize and analyze how digitalization and online channels are affecting the business models of grocery retail, by using business mod-el canvas as an analysis tool. Furthermore business model innovation and omnichannel retail were presented and suggested as potential solutions for these changes. 21 experts in online grocery industry were being interviewed. The thoughts of the informants were being qualitatively analysed by using an analysis tool called the business model canvas. The aim of this research was to portray a holistic view on the Omnichannel grocery retail business model, and the value chain, in which the case company Arina along with its partners are operating. The key conclusions exhibited that online grocery retail business model is not an alterna-tive model nor a substitute for the traditional grocery retail business model, though all of the business model elements are to some extent affected by it, but rather a complementary business model that should be integrated into the prevailing, conventional grocery retail business model. A set of business model elements, such as value proposition and distribu-tion channels were recognized as the most important ones and sources of innovation within these components were being illustrated. Segments for online grocery retail were empiri-cally established as polarized niche markets in contrast of the segmented mass-market of the conventional grocery retail. Business model innovation was proven to be a considera-ble method and a conceptual framework, by which to come across with new value proposi-tions that create competitive advantage for the company in the contemporary, changing business environment. Arina as a retailer can be considered as a industry model innovator, since it has initiated an entire industry in its market area, where other players have later on embarked on, and in which the contributors of the value chain, such as Posti depend on it to a great extent. Consumer behaviour clearly affects and appears everywhere in the digi-talized grocery trade and it drives customers to multiple platforms where retailers need to be present. Omnichannel retail business model was suggested to be the solution, in which the new technologies are being utilized, contemporary consumer behaviour is embedded in decision-making and all of the segments and their value propositions are being served seamlessly across the channels.

NEGOTIATING IN FINNISH GROCERY RETAIL - Negotiation Narratives of S-group, Kesko and Lidl

In this research retail negotiations are explored through the question: What characteristics are distinctive to negotiating in Finnish grocery retail trade? To shed light on the research question I interviewed experienced retail negotiators and mapped out the most important characteristics of the retail negotiations. I described through examples the most prominent challenges negotiators face in their negotiations and elaborated what kind of tools the experienced negotiators use to overcome those challenges. The research results add up to a groundwork frame for retail negotiations with which further research can be more easily directed to any area of interest in the Finnish grocery retail negotiations. The framework can give ideas or frames for further research, or function as a general guideline of factors to consider when negotiating in Finnish retail field. The results were divided into 3 sections: Characteristics, Challenges and Tools. Different negotiation models help negotiators and researchers understand negotiation dynamics. This research adds to that pool by focusing on elements essential to consider specifically in the context of Finnish retail. Finland offered an exceptionally interesting setting to study negotiation, as grocery retail trade in Finland is highly centralized. Especially for those interested understanding a centralized setting such as Finland’s retail field, the framework presented in this research might provide a valuable spectrum of essential negotiation elements. Learning is a lifelong process, but that path can be evened by tuning in on what others have learned during their own endeavors in similar situations. Seasoned negotiators have many stories to tell about negotiating that can be drawn upon and by doing so, we can avoid having to spend time learning the same insights twice. This research drew on narrative, case-research and interviewing to find out how seasoned negotiators in the field of Finnish retail experienced negotiation, what challenges negotiations pose and what tools can be used to overcome them

What Makes Online Grocers Work? A Case Study Analysis of Factors Contributing to Online Grocery Store Profitability

This research examined the factors contributing to the performance of online grocers prior to, and following, the 2000 dot.com collapse. The primary goals were to assess the relationship between a company’s business model(s) and its performance in the online grocery channel and to determine if there were other company and/or market related factors that could account for company performance. To assess the primary goals, a case based theory building process was utilized. A three-way cross-case analysis comprising Peapod, GroceryWorks, and Tesco examined the common profit components, the structural category (e.g., pure-play, partnership, and hybrid) profit components, and the idiosyncratic profit components related to each specific company. Based on the analysis, it was determined that online grocery store business models could be represented at three distinct, but hierarchically, related levels. The first level was termed the core model and represented the basic profit structure that all online grocers needed in order to conduct operations. The next model level was termed the structural model and represented the profit structure associated with the specific business model configuration (i.e., pure-play, partnership, hybrid). The last model level was termed the augmented model and represented the company’s business model when idiosyncratic profit components were included. In relation to the five company related factors, scalability, rate of expansion, and the automation level were potential candidates for helping to explain online grocer performance. In addition, all the market structure related factors were deemed possible candidates for helping to explain online grocer performance. The study concluded by positing an alternative hypothesis concerning the performance of online grocers. Prior to this study, the prevailing wisdom was that the business models were the primary cause of online grocer performance. However, based on the core model analysis, it was hypothesized that the customer relationship activities (i.e., advertising, promotions, and loyalty program tie-ins) were the real drivers of online grocer performance.

Customer Loyalty toward grocery retailing service: a multidimensional approach to costumer perceived value

Structured abstract Purpose: To deepen, in grocery retail context, the roles of consumer perceived value and consumer satisfaction, as antecedents’ dimensions of customer loyalty intentions. Design/Methodology/approach: Also employing a short version (12-items) of the original 19-item PERVAL scale of Sweeney & Soutar (2001), a structural equation modeling approach was applied to investigate statistical properties of the indirect influence on loyalty of a reflective second order customer perceived value model. The performance of three alternative estimation methods was compared through bootstrapping techniques. Findings: Results provided i) support for the use of the short form of the PERVAL scale in measuring consumer perceived value; ii) the influence of the four highly correlated independent latent predictors on satisfaction was well summarized by a higher-order reflective specification of consumer perceived value; iii) emotional and functional dimensions were determinants for the relationship with the retailer; iv) parameter’s bias with the three methods of estimation was only significant for bootstrap small sample sizes. Research limitations:/implications: Future research is needed to explore the use of the short form of the PERVAL scale in more homogeneous groups of consumers. Originality/value: Firstly, to indirectly explain customer loyalty mediated by customer satisfaction it was adopted a recent short form of PERVAL scale and a second order reflective conceptualization of value. Secondly, three alternative estimation methods were used and compared through bootstrapping and simulation procedures.

Communication strategy for Continente online store: improving the Ecommerce experience

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Socially integrative customer service (SICS) : identification of a symbiotic link with corporate social responsibility

The aim of this study is to answer the research question "can customer service be revitalised through identification of a symbiotic relationship with social responsibility, linked by people-centricity?" The concept of customer service remains weak and there has been a lack of attention to the underlying purpose: "to serve". To strengthen the theory the humanistic nature of the concept should be revised. Fundamental to this argument is the question of who is a customer? To fully discover the scope of the concept requires a broader or more specifically a societal view. Herein the theme of social corporate responsibility is critical to the recognition of the customer service network (CSN). This suggestion in isolation is useful but structural. Another aspect must be identified to validate the "service" ethos. Through this reasoning the relational theme (RT) provides for a mechanism for this to be achieved. Therefore the theory of socially integrative customer service is based on broadening and deepening the customer service concept. This study is illustrated in the context of the grocery retail sector in the Republic of Ireland. Four case studies are presented, three based on company-wide and in-store research and a fourth is a cross-company study. Results across companies indicate acceptance of the research question and show evidence to validate SICS. There is scope to further develop SICS and to build on the CSN and the RT. Finally the concept of SICS provides for a diverse basis for further research. This theory does no purport to cause a paradigm shift but does add innovation to the body of knowledge. As is the hallmark of good theoretical development, the author has aimed to keep the philosophy simple.

Tavoitevarastoarvojen määrittäminen uusille tuotteille - case: päivittäistavarakaupan yritys

Tämän tutkielman tarkoituksena oli löytää keinoja uusien tuotteiden tavoitevarastoarvojen määrittämisen helpottamiseksi case-yrityksessä. Ongelma on seurausta siitä, ettei uusille tuotteille ole saatavissa kysyntädataa. Oikeelliset tavoitevarastoarvot on tärkeitä case-yritykselle hävikin minimoimisen ja erityisesti asiakastyytyväisyyden vuoksi. Tutkittavaa aihetta lähestyttiin päivittäistavarakaupan strategisten menestystekijöiden sekä varastonhallinnan kautta. Teoriaosuuden pohjalta toteutettiin empiirinen osio, jossa etsittiin case-yrityksen kahden tuoteryhmän kysyntää selittäviä tekijöitä paneeliregression avulla. Ensin kuitenkin tutkittiin tuoteryhmien yleistä kysynnän rakennetta erilaisten kysyntäkuvaajien sekä korrelaatiomatriisien avulla. Tavoitevarastoarvoon eniten vaikuttava tekijä on kysyntä. Brändi ja hinta muodostuivat puolestaan vahvimmiksi kysyntää määrittäviksi muuttujiksi. Kysyntää arvioitaessa muut sitä nostavat muuttujat tulee aina miettiä tapauskohtaisesti. Mehukeitoilla kysyntää nostivat eniten vahva brändi ja suuri pakkauskoko. Juustoraasteilla puolestaan alhainen hinta ja pieni pakkauskoko olivat keskeisimmät myyntiin vaikuttavat tekijät. Tuoteryhmien muut kysyntää nostavat ominaisuudet olivat samoja, kuin tuoteryhmän suosituimmilla tuotteilla.

Managing Finnish-Russian Business Relationships and Networks During Conflicts

This thesis examines management of business relationships during conflicts. The context of this study is the international political conflict which started in 2013 and is still affecting international trade relations in 2016. More specifically, this study researches the effects of the conflict in Finnish-Russian trade. The research aim is to identify the implications of a political conflict in the Finnish-Russian business relationships and networks. Furthermore, the study will explore how does a company adapt or overcome the challenges and barriers posed by the international business environment. This research combines relevant theories in management of business relationships and networks in order to review the research data through a critical research frame. The theoretical frameworks are different structures of business relationship development processes, various stages of interaction, and characteristics and functions of business relationships. Moreover, this study will examine the effect of interdependency, commitment and trust in trade relations. Also, what are the important exchange processes and how do these processes affect business relationship and overall performance of joint business operations. Qualitative single case study method was used in this research. Case company was a Finnish multinational company. To understand the changes, the data was collected and analysed through process research approach by pattern-matching and drawing temporal bracketing over two different periods of time, first period in years 2011-2013 and second period in years 2014-2016. Empirical data was collected through a semi-structured interview and additional data was collected from internal and external secondary data sources. The findings of the study confirmed the relationship between trade and conflict. However, the effects are not significant for a company in grocery retail industry which has had earlier experience in Russia and has managed its business relationships and operations effectively. Macroeconomic factors affect companies operating in foreign dynamic markets and in order to sustain changes and to adapt, companies should invest in their business relationships. Trust-based relationships and a higher level of commitment allow companies to have more efficient and beneficial outcomes before and during uncertainty. Furthermore, well-maintained and coordinated business relationships provide the ability to adapt and overcome challenges during uncertainty. Such relationships have information, financial and social exchange processes which allow the partnering firms to have successful business relationship management in dynamic market environments.

Report on an inquiry into the rates of wages, hours, and degree of industrial organisation in the wholesale and retail grocery and provisions trade in England and Wales.

At head of title: Ministry of Labour.

Management problems in retail grocery stores.

Mode of access: Internet.

The structure and development of Russia's food retail sector from the point of view of Finnish food industry

Tämän diplomityön tavoitteena on selvittää Venäjän ruoan vähittäiskaupan rakenne ja sen tuleva kehitys. Tällä hetkellä se on yksi maailman nopeimmin kasvavista markkinoista. Kasvun syynä on korkea öljyn hinta, jokaon kumuloitunut ihmisten palkkoihin. Kuitenkin vaikka tulot kasvavat, ruokaan käytetty osuus tuloista on pysynyt suhteellisen vakaana. Kulutus on siis siirtymässä laadukkaampiin ja arvokkaampiin tuotteisiin Modernien kauppojen osuus markkinoista on vielä pieni, koska Venäjän vähittäiskauppasektori on yhä hajaantunut perinteisiin kauppaformaatteihin kuten kioskeihin, toreille ja pieniin ruokakauppoihin. Kauppaketjut ovat kuitenkin tulossa merkittävämmiksi. Suurin markkina-alue vähittäiskauppiaille on Moskova, mutta tällä hetkellä ketjut laajentavat toimintojaan nopeasti myös muille Venäjän alueille. Parhaat kasvunäkymät ovat alueilla, vaikka Moskovan markkinat eivät olekaan kyllästyneet. Tärkein kasvua rajoittava tekijä Moskovassa on rakennustonttien ja kiinteistöjen saatavuus. Vähittäiskauppamarkkinat lähestyvät kyllästymispistettä, josta seuraa markkinoiden konsolidaatio. Tämä prosessi on jo alkanut, mutta kovin paljon yritysostoja ei ole vielätehty. Toistaiseksi kauppaketjut ovat tyytyneet muodostamaan alliansseja. Ketjut pyrkivät parantamaan asemaansa hintaneuvotteluissa muodostamalla osto-alliansseja, luomalla omia brändejä ja käyttämällä alueellista laajentumista lyömäaseena. Jotta ruoan tuottaja pääsisi myös alueellisille markkinoille, on sen ehkä suostuttava myymään tuotteitaan edullisempaan hintaan. Tavarantoimittajat ovat vahvassa asemassa silloin, kun heillä on toimiva jakeluverkko, kyky JIT-toimituksiin,kunnollinen dokumentaatiokäytäntö, vahva brändi ja edullinen hinta. Ns. listausmaksun suuruus voi määrittää tuottajan tuotteilleen saaman hyllytilan koon.

Russia's food retail sector from the point of view of Finnish food producers

This research paper focuses on the Russian food retail sector and its structure and development. At the momentit is one of the fastest growing markets today with 12.1% growth last year (2004). The growth originates from high oil price, which has been accumulated to people's wages. They are growing nominally more than 20% annually. But even though the income increases, the share of food of all retailtrade has been fairly stable with only a slight decline. Thus, the consumption is shifting to products with more quality and value. The shareof modern retail outlets is low, as the Russian retail sector is still very dispersed to traditional retail outlets such as kiosks, open markets and small grocery stores. The store chains are, however, becoming more and more significant. The biggest market for retailers is Moscow but nowadays the chains are expanding rapidly into other regions. Even though the markets have not been saturated in Moscow, the best prospects for growth are in the regions. The most important factor restricting the growth in Moscowis the availability of real estate and land plots for stores. The market is moving forward to saturation, and a consolidation process will follow. In fact, it has already started but not many acquisitions have been made so far. To this point the domestic chains have settled to form only alliances. The foreign players will be very strong in the tightening competition in the future. The problem of domestic chains is that the stores are nonstandardized, which is not cost-efficient. The chains are trying to enhance their power in price negotiations by forming purchasing alliances, introducing private label goods and using the regional expansion as a striking weapon. In order to follow the growing chains to other regions the producer must sell its products to the chains at favorable terms. Suppliers are strong in negotiations when they have a functioning distribution network, ability to JIT deliveries, proper documentationpolicies, a strong brand, reliability in deliveries and a fair price. The size of the entry ticket, i.e. the listing fee may define the shelf space a producer gets in the stores.