Cải thiện chất lượng dịch vụ: Yếu tố thành công cho nhà bán lẻ hiện đại Việt Nam trong thị trường năng động

Nội dung text: Cải thiện chất lượng dịch vụ: Yếu tố thành công cho nhà bán lẻ hiện đại Việt Nam trong thị trường năng động

1. IMPROVING SERVICE QUALITY: THE KEY SUCCESS FACTOR FOR VIETNAMESE MODERN RETAILERS IN A DYNAMIC EMERGING MARKET CẢI THIỆN CHẤT LƯỢNG DỊCH VỤ: YẾU TỐ THÀNH CÔNG CHO NHÀ BÁN LẺ HIỆN ĐẠI VIỆT NAM TRONG THỊ TRƯỜNG NĂNG ĐỘNG Assoc Prof , Nguyen Thi Bich Loan PhD, Pham Trung Tien Thuongmai University Abstract The paper provides overview of the Vietnam retail industry prospects; the global consumption trends and reviews the development of modern retailers in Vietnam. Introduced in 2005, supermarkets and convenience stores have rapid development in Vietnam as modern retail channels. However, the Vietnam retail market has been dominated by traditional stores. This paper compares the two retail channels in combination with explanation of global consumption trends and Vietnam retail sector prospects. Providing superior service quality is identified as the key success factor for Vietnamese modern retailers in competition with traditional retailers. Consequently, major recommendations are suggested to improve service quality in Vietnamese modern retailers. Keywords: Service quality, Retail market, Modern Retailers, Vietnam Tóm tắt Bài viết phân tích các xu thế tiêu dùng mang tính toàn cầu, cũng như tiềm năng, lợi thế phát triển và xu thế phát triển của thị trường bán lẻ Việt Nam hiện nay và trong tương lai gần. Trong bối cảnh đó, bài viết giới thiệu quá trình phát triển của kênh bán lẻ hiện đại tại Việt Nam: các siêu thị/trung tâm thương mại (supermarkets/commercial center) và các cửa hàng tiện ích (covenience stores). Các điểm mạnh và điểm yếu của các cửa hàng bán lẻ hiện đại trong tương quan so sánh với các cửa hàng truyền thống được tổng hợp và phân tích. Trên cơ sở những phân tích đó, chất lượng dịch vụ được xác định là yếu tố then chốt đảm bảo sự thành công của kênh bán lẻ hiện đại tại Việt Nam. Từ đó, bài viết đề xuất một số giải pháp chủ yếu cho các cửa hàng bán lẻ hiện đại, trọng tâm là các siêu thị, nhằm nâng cao chất lượng dịch vụ, đảm bảo lợi thế cạnh tranh với phương thức bán lẻ truyền thống, cũng như phát triển ổn định trong bối cảnh và xu hướng bán lẻ Việt Nam hiện nay. Từ khóa: Chất lượng dịch vụ, Thị trường bán lẻ, Nhà bán lẻ hiện đại, Việt Nam Introduction Vietnam’s retail market has been viewed as one of the most attractive retail markets in the world with a high annual growth rate with many advantages such as: a young 450
2. population; increasingly substantial purchasing potentials, rapid economy growth rate, and significant urbanisation. Started in 2005, Vietnamese supermarkets and convenience stores have played a growing role in the retail industry as modern retail channels. This paper reviews the development of the Vietnamese modern retail channels, compares these modern retail outlets with traditional stores. Strengths and weaknesses of modern retailers in competing with traditional stores are identified. Based on these analysis, service quality is identified as the key success factor and recommendations are suggested for Vietnamese modern retailers to improve their service quality. Global consumption trends and Vietnam’s retail sector prospects The global retail market has been positively projected with improvement of consumers confidence (the Global Consumer Confidence Index reached the peak levels of 106 points in the third quarter of 2018). Customers are believed to be more and more optimistic about their job prospects and personal finances (The Conference Board and Nielsen, 2018). It is observed that the global retail landscape has been evolving by three major driven forces. First, the rapid development of the Internet and e-commerce have caused radical changes in the retail industry. Customers have broader access to different retail channels (physical stores, click-and-collect stores, pop-up shops, and online shopping) and have more power over retailers. Second, there are a growing trend of shift towards convenience channels. Small and well-located stores are more favourable than large-scale commercial centers and hypermarkets. Third, customers are more and more concerned about products’ quality and safety (Nielsen, 2018). Vietnam’s retail market has been viewed as one of the most attractive retail markets in the world with a high annual growth rate (see Figure 1) (Deloitte, 2019). In the Global Retail Development Index 2017 reported by A.T. Kearney, Vietnam ranked 6th as an emerging and potential market for retail expansion (A.T. Kearney, 2017). Moreover, many advantages that favor the development of retail sector in Vietnam. Vietnam had a population of 93.7 millions in 2017, with a steady rate of increase around 1.06% annually; it is predicted to reach over 105 million in 2030 (GSO, 2017). It is apparent that the bigger the population, the more opportunity for the development of the retail market. There is significant growth in people living in cities, from 24 percent in 2008 to 32 percent in 2013, 35 percent in 2017 and projected to be 45 percent by 2020 (GSO, 2017). Also, there is an emerging middle class, accounting for 13 percent of the population in 2017 and expected to reach 26 percent by 2026. (World Bank, 2018). Vietnamese consumers have become more and more confident. In the third quarter of 2018, Vietnam peaked with its highest ever position of the Global Consumer Confidence Index with 129 points, ranked 2nd in 64 ranked economies worldwide (The Conference Board and Nielsen, 2018). 451
3. Figure 1: Retail revenue and growth in Vietnam 2013-2020 Source: Deloitte (2019, p. 4) In addition, Vietnam has a young population with 70 percent of the population under 35 years old, approximately 70 per cent of Vietnamese population in the age range 15 to 64 (GSO, 2017). Therefore, the young population can be considered one of the most important advantages that has contributed to the development potential of Vietnam’s economy and Vietnam’s retail sector. Overview of Vietnamese modern retail channels According to Regulations of supermarkets and commercial centers, issued by the Ministry of Commerce in 2004, Vietnamese retailers are classified as: modern retailers (supermarkets, hypermarkets/commercial centers, and convenience stores) and traditional retailers (medium-sized street shops, smallstreet shops, wet markets). Vietnamese supermarkets are grouped into two categories: general merchandise supermarkets and specialty supermarketsand are defined by four major characteristics: Total areas: more than 500 square meters (general merchandise supermarkets) and more than 250 square meters (specialty supermarkets). Merchandise variety: more than 4000 items (general merchandise supermarkets) and more than 500 items (specialty supermarkets). Facilities: Cleanliness, safety and convenience; parking area available; toilets available, customer’s locker areas. Merchandise activities: convenient merchandise display, modern product stocking/inventory, modern trading methods (self-service, self-checkout, electronic/card payment ). Hypermarkets/commercial centres are regulated as large-scale general merchandise supermarkets with total area more than 10,000 square meters and may provide such extra services as: office-leasing, convention centers, entertainment complex, restaurants (Vietnam Ministry of Commerce, 2004). Convenience stores (also labeled as “Minimarts” in Vietnam) are defined as small stores, located near a residential area, open long hours seven day a week, and carry a limited line of high turnover goods (Kotler, 1997). 452
4. Supermarkets and convenience stores are recognised as modern retail outlets (or modern trade channels) because of their identical modern merchandise activities in comparison with traditional stores: centralised checkouts exits; applications of scanning equipment; fixed and clearly price display; and convenient and departmentalised product layout (McDonald, Darbyshire & Jevons, 2000). The first supermarket, Minimart Hanoi, was opened in 1995, and about 70 more supermarkets were established in Hanoi soon after (Vietnam Investment Review, 1995). Since then, supermarkets have steadily developed in terms of number and size. According to statistics from the General Statistics Office, in 2017, Vietnam had 958 supermarkets, 188 commercial centres and 8,580 traditional markets (GSO, 2017). Supermarkets with broad product variety, clear price tags, self-service, modernity and comfortability have been increasingly favored by Vietnamese consumers, especially by the younger generation. Maruyama and Trung (2007a) stated that supermarkets played an important role in the change in Vietnam’s retail industry. These authors also identified factors that favoured the development of supermarkets in Vietnam: increases in income; urbanisation; consumers are younger and more knowledgeable; weakness of traditional markets; and support from the Government (Maruyama & Trung, 2007a). Vietnamese supermarkets are usually small in size with relatively limited variety and they do not have adequate distribution centers for goods. They have also developed without strategic and systematic planning (Maruyama & Trung, 2007a). Like other developing countries, supermarkets in Vietnam have limitations caused by distribution systems, traditional retailers and government activities (Reardon & Hopkins, 2006; Maruyama & Trung, 2012). Vietnamese supermarkets have to challenge the dominant traditional retailers with competition on price, convenience, product quality and safety (Reardon & Hopkins, 2006; Minten, 2008). In Vietnam, supermarkets have focused on middle-class to upper middle-class income customers because of their higher opportunity cost of time, access to storage space and transportation options (Nguyen et al, 2007). People from these classes are value-driven rather than price or quality-driven. They enjoy shopping in supermarkets with a wide variety of products, self-service, fixed and clear pricing, cleanliness, orderliness etc. Whereas lower-income groups prefer traditional stores with lower prices, and other attributes such as extension of credit, personal attention given to customers and social interactions (Maruyama & Trung, 2012). Comparison between modern retailers and traditional stores Several factors influencing shopper’s behavior and battle between modern and traditional trade channels have been identified as: First, urban shoppers have less time, live in crowded cities with heavy traffic congestion. They also live further away from their workplace due to cities’ rapid and substantial expansion. Second, Vietnamese consumers are more concern about saving and minimising wastage. Therefore, they tend to shop more frequently with fewer items that allows them reduce the amount of perishable thrown away. Third, there is a growing trend that health and wellness are putting at top-of-mind 453
5. priority for Vietnamese consumers in their purchasing decisions. Consequently, retail stores may perceive the increasing trend of high-quality products and trusted brands are more and more favored by their customers. Finally, Vietnamese retail sectors have witnessed growing trend of e-commerce or online shopping that could be considered as the most important game-changer in the near future (Nielsen, 2018). It is apparent that after more than two decades of development, supermarkets have played a growing role in the Vietnamese retail industry. However, there are still many limitations that need to be overcome for Vietnamese supermarkets to fully develop their opportunities and effectively compete with traditional stores. Traditional trade channel has been dominating Vietnamese retail market, especially in rural areas. In 2018, supermarkets and convenience stores accounted for 19 percent in urban areas and only 2 percent in rural areas (see Figure 2). Figure 2. Market share of different trade channels in Vietnam 2018 Source: Kantar Worldpanel, 2018 It is widely known that a retailer meets its financial objectives, satisfies customer’s needs and competes in retail markets using retail mix strategies, the combination of six elements: merchandise management; pricing; location; customer services and selling; store layout and design; and advertising and promotion (Dunne et al., 2011; Levy et al., 2014). In the Vietnamese retail market, Maruyama and Trung (2007b) conducted a comparison between supermarkets and traditional retailing and concluded that Vietnamese customers, even in the middle or high income classes, tended to buy fresh products at traditionally organised markets or informal bazaars (more than 90 percent of the 409 respondents). Vietnamese supermarkets tended to focus on “dry goods, packed and processed foods, and non-food goods” and had a relatively small variety of fresh foods (Maruyama & Trung, 2007b, p.239). The authors also found that traditional markets had a competitive advantage over supermarkets in freshness, price and convenience (distance) (Maruyama and Trung, 2007b). In addition, Vietnamese supermarkets still had to address the issue of customer loyalty. Maruyama and Trung (2007b) found that among supermarket shoppers, only 37 percent indicated that they were loyal to one supermarket. In their research focused on Vietnamese poor consumers, Figuie and Moustier 454
6. (2009) identified three main reasons for the choice of traditional food retailing shops, especially for poor customers: low prices, accessibility and credit opportunities. The authors compared advantages and disadvantages of supermarkets, official markets, informal markets, and street vendors. Vietnamese supermarkets have had to deal with challenges in their competition with traditional retailers. Supermarkets have been left behind on some major competition elements such as: price, freshness and location. The competitive advantages of supermarkets over traditional stores such as product variety and large shopping floor, may not be effective in Vietnam. Large-scale supermarkets were opened some distance from crowded suburban areas and they could not compete with traditional retail distributors (Maruyama & Trung, 2007b, 2012). Therefore, service quality can be considered as the most important competitive advantage for Vietnamese supermarkets in competition with traditional retailers (Figuie and Moustier, 2009; Maruyama & Trung, 2012). Recommendations for improving service quality in Vietnam modern retailers Parasuraman, Zeithaml and Berry (1985) introduced the definition of service quality “Service quality is a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customer expectations on a consistent basis” (Parasuraman, Zeithaml and Berry, 1985, p.42). Service quality has been recognised as one of the most important issues for business management because it contributes to customer satisfaction (Saraswat, et al., 2010; Thenmozhi and Dhanapal, 2010; Tanwar, 2013). Also, businesses that offer higher service quality can develop customer retention (Dabholkar et al., 1996; Lee and Yang, 2013), and customer loyalty (Sainy, 2010; Thenmozhi and Dhanapal, 2010). Excellent service results in “more new customers, more business with existing customers, fewer lost customers, more insulation from price competition, and fewer mistakes requiring the reperformance of services” (Berry, Parasuraman, and Zeithaml, 1994, p.32). In order to improve service quality, it is suggested that Vietnamese supermarkets need a long-term view and a systematic improvement process. The reasons were emphasized as: First, Vietnamese supermarkets need to define the supermarket’s service standards in as much detail as possible on the basis of customers expectations and the businesses’ value proposition. The standards help clarify employee’s roles and tasks, as well as providing the benchmark in evaluating service performance (Berry, Parasuraman and Zeithaml, 1988). Vietnamese supermarkets may use service quality measurement scores to develop their standards with more focus on the weak points. Also, it is suggested that Vietnamese supermarkets should inform customers of all or the essential points of their 455
7. service quality standards, that would help form customer’s quality expectations (Evans et al., 2008). Based on the service standards, Vietnamese supermarkets may consider developing a rulebook with firm’s core values, for example, excellence, mutual respect, and integrity which would help convince customers that the supermarkets are doing the right thing (Berry, 2001). Second, all service quality improvement efforts should commence with the top managers. The Vietnamese supermarkets should focus not only on customer contact personnel or team leaders but also all the high-ranking managers. It is suggested that all activities such as performance measurement, training, and incentives should include managers, who set the tone for all of these activities (Berry, Parasuraman and Zeithaml, 1988). Third, Vietnamese supermarkets should design and implement an adequate performance-measurement system. The service performance of every customer contact person should be regularly measured and compared with designed service quality standards. The results could be used as a basis for all other activities, such as training; recognitions and rewards; promotions; discipline or task switching; or even finally, jobs/contract terminations (Berry, 1986). Fourth, Vietnamese supermarkets should enhance knowledge and skills development for employees. Consequently, this should help to improve the level of service quality, especially Reliability and Responsiveness related items. To achieve higher efficiency, it is suggested that employees should be proactively involved in the development. The process should be designed on the basis of everyday practical issues that employees have to resolve. Customer contact personnel should participate in these sessions, raise the issues, discuss and practice the solutions and develop their skills and experience. Finally, Vietnamese supermarkets should pay more attention to service problems and customer’s complaints resolution. As Berry, Parasuraman and Zeithaml (1988, p.43) concluded “Investment in quick, competent, and courteous problem resolution is one of the most effective steps a service organization can take to build a quality reputation”. REFERENCES 1. A.T. Kearney, 2017, The 2017 Global Retail Development Index- The Age of Focus, viewed 27 Oct 2019, . 2. Berry, LL 1986, ‘Retail Businesses Are Service Businesses’, Journal of Retailing, Vol. 62, No. 1, pp. 3-6. 3. Berry, LL 2001, ‘Improve service by acting small’, Managing Service Quality, Vol. 11, No. 2, pp. 75-79. 4. Berry, LL, Parasuraman, A & Zeithaml, VA 1988, ‘The Service-Quality Puzzle’, Business Horizons, Vol. 31, No. 5, pp. 35-43. 456
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