The Expectations Of Targeted Customer Segments Towards Food-Logistics-Services For Online Grocery Shopping. An Empirical Analysis with Recommendations for Action


Bachelor Thesis, 2018

106 Pages, Grade: 1,5


Excerpt

Table of Contents

1 INTRODUCTION
1.1 Description of the Initial Situation and Study Overview
1.2 Research Questions and Methodology
1.3 Objective and Structure of this Thesis

2 DEFINITION AND CLASSIFICATION OF BASIC TERMINOLOGY
2.1 T ransportation
2.1.1 Transport Vehicles
2.1.2 Transport Gadgets
2.2 Food Retail Trade
2.2.1 Definition
2.2.2 Distribution-Types and Business Models within the Food Retail Trade
2.3 Electronic Business
2.3.1 E-Business Relationships
2.3.2 Electronic Commerce
2.4 Online-Food-Retailing
2.4.1 Definition
2.4.2 Business Models
2.4.3 German Online-Food-Retailing

3 RESEARCH DESIGN OF THE APPLIED METHODOLOGY
3.1 Research Questions and Hypotheses
3.2 Data Acquisition.
3.2.1 First Question Pool - Core Fundamentals
3.2.2 Second Question Pool - Demographic Properties
3.2.3 Third Question Pool - Evaluation of Aspects
3.2.4 Selection of Sample
3.3 Methodology of Data Analysis
3.3.1 Development of Data
3.3.2 Development of Preliminary Expectation
3.4 Methodology of Examination
3.4.1 Requirements of Ordinal Logistic Regression
3.4.2 Cross-pair Com parisons
3.5 Development of Recommendations
4 DATA ANALYSIS
4.1 Quota-Scheme Sample
4.1.1 Gender and Age Groups
4.1.2 Household Properties
4.1.3 City and Community types
4.1.4 Core Fundamentals
4.1.5 Awareness
4.2 Selection of Expectation - Confidence Intervals
4.2.1 Delivery
4.2.2 Marketing
4.2.3 Service
4.2.4 Price
4.3 Identified Expectations, affecting Properties and Assumption Testing
4.3.1 Delivery
4.3.2 Marketing
4.3.3 Service
4.3.4 Price
4.4 Cross-Pair Comparisons of Properties
4.4.1 Delivery
4.4.2 Marketing
4.4.3 Service
4.4.4 Price

5 RECOMMENDATIONS TO COMPENSATE THE EXPECTATIONS
5.1 Delivery
5.2 Marketing
5.3 Service
5.4 Price

6 DISCUSSION
6.1 Discussion of Results
6.2 Critical Appraisal and Implications for follow-up Studies
6.3 Outlook for the Future

7 CONCLUSION

ANNEX
Appendix A
Questionnaire English
Questionnaire German
Appendix B
Confidence Interval
Appendix C
Frequencies of Independent Variables
Frequencies of Dependent Variables
Appendix D
Identified Expectations, affecting Properties and Assumption Testing
Appendix E
Cross-Pair Comparisons

DECLARATION OF AUTHENTICITY.

Abstract

In recent years, the food retail sector in Germany entered the market with a new business model, which can be called "online-grocery-shopping". Unlike in other European countries, this business model is still at its beginning and encounters some challenges to develop and scoop its potential entirely. The research status mostly seems to consider just the trader, but little to no emphasis is on the transport service provider. Especially the processes of them must ensure that sensitive groceries are handled and delivered with maximum care until the goods reach the final customer. Also, the German population is a sophisticated customer base, due to their high expectations regarding quality and service. Furthermore, the younger people are represented by high internet affinity, and they count as one of the present and future purchasing powers. This thesis utilizes a questionnaire to study 18-35-year old people regarding their expectations towards the transportation of groceries to contribute to the development of this business model. An assessment by the participants helps to identify the essential expectations. Since Germans are tough customers, an ordinal logistic regression contributes to examine the identified expectations further. This reveals which properties of the customer, whether these are of demographic or fundamental nature, are affecting the expectations. Further, cross-pair comparisons of these properties are executed to cross­check, how exactly is a property affecting an expectation. After this, based on the results, recommendations for action are stated as specific as possible to help the transport service provider compensate the identified expectations.

Keywords: Transport Service Provider, German Food Retail, Online-Grocery-Shopping, E-Commerce, Ordinal Logistic Regression

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Figures

Figure 1: Weights of Assortments in the Total Online Trade Consumption

Figure 2: Shares of Modes of Transport in Percent

Figure 3: Hierarchic Electronic Business

Figure 4: Data Acquisition

Figure 5: Sample Size Equation

Figure 6: Developments of Data and Preliminary Expectation

Figure 7: Confidence Interval Equation

Figure 8: Representation of Confidence Interval

Figure 9: Examination of Data and Expectations

Figure 10: Development of Recommendations

Figure 11: Sample in Respect to Age Groups & Gender

Figure 12: Sample in Respect to the Household Size

Figure 13: Sample in Respect to the monthly Household Net income

Figure 14: Sample in Respect to Household Constellation

Figure 15: Sample in Respect to City Types

Figure 16: Current Situation - Monthly Basis

Figure 17: Awareness per Product Type

Figure 18: Purchase Decision - Product Categories

List of Tables

Table 1: Distribution-Types and Business-Models

Table 2: Business Relationships

Table 3: Online-Supermarkets and Online-Specialty Markets

Table 4: Subscription Commerce

Table 5: Overview of Population

Table 6: Quota-Scheme

Table 7: Product Types

Table 8: Positive Aspects

Table 9: Negative Aspects

Table 10: Situational Aspects

1 Introduction

1.1 Description of the Initial Situation and Study Overview

It is not a new insight that every market, or moreover every business model, is undergoing a constant transformation and that suppliers of products and services need to adapt to the change. More current than ever is the topic of E-Commerce, which according to Metzger, Kollmann, and Sjurts (2018) is about the distribution of goods through various online platforms and is considered a part of E-Business. E-Commerce has been communicated in recent years as a decisive trend in the retail sector and statistics show that this sector generates more than 40 billion euros in Germany (cf. Statista, 2017). In addition to that, on the one hand, Handelsverband Deutschland (2014) claims the online non-food retail industry enjoys continuously dynamic growth whereas on the other hand, according to Rasch (2018), the German online food retailing is lagging behind.

While a study by Syndy (2015) indicates, that in other European countries such as in the UK and France can already be spoken of a significant business model with a market share of 4.4% and 3.6%, Germany can only achieve a market share of about 0.8% in online grocery shopping. In an interview, the managing director of AllyouneedFresh, one of the German online food providers, said that the market share increased to 1-2% in 2017, with a well over 10% growth each year (Graf, 2018a).

Numerous studies give a good summary of the state of research. A population survey by PWC (2018) demonstrates that consumer acceptance of this new business model is increasing, with more than 40% of German consumers planning to order groceries online within the next 12 months. A survey conducted by EY (2017) shows that 16% of consumers in Germany buy food online and that every 70th consumer makes half of their food purchases online.

Abbildung in dieser Leseprobe nicht enthalten

Source: (GfK GeoMarketing GmbH, 2015).

Figure 1: Weights of Assortments in the Total Online T rade Consumption.

As seen in Figure 1, the research of GfK GeoMarketing GmbH (2015) shows that by 2025, in absolute terms, all assortments should grow and the weights, or respectively the percentages, will shift within online sales. In the food sector, the rate is estimated to increase to a portion of 16%. Considering that, it is debatable why the providers of products and services cannot fully exploit the potential of E-Commerce within the field of ordering groceries. Furthermore, the development of other options to procure food such as the model of online grocery shopping would satisfy the consumer on so many levels according to the orientation of convenience. Wengler (2005) approves that consumers seek independence and comfort, where time is also considered precious and should not be wasted on unpleasant activities. Besides, Germans can be credited with Internet affinity, since around 81% of Germans categorize as Internet users (Statista, 2018b), and about 65% of Germans purchase online (EY, 2017). Due to the high willingness and the given openness concerning online shopping, German online purchases are continually rising (Santander Tradeportal, 2018).

Therefore, quite a few studies have been conducted about the online food trade, but these are solely with a focus on the trader or store. In these studies, insights were collected, but very rarely with a focus on the transport service provider. For example, a study by ATKearney (2016) shows that retailers are still unable to maintain the respective user base. A share of 23% of the online shoppers surveyed, said that service or quality was unsatisfactory and that around a quarter of those (26%) have stopped shopping for groceries online due to that. The research status seems uncertain about the fact that service, quality, and other factors, in this business model, are not just the responsibility of the dealer, but also include the transport service provider. Hörsken (2015) argued that the most significant challenge facing this business model is the delivery of sensitive goods such as groceries. For this specific reason, the present work will be limited to the logistics of the transport service provider and the expectations of the customer towards them.

To anticipate challenges and reduce consumers' reluctance to order groceries online, expectations should be identified and examined. Only then, transport service providers can adapt all operational processes to the needs of their customers, and the trade can secure that the expensive acquired online shoppers return for more orders. As already mentioned, for the first time about 81% of Germans use the internet, but still, 19% of Germans do not use the internet. Of that 19%, a share of 94% is over 50 years old (cf. Reuter, 2018, Initiative 21,2018). The following work will, therefore, deal exclusively with the younger population of Germany between 18-35 years of age. These are to be regarded as one of the present and the future purchasing power and are referred to as highly Internet-oriented and affine.

1.2 Research Questions and Methodology

To pave the way for a still developing and young business model such as the online­grocery-shopping, the expectations of targeted customer segments towards food­logistic-services with emphasis on the transportation service provider is a highly interesting topic. This Bachelor Thesis will deal with an analysis and discussion regarding this subject and will state further recommendations for action in respect to the transportation service provider. This approach raises three questions that should be clarified in the further course of the thesis:

1. What are the expectations of targeted customer segments towards food-logistic-services for online-grocery-shopping?
2. What kind of properties are affecting the expectations?
3. What can providers of food-transportation-services do to satisfy these expectations?

In order to answer the given research questions, an empirical analysis in the form of quantitative research was chosen. This primary research is based on an online consumer survey using standardized questionnaires. This type of data collection allows simultaneous survey conduction on many subjects in a short time and provides much information (cf. Orghandbuch, 2017). Also, all persons will find the same order and formulation of the questions. An online execution of the survey allows the start and the end to be at any desired time. Due to the high representation online of the consumer segment 18-35 years of age, the accessibility of the online survey is easy to perform. The localization of respondents is done by spreading the questionnaire through various online platforms and channels. These include Facebook, LinkedIn, the mailing list of the Rhine-Waal University of Applied Sciences and the personal periphery. To broaden the pool of potential interviewees, the survey is established in German as well as in English. As a tool www.umfrageonline.de is used, a commonly used website to do online surveys. The selection of the sample is based on the criteria age, gender as well as being resident in Germany.

1.3 Objective and Structure of this Thesis

Considering the initial situation, the actuality of the topic, and the problems regarding the non-existent emphasis on transport service provider and the delivery service, in the forthcoming scientific work, the expectation of the consumers for the transport service providers will be identified and further examined.

This is done to get a basic overview of the expectations of potential, or already existing customers. Afterwards, the investigation of the expectations is done to find out by which unique properties and in what way, these expectations are significantly affected. Given this, differences within these properties should be identified to be able to formulate the recommendations for action more specifically. This approach intends to optimize the future service orientation of the transport service provider and to establish this business model further.

To give this Bachelor thesis stringent reasoning, it is split into two parts. The first part of the thesis deals with stating theoretical fundamentals with the help of studies and numerous secondary materials. The second part is dedicated to the research including an online survey, and thus the obtained empirical data is analyzed and examined. This will identify the expectations and the affecting properties and secure a further development and growth of this business model, recommendations for action will be stated.

After the introductory chapter has shed light on the subject, further work on the topic will be conducted as follows: The following work is subdivided into a total of seven chapters. First, it is necessary to define and classify basic terminology of transportation, food retailing, E-Commerce and online-grocery-shopping in Chapter 2. This means that various terms throughout these topics are defined, and charts and figures out of secondary materials are used to clarify the subject further. Further, not content-related information associated with these topics are delimited. Subsequently, the third chapter emphasizes on the applied methodology. Therefore, the path on how to identify the sample is stated, the questionnaire and with it, its questions are described in detail, and the statistical methods used for the evaluation are further explained. The fourth chapter deals with the selection of the expectations and further examination of them. This examination is conducted with the help of the ordinal logistic regression. Based on the results and existing strategies of companies, recommendations for action are stated in chapter number 5. Concluding, chapter 6 consists of the central results of this work and therefore the expectations are discussed. Further, the work is critically examined, and an outlook for the future is given through further innovations. Lastly, chapter 7 states a brief conclusion about the most essential results found out in this study.

2 Definition and Classification of Basic Terminology

In the following chapter, the theoretical foundations necessary for a holistic understanding of the present work will be developed. For this purpose, distinctions and central terms such as transport, food retailing, E-commerce, and due to the combination of the latter - online grocery shopping - must be defined and classified for the investigated object of this thesis.

2.1 Transportation

In the following, the field of transportation will be examined more in depth. A differentiation can be made between various modes of transport. These include air, rail, road, sea, and pipeline (Etim, 2018). The Federal Statistical Office in Germany examined that in 2014 around 4.5 billion tons of goods were transported through these modes. The following Figure 2 shows the shares of mentioned modes of transportation in percentage from 2004 to 2014 (Hütter, 2016).

Abbildung in dieser Leseprobe nicht enthalten

Source: (Hütter, 2016).

Figure 2: Shares of Modes of Transport in Percent.

The previous graph indicates that with 70.8% of the transport services provided in 2014, road haulage is by far the most important representative of its class. A comparison of the modes, conducted by the Federal Statistical Office in Germany, shows that trucks are more likely to be used on shorter routes. Approximately half of all transports conducted accounted for local transport under 50 kilometers with an average of 132 kilometers (Hütter, 2016).

Essential for the present thesis is the national transportation on the road in the local field of transport. Accordingly, it will be limited thereto, and a definition will be given in the following paragraphs. For this purpose, the terms are to be defined independently from each other and then considered in summary.

“Road Transport means transportation of goods and personnel from one place to the other on roads. Road is a route between two destinations, which has been either paved or worked on to enable transportation by way of motorised and non-motorised carriages. There are many advantages of road transport in comparison to other means of transport. The investment required in road transport is very less compared to other modes of transport such as railways and air transport. The cost of construction, operating cost and maintaining roads is cheaper than that of the railways” (The Economic Times, 2018).

To add the national aspect, it is stated that the place of loading and unloading is located in the same country and the transportation is done by a vehicle registered in that country (Ec.europa.eu, 2018). According to Malina (2018), in the Federal Republic of Germany, the local road haulage is operated within the boundaries of the contiguous zone (areas of all municipalities with fixed local centers within a 75 km radius around the center of the municipality of the vehicle location).

A summarized, thesis-useful definition regarding road haulage in the local field is now formed as follows: The transport services implicit in road haulage are generally limited to the national transport of goods in Germany which does not exceed a radius of 75 km from the service provider (transport service provider or dealer delivery service).

2.1.1 Transport Vehicles

Further progression requires a description of the transport vehicles referred to in this thesis. These vehicles are mainly used by two of the most established players in this business model, which is reason enough to state the following information. The transport service provider "Deutsche Post DHL Group" and the dealer with its delivery service "REWE Group" are referred to.

First, the term hazard analysis and critical control point (HACCP) needs to be highlighted. Companies that are responsible for the manufacturing, handling, processing, storing, selling or the transportation of groceries must eliminate the influences, which contribute to the illness of human beings after eating food. Therefore, the HACCP-concept deals with the identification, evaluation, registration, and mastery of these hazards (BfR, 2005). Thus, every HACCP-concept aims to understand what the potential risks are and how to avoid them (BfR, 2005). Concluding, if vehicles used for the transport of groceries or transport boxes used to remain the groceries frozen are HACCP-proven, it is assured that there is little to no harm.

Starting with the refrigerating vehicles produced by Kiesling, a specialist in refrigerated bodies (Fruchtportal, 2014), and utilized by the number one online-supermarket REWE (Presse.rewe.de, 2016). These refrigerating bodies are HACCP-proven (Kiesling.de, 2015) . Maximum utilization of the loading room is provided since it is adjusted to the standard Euro measurements. The floor is impact-resistant and thus ideal for all kinds of cargo, whether crates of beverages or transport trolleys for boxes. Products that need no cooling can be stored in the back of the construction. Therefore, all kinds of groceries can be delivered directly to the customers' apartment door (Fruchtportal, 2014).

Since more often than ever environmentally friendly methods to reduce Co2-Emissions are utilized, the description of electric vehicles cannot be forgotten. The United States Code (2006) defines the term electric vehicle as “a vehicle which is powered by an electric motor drawing current from rechargeable storage batteries, fuel cells, or other portable sources of electrical current, and which may include a nonelectrical source of power designed to charge batteries and components thereof." Electric vehicles are often used as a synonym for an electric car, but trucks, buses, boats, bikes and so on can all be considered an electric vehicle (cf. Shahan, 2015). Since this work deals only with vehicles that operate road haulage and carry groceries in a local field, the "StreetScooter WORK XL" used by Deutsche Post DHL is of importance. DHL's factsheets about this vehicle extracted from the press kit (2017) state that they produced in collaboration with "Ford" an environmentally-friendly e-vehicle for parcel deliveries in large urban areas and further. Also, this box-type body, with its simple, robust design is equal to the vehicles usually used for delivering goods and therefore meets all the safety standards to deliver groceries. In the medium term, the company wants to replace the current fleet with street scooters (DHL Factsheet, 2017).

2.1.2 Transport Gadgets

The transport service provider Deutsche Post DHL Group and its subsidiary AllyouneedFresh relies for the transport of groceries on non-refrigerating vehicles and this is possible due to the help of HACCP-proven transport boxes and gadgets, which will be described in this subchapter (next-generation-food.de, n.d.).

Deutsche Post DHL Group claims that the "Multibox 2.0" is considered a revolution in food delivery and is thought-through for every process in the shipping chain from storage, over transport, to final cleaning (Dhlverpackungen.de, n.d.). It has been successfully tested for the requirements in the parcel network up to 31.5 kg and is thus well suited for the dispatch of food. The interior offers enough space for the delivery of food with a volume of 48 liters and is perfectly suitable for storage due to its standard dimensions.

Also, numerous accessories can compensate for the different requirements food can have and ensure flexible use. Therefore, DHL states that efficient cooling batteries for refrigerated goods, depending on the number of cooling batteries, can cool the groceries for up to 48 hours (Dhl.de, n.d., a). Further, common dividing walls, as well as isolated ones are used to ensure flexibility in the goods that can be delivered.

2.2 Food Retail T rade

The retail food trade will be described first, and critical figures or respectively a brief introduction to the subject will be given. Subsequently, the definition of the concept of trade is considered from the functional and the institutional point of view. After that, in contrast, the trade of the wholesaler is demarcated, and the focus on the B2C aspect is set. To form a descriptive transition towards the term “Food Retail Trade”, the term “food” itself is discussed briefly. Lastly the different most crucial business models shall be presented.

2.2.1 Definition

In Germany, food retailing is one of the most critical sales sectors for the food industry. A constant supply for the consumers with food, handled by approximately 110,000 enterprises, indicates a high branch density. Thus the performance is only possible through the intensive cooperation of the food chain and complex logistics (Bve-online.de, 2018). The market is being taken over by four large companies Edeka, Rewe, Schwarz (Lidl and Kaufland) and Aldi, which hold 69,1% of the market shares and sales in food retail amounted to 242,5 billion euros in 2017 (Statista, 2018c). The following chapters show how this market is structured precisely.

Trade in a functional sense means that economic subjects can increase their wealth by giving higher value to the good they receive compared to the good they exchange. Other market participants acquire the obtained goods and subsequently sell them to third parties, without further treatment or processing (except the usual storing and cooling). In practice, the term is restricted to the exchange of tangible assets (Einzelhandel.de, 2018).

Trade in the institutional sense results from the previous functional consideration. These include the companies that carry out this task. Besides, in official statistics, a company or a business is then assigned to trading if the trading activity itself results in higher value added than from several other processing activities (Einzelhandel.de, 2018).

Since the present work is limited to the retail trade, the term "wholesale" is demarcated. Besides, the thesis is limited to the Business-to-Consumer (B2C) aspect and therefore, by the aid of a definition, the contrary Business-to-Business (B2B) shall be distinct as well.

The demarcation criterion concerning wholesaling and retailing is the position of the company between the manufacturer and the user or respectively the end customer within the supply chain (cf. Hörsken, 2015). The wholesaler operates between producers, retailers, bulk buyers and other traders and is responsible for processes such as assortm ent, distribution, and warehousing. This position in the supply chain is also described as Business-to-Business (Der Deutsche Groß- und Außenhandel: Fakten und Trends, 2016). According to Hörsken (2015), retailers, on the other hand, account for private households among their customers, which in turn is described as a Business-to- Consumer. These include, for example, supermarkets, hypermarkets, and discounters. Retailers tend to focus on a range of products mainly consisting of so-called Fast-Moving Consumer Goods (FMCG) (MetroGroup, 2018). These types of goods can be handled quickly and are purchased by consumers without much information needed. These include everyday necessities such as e.g., groceries, hygiene articles and tobacco (Onpulson, 2018). Retailers are therefore offering a mix of food, as well as near and non­food products. The near-food segment includes products such as personal care products, detergents, and cleaners as well as paper and hygiene products (Statista, 2018d). Thus, the field non-food includes all products that were not mentioned in advance, such as textiles or household goods (Metro-handelslexikon.de, 2018).

However, even though if some retailers are not solely focusing on groceries, but rather having an assortment consisting out of the previously described FMCG's, the emphasis for this thesis is limited to groceries only. With the help of the definition given by Dorn and Krämer, the B2B business model is delimited, and the focus on B2C is set. Also, this is already regarding "E-Commerce” [see (p.19) Chap. 2.3.2], which will be looked at in more depth in the following chapter: If an E-Commerce application focuses on providers and private end customers, this is called Business-to-Customer (B2C). The B2C area is characterized by the relationship, one-to-many, where the personal identity of the end customer is (usually) not known. Accordingly, the systems of this category are often designed for a large number of E-Commerce users (Dorn & Krämer 2003, p. 39).

2.2.2 Distribution-Types and Business Models within the Food Retail Trade

The terms "types of distribution" or “models of distribution and business” determine the position in the supply chain and the characteristics of a retail trader and thus represent the appearance of a company due to categories such as size, assortment or operating form (Uni-DuE, 2001).

In general, a distinction can be made in the retail trade between brick-and-mortar retail (stationary), ambulant trade and the online-trade (non-stationary trade). (MetroGroup, 2018 p. 86).

Table 1: Distribution-Types and Business-Models.

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration, adapted from Gittenberger E., Teller C. (2012), Metro AG (2015), pp.90-93 and (Thoma, 2016).

For the further course of this work, the focus should be on the online-trade, which belongs in the field of "E-Commerce". Thus, the most significant types of distribution within the business models “brick-and-mortar” and “ambulant-trade” are briefly compared concerning commonalities and therefore demarcated. In particular, the size of the type and the range of articles are considered.

Starting with the smallest representative in the field of stationary trade are the convenience stores. These include, among others, kiosks, gas stations, but also bakeries and butchers (Kenning, 2018), which are associated with the so-called craft trade (Gittenberger E., Teller C., 2012). Also, grocery specialty stores or delis are in this category. These are usually found in a residential environment, which is why the sales area is limited, and only a limited range of goods and services are offered. Discounters are shops with a sales area of 401 m2 to more than 800m2.

In comparison, supermarkets can own an area of 401m2 to 2.500m2. Small-scale discounters or a small supermarket can, therefore, be the same size, but with many articles from about 4.000 to 8.000 products, the small supermarket differs from small­scale discounters (article number about 800 to 3.500) (including non-food.) Hypermarkets have a retail space of 2501m2 to 5.000m2, and big-box retailers (self­service department store, hypermarket, supercenters) are over 5.000m2 in size.

To show the significance of these dimensions, the article numbers (also non-food) are now included in the three distribution-types mentioned last. Medium to large supermarkets offer about 8.000 to 20.000, hypermarkets about 20.000 to 40.000, and hypermarkets offer about 40.000 to 60.000 items (HCU, 2013, p.15).

The ambulant-trade is characterized by the fact that it is non-permanent and that it approaches the consumer or a place that is easily accessible for the consumer (Thoma, 2016) . Thus, distinctions between house-to-house trading, market trading, and sales vehicles are made. In the field of house-to-house retailing, a representative goes from door to door to offer his products. E.g., on a weekly market, people with a market stall are offering goods in the field of market trading (Wirtschafts-abc.com, 2018). Furthermore, there is the sale from a vehicle of fresh produce such as fruits, vegetables or fish (Wirtschaftslexikon24.com, 2018).

2.3 Electronic Business

In order to be able to elaborate on the types of online food retailing in the further course of the work, the following section will first have to consider the subject of E-Business (also called Electronic Business) in order to establish a fundamental knowledge. For this term, no uniform definition has yet been defined, and it is used in many different ways. It is striking that the term is often used as a synonym for "electronic commerce" (Waßmann, 2002). Both terms have become established in economic vocabulary (Bliemel F., Fassott G., Theobald A., 2000) and E-Business is used in a variety of economic sciences for any type of electronic commerce (Kuhn, 2006). Considering this, an attempt to set up a representation of the terms and how they apply to this work shall be made. To state a sufficient representation, both terms E-Business and as the chapter progresses E­Commerce are defined. Barton (2014) defines the term E-Business as an exchange of services between market participants in order to create value or to organize a society through the use of information and communication systems using internet technologies.

The exchange of services also refers to the trade of material and immaterial goods rather than only the trade of services. The participants are representing the subjects and their different business relationships using a virtual marketplace. Furthermore, a distinction can be made between three economic subjects and their business relationships in the virtual marketplace between consumers, businesses, and administrations (state or public institutions) (Böing, 2001, p.5).

2.3.1 E-Business Relationships

The matrix below intends to illustrate the previously mentioned constellation of possible business relationships. Further, it shows an overview of the electronic business constellations of the actors including examples.

The focus is set on the business segment (B2C) and should, therefore, indicate that only the relationship between the business and the consumer is of importance for this work. The subject business takes the role of the provider, and the consumer takes the role of the demander (Böing, 2001, p.6).

Table 2: Business Relationships.

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration, adapted from (Meier and Stormer, 2009), (Kuhn, 2006. p.21) and (Fost M. 2014).

2.3.2 Electronic Commerce

How the orientation of the term E-Commerce can be classified shows the definition by Müller-Hagedorn (2000): Electronic Commerce deals with transactions between independent economic subjects, which justify the exchange of economic goods (trade in a broad functional sense), whereby not only the offer is tendered electronically, but also the utilization of the order is done electronically using an interactive medium.

This definition confirms the opinion stated by (Waßmann, 2002), where the term E­Commerce is subordinated with respect to the term E-Business and is therefore seen as an element of it.

Kuhn (2006) further elaborates that electronic business can be described as any form of electronic commerce, but E-Commerce is more transactional oriented and consist out of further areas. Electronic customer communication takes place through the support of stationary distribution channels. The trading intent or contracting is attributed to the area of "online trading" and transactions between buyer and seller are aspects that happen on a virtual marketplace.

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration, adapted from (Kuhn, 2006, p.17).

Figure 3: Hierarchic Electronic Business.

As a result, E-Commerce is a component of E-Business and is described as a transaction that is conducted on publicly accessible markets and via an interactive electronic medium such as a notebook. This study will focus on E-commerce between businesses and private households and concluding, Riehm et al. (2003) approves that the delivery of food is a service that has been established in the industry of E-Commerce where the internet functions as an additional ordering medium for some companies.

2.4 Online-Food-Retailing

The following chapter deals with the topic of online food retailing. First, a suitable definition for the thesis is determined. Afterwards, the types of distribution regarding this business model will be explained, and classifications are introduced. Finally, a short overview of the German food retail trade is given.

2.4.1 Definition

Due to the already available definitions of the terms "trade", "national road haulage" and "E-Commerce" and the focus set through the stated demarcations, both on retail and on the B2C aspect, an attempt is now made to define the definition of "Online food retailing" (also called “online grocery shopping").

Companies, both "pure players" and "multi-channel provider" are predominantly distributing FMCGs to consumers. This business, from getting in contact and further communication to the purchase intent or contract closure, and finally the transaction, is done through a virtual marketplace that can be conveniently accessed from anywhere through the Internet. This business and with it, the delivery of the goods is carried out exclusively within the national road traffic.

2.4.2 Business Models

A differentiation in business models within this young and not entirely developed market is possible. The market can be separated into three main categories (EHI-Studie, 2015). EHI-Studie's (2015) study also shows the distribution within these categories out of 250 questioned Online shops. There are distributed as follows:

Online-supermarkets with 9% and online-specialty markets with 86%. Another type of distribution, not less important, but more difficult to classify, is the subscription-based commerce with 23%. Consumers can receive groceries via subscription, which means they will be provided with groceries regularly. The consumer has the option of receiving the same groceries every time, or the provider compiles a variety of products (Ziemßen, 2018).

Another category to distinguish providers is the way of distributing the groceries. The pure online retailer is classified as a pure player. A pure player solely offers products via an online shop and has no physical stores (Ziemßen, 2018). An excellent example of a pure player regarding groceries is "AllyouneedFresh". A multi-channel provider (e.g., Rewe) sets the focus on distributing the products through the utilization of several sales channels at the same time (Schögel M., Sauer A., Schmidt L., 2004). Thus, the stationary channel is operated independently from the online channel, and the customer has to decide in advance which channel the purchase of groceries shall be made from (EHI Studie, 2016).

Constant new adjustments in this new dynamic market make it challenging to continue categorizing. In this field, there are other differentiation such as cross-channel provider and omni-channel provider. Cross-Channel links the stationery business and the online trade, which enables entirely new sales options such as reservations (EHI Studie, 2016). It should be noted that transitions are noticeable, and the customer is still aware of the different channels. Further, Omni-Channel is considered as an evolutionary trend and should ensure a seamless purchasing experience for customers across all channels. The differentiation criterion cannot be determined entirely (EHI Studie, 2016). Only the impression of the customer counts and whether the transitions between the channels are conscious or unconscious for said customer (EHI Studie, 2016).

Thus, other sales variations such as "click & collect" or "drive-through", cannot be incorporated into Cross- or Omni-channel. The variation of “click & collect” offers the process of ordering food online and the possibility of picking up the pre-packed products in the store. "Drive-through" offers the consumers to order food online, drive through a central warehouse and pick up the ordered products. (cf. Ziemßen, 2018 and cf. Randler, 2017).

2.4.3 German Online-Food-Retailing

The following subchapter shows the most critical market players within the German food retail market and their classification regarding the type of distribution, in order to create an overview of the existing market. The previously described categories are used for this. Accordingly, the criteria assortment diversity and the utilized distribution channel are used for classifying. Therefore, it is considered whether it is a pure player or a multi­channel provider. For better understanding and to avoid complications within the classification, Cross- and Omni-Channel providers are added to the Multi-Channel provider category.

The selection of the online-supermarkets, online-specialty markets and the retailers who carry out a subscription-related model, where chosen based on the constant repetitive appearance in statistics and secondary material, studies (cf. IFH, 2017, p.12, EHI, 2016 and Statista, 2016b) and real-life experience. Excluded where those, who's portfolio is not mainly consisting out of groceries.

Table 3: Online-Supermarkets and Online-Specialty Markets

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration adapted from (Ziemßen, 2014), (Strategy/cc, 2018) and (Thoma, 2016).

It can be seen that in Germany the pure-player market in the field of supplying full-range is well served. It must be said that the market players in the partial-range column have a deep and wide assortment, but according to the definition, they are not adequately equipped in each area. For example, Lebensmittel.de and Edeka24 offer no fresh meat and the latter generally offers no frozen food (cf. Lebensmittel.de, n.d. and Edeka24.de, n.d.)

At the beginning of this chapter, it has already been mentioned that the subscription­commerce type is more challenging to integrate and therefore a different presentation format is shown. Thus, a distinction in “solely subscription commerce” and “subscription as an additional offer” is made. Online retailers who also offer subscriptions in addition to the distribution of individual products are among the latter, while providers who solely use subscription commerce and sell sample boxes or sell their boxes individually in addition to the subscription belong to the former (Thoma, 2016).

Table 4: Subscription Commerce

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration adapted from (Thoma, 2016).

However, a full description of the services and product portfolio of each provider, whether online supermarket, online-specialty market or subscription-based provider, would go beyond the scope of this bachelor thesis and thus is limited to the overviews presented. Essential for the present work are the benefits and services offered by the transport service providers and the dealers delivery service. According to the EHI's study (2015), 77% of the surveyed retailers offer, among other transport providers, delivery via the logistics partner "DHL" and 13% of the online shops surveyed deliver their products via their delivery service. Thus, the expectations that consumers towards transport service providers have shall be identified and examined, and the methodology used for this will be presented in the following chapter.

3 Research Design of the Applied Methodology

This chapter will introduce the design of how the research was conducted, and of how results were obtained. Therefore, this chapter is separated into five parts and will explain every step throughout the process and decision made in detail. First, the research questions and hypotheses are explained in more sense and depth. Afterwards, to answer these research questions and to test the formulated hypotheses, the process of data acquiring is explained. Part two and three will describe how the acquired data is analyzed and further examined, which will lead to the results needed, to state the recommendations.

3.1 Research Questions and Hypotheses

Since secondary studies have proved the acceptance and readiness of this business model, it is crucial to uncover the expectations that consumers have for transport service providers, to pave the way for this business model. First, what does the current situation looks like? Second, is everyone aware that groceries can be purchased online? Which categories belong to food? What are the reasons for and against the online order concerning the transport service provider? Which situations can consumers identify themselves with entirely, or not at all? Given these questions, the following research question shall be answered:

Research Question 1: What are the expectations of targeted customer segments towards food-logistics-services for online-grocery-shopping?

After the first question is answered, it is essential to find out which different kinds of properties are influencing the identified expectations and therefore to find out what specific types of groups of people would consider the purchase of groceries in respect to the expectation. This leads to the second research question.

Research Question 2: What kind of properties are affecting the expectations?

Further examination of the identified expectation can contribute to more detailed recommendations for action. Therefore, the tests of the following hypotheses will help for the specified expression of recommendations. The hypotheses are based on gathered experience working in this field and secondary references. Accordingly, the following research question and the hypotheses can be formulated:

Research Question 3: What can providers of food-transportation-services do to satisfy these expectations?

The trend of delivery happening within one day has long arrived. Big companies such as Amazon make sure that the goods arrive within 24 hours with their same-day delivery and express shipment carried by, e.g., DHL (cf. Amazon.de, 2018).

This leads to the question whether people expect groceries to arrive within 24 hours and if so, does it depend on the awareness of having the possibility to purchase food online, or is it more banal, such as with just having more money.

H1: People that are aware of the possibility to purchase groceries online, score higher on the expectation “24-hours delivery” than those who are not aware of it.

H2: A household that has higher net income scores higher on the expectation “24­ hours delivery” as those with a lower net income.

Out of a marketing perspective and whether to communicate the advantages to the outside world or not, three variables should be part of the equation when it comes to the independence of opening time and the general time-saving. The size of the city, the size of a household and gender could make a difference, which leads to the following:

According to Neumeister (2014, p.29), the distance between a consumer and a supermarket or discounter differs referred to bigger cities and rural communities. Therefore, the following hypothesis shall be tested:

H3: City types that are bigger in size are scoring lower on the expectation “independence in regard to opening times” than city types that are smaller in size.

Even though the number of men executing groceries shopping has increased, women are still taking the process over more often (cf. RWI, 2013) and therefore the time-saving aspect for females could be of more importance.

H4: Females are scoring higher on the expectation "time-saving" than males.

Households that consist out of fewer people than bigger ones can profit from the online purchase of groceries, since the probability that one member finds time to go to the store, executes the shopping, stands in line and goes back home, is less than for the households that are bigger.

H5: Households that are lower in size are scoring higher on the expectation "time -saving" than households that are consisting out of more people.

Counting as a new project in this business model is that the courier takes the empty bottles on arrival back to the company's depot and transfers the worth of bottles via smartphone to the customer. This new niche creates room for some hypotheses.

Since there is an increased execution of doing the groceries shopping for women compared to men, most of the time the machines to return the bottles are within the same store where the execution happens. Therefore, women could appreciate this aspect more.

H6: Females are scoring higher on the expectation “return of bottles at the door” than males.

The next hypothesis is formulated based on the factor convenience since it is just not convenient to carry all the empty crates or even bags of bottles to the car and store. The older one gets, could mean that one appreciates some service advantages more than others.

H7: People who are part of older age groups are scoring higher on the expectation “return of bottles at the door” than people who are part of younger age groups.

Further, considering the average increase in distance of rural communities to the store and therefore the importance of keeping the groceries cooled during the transport, one could think that the provider can neglect the process of cooling the groceries.

H8: City types that are smaller in size are scoring higher on the expectation "transparency of the cooling process", than city types that are bigger in size.

Especially people who study or just started to enter the work-life profit from lower prices and could estimate the value of this aspect stronger.

H9: People who are part of younger age groups are scoring higher on the expectation of too high delivery costs than people who are part of older age groups.

3.2 Data Acquisition

The second part of the methodology will emphasize on the acquisition of the inform ation and the technique used for this. The questions utilized for obtaining the information are introduced, and the different types of information are explained. Lastly, the processes implemented until the final sample can be developed will be presented.

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration.

Figure 4: Data Acquisition

First and foremost, the test subjects are divided into four categories that differ in age to find out the first quota needed for the quota scheme. It should be noted that a total of 82.5 million people in Germany are considered (Statista, 2018a). Subsequently, it is shown how strongly the share of the individual categories is represented in Germany. That takes place in comparison to the total inhabitants of Germany, and in comparison, to the population which is essential for this thesis. This is done for the sake of a better interpretation of the results as the work progresses and this shows the potential and the number of people to whom this work could be transferred to. Thus, the population for this thesis of about 18 million people is determined as follows:

Table 5: Overview of Population

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration adapted from (Statista, 2016a).

Furthermore, Destatis (2017, p.26) provides the second quota on how the population is distributed gender wise, which shows that around 49% are males an 51% are females. Based on these two quotas the following quota scheme can be created, and the sample can be drawn accordingly.

Table 6: Quota-Scheme

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration adapted from (Thoma, 2016).

As it can be seen in Figure 6, the research technique is a questionnaire, which is divided into the following three question pools to obtain the different sets of information needed:

1. Core Fundamentals
2. Demographic Properties
3. Aspect Evaluation

3.2.1 First Question Pool - Core Fundamentals

Within the first question pool of the survey, as seen in Appendix A, the sample is interviewed regarding the current state of the purchasing frequency. The following three questions were asked first, and due to the simplicity, they are well suited as icebreaker questions that should attune the test persons to the questionnaire. Additionally, the described questions lead the person to the issue and are fulfilling their purpose (Wübbenhorst, 2018). Everyone has already encountered situations respectively to the grocery shopping and can thus efficiently provide information about their attitude to the requested items.

Please estimate, on average, how often a week do you purchase groceries in a store?” The intention was to find out the average number of how often a week the sample is going to a store to purchase groceries. This will be summed up to the monthly rate and compared with the numbers of the following two questions to give a comprehensive overview. The participants could choose between six categories.

“How many times have you ordered groceries online in the last 12 months?” This question was integrated after the question asking for awareness, which reminded each participant about the different possibilities regarding products that one can purchase online. The reason for this question was to determine the average number of times regarding the yearly purchase.

The purpose for the annual average is to determine a number because if the question had asked for a monthly or even a weekly rate, the results would have been equal to zero a lot. Thus, the average number will be divided by 12 to get the monthly rate for the sake of said comparison. The participants were confronted with an open question and had to answer in numerical form.

“Last month, how many times did you purchase online?” The focus was to find out the general willingness of the sample to purchase all types of products online. The same reasoning from the last question can be applied to this question on why the asked period was monthly. If it had been a weekly rate, the results would be zero many times, and if it were a yearly rate, the results would have been just predictions because nobody remembers this number. Given that, a monthly average rate seemed most adequate to compare the rates from the other questions with.

“Before this survey, did you know that you can purchase the following goods online?” The awareness is examined, and it is determined whether the subjects are familiar with the possibility of buying groceries online or not. It was explicitly questioned to answer in consideration of the fact "before the survey" because after the survey the participants know about the option to purchase groceries online. The respondent had given the task to tick all the product types which they know they can purchase online. The selection was made with utilizing the proportion of food already purchased on the Internet (cf. Beyer, 2018), as well as on the highest-selling product groups of the German food retail trade (cf. Statista, 2018e). If they were not aware of purchasing any of the given product types, they had given the possibility to tick the appropriate field. To facilitate the answer of the respondents, some product groups have been cumulated, and examples of each group were built (cf. Thoma, 2016). For the analysis and a better interpretation, the selected goods can be subdivided into categories such as durable, fresh and frozen products as seen in the following table:

Table 7: Product Types

Abbildung in dieser Leseprobe nicht enthalten

Source: Own illustration.

The next question should equate the willingness to acquire those product types and the regarding categories with the awareness of doing so. “Which of the following categories would you be most likely to order online from?”

The participant had to decide between durable, fresh and frozen products. Also, the opportunity was given that if they had no preference in the above presented categories, to tick the appropriate field. This question intended to determine if the answers correspond to the awareness from the previously described question.

3.2.2 Second Question Pool - Demographic Properties

At the end of the survey, a certain level of trust has already been built up with the respondents, making it more probable to get to know personal information (Thoma, 2016). Thus, the second question pool in the present study examines the sample regarding demographic characteristics. Here, the items whether the respondent lives in Germany or not, age, gender, household size, household net income, household constellation and size of the place of residence were inquired.

Since the survey was distributed via online platforms, it was essential to make sure that the targeted test persons are filling out the survey. Therefore, two questions guaranteed that people who were not targeted can be excluded. Since just the data from 18-35-year- old people living in Germany is important “Do you currently live in Germany?” and “How old are you?” had to be asked. The first question gives a choice between "Yes" and "No" and the second made sure that they are part of the targeted respondents and if not excluded them since they are too young or too old. Giving a choice between six categories. Further, the second question is also one of the requirements that must be met for the quota scheme. Asking for the “Gender?” (Female/Male) ensures that the second requirement is met.

The following three questions are asked to receive some information about the current household properties of the respondents and to draw some conclusions from them. “How many people, including you, live in your household?” left the respondent with an open question and aimed for finding out the household size. “What is your monthly net household income?” questioned the respondent with a selection of income in given ranges. “In which constellation do you live in your household?” offered six categories to choose from and aimed to find out how the sample is distributed at home. “How many inhabitants does the city approximately have you live in?” To separate the respondents into categories based on how big or small their cities are, it was asked for an approximate number of residents of the city they live in. Therefore, the classification takes place in five categories.

[...]

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Details

Title
The Expectations Of Targeted Customer Segments Towards Food-Logistics-Services For Online Grocery Shopping. An Empirical Analysis with Recommendations for Action
College
Rhine-Waal University of Applied Sciences
Grade
1,5
Author
Year
2018
Pages
106
Catalog Number
V918404
ISBN (eBook)
9783346253682
ISBN (Book)
9783346253699
Language
English
Tags
Transport Service Provider, German Food Retail, Online-Grocery-Shopping, E-Commerce, Ordinal Logistic Regression
Quote paper
Sebastian Neumann (Author), 2018, The Expectations Of Targeted Customer Segments Towards Food-Logistics-Services For Online Grocery Shopping. An Empirical Analysis with Recommendations for Action, Munich, GRIN Verlag, https://www.grin.com/document/918404

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