Chapter 2: Literature Review
2.4. Before online stores launched
2.4.3. Organization Dimension
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No matter the nature of a business, obtaining attention within organizations for a project is a key driver for success (Kiron et al., 2012). It affects e-commerce’s success (Stephen, 1999). With executive support, the probability of success is higher, as their support leads to obtaining the needed resources for implementation and having enough time to complete the job. Top managers must be involved in the project to ensure effective IT governance (Ali & Green, 2012). On the contrary, without executive support, promoters have to rely on their own effort, which increases difficulty. A potential difficulty in obtaining financial investment for building e-commerce as a channel is that sales of new channels are typically low during early stages and do not appear to merit the major investment requested (Foster et al., 2014).
Set Clear Project Goals
Clear project goals are critical for online store success (Ashja et al., 2015). Many enterprises did not formulate concrete goals when they designed their online stores such that they became lost and the schedule delayed. Moreover, the cost for revising systems afterwards is considerable. Therefore, enterprises must plan online store implementation as a priority to organize the required resources. According to management expert Peter Drucker, objectives should be specific, measurable, achievable, realistic and time-based (Drucker, 1954). Managers must clearly define goals, expectations, and expected deliverables for each phase of the project.
2.4.3. Organization Dimension Effective Communication
Effective communication among various functions or levels is an important part of improving business organization and operation efficiency. From the beginning, staff should be told the scope, objectives, activities, and updates (Sumner, 1999).
Throughout the project, team members must carry out effective communication with
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managers to ensure that implementation is consistent with the project goals (Stefanou, 1999). Moreover, external consultants also have to work closely and effectively with team members to achieve the organizational goals (Nah et al., 2001). Enterprises can schedule regular meetings to ensure open communication within the organization.
Staff Training
Initially, store staff only had to assist offline customers; however, as the physical enterprises went online, store staff were perceived as a potential barrier to technology implementation because few staff had the knowledge and expertise needed to put the IT and logistics infrastructure in place to support click-and-collect (Foster et al., 2014). Therefore, training and technology promotion among staff are required. This is especially important for organizations in which a large proportion of staff are part-time, temporary, and not technology-minded (Cuthbertson & Piotrowicz, 2014). Staff that are familiar with both online and offline contexts can provide better services.
Furthermore, enterprises should recruit some experienced employees who are familiar with new technology or different skills (Berman & Thelan, 2004).
Staff Engagement
Engaged employees are more productive, more loyal and remain in their jobs for longer time periods (Jessica & Thomas, 2001). Therefore, enterprises often motivate employees through incentive mechanisms. These not only improve staff performance but also align closely with organizations’ strategic goals (Stiffler, 2006). However, employees are skeptical about the relevance between pay and performance. Only a small portion of employees believe that they would earn more if they improved their performance. For instance, it can be difficult to give stores credit for internet sales made, or collected, in-store when retailers provide “click and collect” service, which facilitates “channel-influenced” sales (Foster et al., 2014).
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After businesses online, properly managing online stores is critical. The metrics of success are that customers are willing to repurchase, and the customer base and average revenue per user (ARPU) grow. To fulfill these goals, the following factors may be necessary.
2.5.1. Technology Dimension Search Engine Marketing (SEM)
Research has shown that 90 percent of users hardly ever go beyond the first three pages of search results (Sullivan, 2002). Therefore, high ranking on search engines is an important issue for enterprises.
There are two options for online businesses. One is search engine optimization (SEO).
Sellers can improve their listings on the search-results pages by modifying their site codes to make them more relevant and therefore more search-engine compatible (Sen, 2005). The other option is paid placement. Sellers can pay the search engine for placement in the sponsored section of the search-results pages (Hansell, 2001).
Although paid placement is a faster way to obtain visibility and has lower
implementation costs than SEO (Sen, 2005), advertisers should keep in mind that buyers trust information in the editorial section more than information in the
sponsored section (Hotelling, 1929). Moreover, some users use Google image search to find products (Daniel et al., 2015); therefore, images are also crucial in SEO.
Consumer Behavior Analysis
Running a successful business requires an understanding of customer needs and familiarity with competitors. Therefore, measuring website traffic and analyzing user browsing behaviors are important procedures for any website owner (Christensenc et
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al., 2012). Many enterprises now analyze sales data and customer preferences by using data mining or other techniques to promote personalized information (Lai &
Liang, 2002) because it has been recognized as a key differentiation strategy that helps firms to attract and retain customers (Amit & Zott, 2012; Veit et al., 2014). The procedures should be routine so that developers can produce better websites for users (Christensenc et al., 2012). Moreover, enterprises often buy reports from well-known market research companies to obtain relevant information.
2.5.2. Management Dimension Channel Integration
Channel integration is a crucial topic for multi-channel enterprises. Added channels create new opportunities but also new challenges. Enterprises must manage their multiple channels appropriately to avoid channel cannibalization and achieve channel integration (Farris et al., 2010).Companies should provide consistent prices between channels to maintain a strong brand, because varying prices may lead to customers' confusion, anger, irritation, and perceptions of price unfairness (K. S. Han & Noh, 1999; Neslin, 2006). Moreover, multi-channel enterprises can use their online and offline stores mutually to enhance their level of consumer awareness and sales
(Goersch, 2002). Channel cross-promotions comprise the provision of information on other channels as well as financial incentives for using them. Successful channel integration not only increases sales, but it also improves trust, increases customer loyalty, and brings greater opportunities for sellers (Cao & Li, 2015).
Effective Customer Relationship Management (CRM)
A good relationship with customers is highly important. To reduce customers’
uncertainty while purchasing, it is helpful to make service phone numbers and other
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contact information available (Lai & Liang, 2002). Furthermore, providing excellent post-sale service and exchange refund policies is also important for customers (Sunil, 2015). Post-sale services include inquiring and tracking order status. If the order status is available, customers will feel more comfortable. Some customers even change their mind after delivery. Therefore, allowing for product returns is also necessary (Lai & Liang, 2002). Multi-channel retailers should let customers return products to physical stores.
Along with digitization, the way enterprises do CRM has changed. In the past, enterprises mainly focused on personal information and could only understand customers’ preferences and habits. However, enterprises now focus on a complicated relationship network and understand customers through their friends. Therefore, they can conduct precision marketing to create more value. The comparison list is shown in Table 2.
Table 2. Difference between traditional and digitized CRM
Traditional CRM Digitized CRM
1. Focus on customers’ personal information
2. Only understand customers’
preferences and habits
1. Focus on complicated social network 2. Understand customers through
complicated community relations 3. Build more precise communication
way to create value for business
Source: (Chen, 2016)
2.5.3. Organization Dimension Process Enhancement
As technology improves, the operation process should advance with time. The online store implementation represents the largest transformation that many companies have ever faced. Therefore, organizations should also transform their structures to align with the execution of chosen corporate business strategies and maintain their
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Service Innovation
Service innovation is a new or significantly improved service concept that has been put into practice. It includes new solutions in the interface, distribution methods, forms of operation, or ways to organize and manage services. Although many
companies make incremental improvements to their service offerings, few succeed in creating service innovations that generate new markets or reshape existing ones (Berry et al., 2006). Moreover, although enterprises create innovative service, it is easy for competitors to copy. Therefore, the question is not whether enterprises are able to change but whether they are changing fast enough.
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After describing every possible CSF, this study summarizes them in Table 3.
Table 3. The possible CSFs of implementing an online store Before
Online Stores Launched
After
Online Stores Launched Description Online store planning,
designing and implementing
Online store management
Success Definition
1. Build an effective business model
2. Ensure all the Functions work effectively
3. Implement project on time and on budget
1. Let customers repurchase 2. Grow the customer base 3. Grow the average revenue
per user (ARPU)
Technology Dimension
User Interface Design
Logistics Integration
IT Investment
System Stability
Transaction Security
Search Engine Marketing
Consumer Behavior Analysis
Management Dimension
Executive Support
Set Clear Project Goals
Channel Integration
Effective Customer Relationship Management Organization
Dimension
Effective Communication
Staff Training
Staff Engagement
Process Enhancement
Service Innovation
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Chapter 3: Research Approach
3.1. Research Approach
In-depth Interviewing
In-depth interviewing is a qualitative research technique that involves conducting intensive individual interviews with a small number of respondents to explore their perspectives on a particular idea, program, or situation (Boyce & Neale, 2006).
Interviews can offer a more complete picture of what happened in the program, and the primary advantage of in-depth interviews is that they provide much more detailed information than what is available through other data collection method. Because this study wants to know business practice; therefore, we choose in-depth interviewing.
3.2. Research Process
Because of the complexity of the contextual content of this research, the research applies a qualitative multiple case-study method to fulfill the research objective of evaluating the CSFs for establishing an online store from an offline store. There are three major stages when doing research, which is illustrated in Table 4. The first stage consists of building a preliminary finding and reviewing literature to identify the key factors of operating an e-commerce website. This study compiled the unstructured data, and integrated in Chapter 2. Based on the results of the first stage, the second stage went further by conducting in-depth interviews. Through the interviews, this study could understand the CSFs in practice. At last, this study organizes the findings above, and draws a conclusion.
Table 4. Description of the research process
Stage Objective Approach Result
Literature Review
Have a basic understanding of possible CSFs to
Data collected from journals, articles and other resources
Develop a framework to investigate possible CSFs for effective
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establish an onlinestore CSFs of offline- to-online business model in practice
In-depth interviews with managers from selected companies
Findings about the practical CSFs
Conclusion Building
To organize
findings and draw a conclusion
Case analysis of the CSFs of offline-to-online business model
Final findings about the CSFs of offline- to-online business model
3.3. Case Selection
To offer broad and accurate information of CSFs of offline-to-online business model, this study interviewed 12 industry experts from 10 business cases. The details are illustrated in Table 5. The selected companies have to meet several criteria. First, the companies must have started with a physical store before establishing an online store.
Second, they belong to different industries so that this study can get results that are more comprehensive.
Table 5. Description of industry experts in Taiwan
No Company Industry Job Title
1 Watsons Health & Beauty Procurement Manager
2 The Body Shop Cosmetics General Manager
The Body Shop Cosmetics E-commerce Manager
3 Hua-Nan Bank Financial Assistant Manager
4 Uni Café Coffee Shop E-commerce Manager
5 Cola Tour Tourism Vice Chairman
Cola Tour Tourism E-commerce Manager
6 Play TV-Game E-commerce Employee
7 Yung-Ching House Agency Vice General Manager
8 Yuan-Liou Publishing Director
9 Carrefour Hypermarket E-commerce Project Manager
10 Jordon Clothing Chairman
1. Watsons Personal Care Stores
Founded in 1841, Watsons is the largest health and beauty care chain store in the
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world. Over 3 billion customers shop at its offline and online stores per year. To reach more customers, Watsons entered Taiwan in 1987 and developed its official website in 2014. Powerful service led Watsons to win the first prize in Nielsen Shopper Trend from 2012 to 2014. Moreover, Watsons won the best consumer service satisfaction in the health and beauty industry in the 2016 Common Wealth Gold Service Report.
2. The Body Shop International plc
Founded in 1976, The Body Shop is a British cosmetics and skin care company. It carries a wide range of products for the body, face, hair and home. Inspired by nature, its ingredients are sourced through the Community Fair Trade program. To analyze consumer behaviors and achieve precision marketing, The Body Shop established an official websites in Taiwan, following the launch of sites in Korea and Japan.
3. Hua-Nan Commercial Bank
Founded in 1919, Hua-Nan Bank is a large commercial bank in Taiwan. Along with the development of technology, Hua-Nan Bank released digital financial service. It allows people to conduct transactions online without going to the financial institution, thus saving time and money for customers and reducing operating costs for banks.
4. Uni Café
Uni Café is a small coffee shop in Taipei that primarily sells cups of coffee and fresh baked coffee beans. However, the coffee shop’s meager income was insufficient. To obtain more revenue, Uni Café established an official website in 2011. After that, it reached customers not only in Taipei but also in foreign countries.
5. Cola Tour
Founded in 1978, Cola Tour is the number two tour operator in Taiwan. It is known for multivariate tourism products and high quality service. For the tourism industry, e-commerce is a tool that offers customers useful information online, thus saving them
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6. Play TV-Game Store
Founded in 1987, Play is the largest and the most professional TV-Game store in Taiwan. It now has 10 physical stores. To reach more customers and evaluate their habits, Play opened online stores on many large shopping platforms, e.g., Yahoo, PChome and GoHappy.
7. Yung-Ching House Agency
Founded in 1988, Yung-Ching is the number two housing agency in Taiwan. It improved itself continuously through service innovation and led the industrial transformation through transparent management instead of pocketing the difference and reporting fake building sizes.
8. Yuan-Liou Publishing Co.
Founded in 1975, Liou is a famous publisher in Taiwan. In recent years, Yuan-Liou cooperated with city governments and transformed into multimedia publishing, providing audio books and e-books. It adopted public lending to promote e-books and form a sound industrial ecology.
9. Carrefour
Founded in 1958, Carrefour is one of the largest hypermarket chains and one of the largest 500 companies in the world. It has over 85 stores in Taiwan. To provide customers with more convenient service, Carrefour not only established an e-commerce website but also planned to open small and medium stores in residential areas.
10. Jordon Outdoor Functional Apparel
With 30 years of brand history, Jordon started as a wholesaler and sold coats. It was the first GORE-TEX® authorized manufacturer in Taiwan and did everything by itself
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(product planning, production, sale, and repair). Because retail stores had space limitations, Jordon established its official website. It sold clearance items online with discount prices to increase revenue.
3.4. Analysis Steps
This study conducts an analysis procedure including three phases to conclude the resulting CSFs list and their interpretation of the results. The systematic data collection procedure is illustrated in Table 6.
Table 6. Data collection procedure Phase Description Outcomes
I Validation and Expansion
Industry experts are open to elaborate what factors are critical for business success.
The new items are combined and grouped.
The initial list of CSFs is presented to industry experts for validation if they do not talk about.
II Refinement Researchers analyzed the feedback from the
industry experts, modified the description of similar factors to make them more specific.
Less-observed items by industry experts are removed.
III Reflection Industry experts are asked for descriptive supports to the highly selected items based on cases
experienced.
Phase I
The objectives were to add new important factors and validate existing list. In the beginning, industry experts were open to elaborate CSFs for their business success.
The new items were combined and grouped. However, some industry experts had no idea when we asked them open questions. Therefore, this study sorted out the initial list of CSFs, which was collected from previous literature. It was presented to experts for validation. The detailed interview process is illustrated in Figure 3.
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Figure 3. Interview Process
By the end of phase I, some new items were added. It includes “choose appropriate online platforms”, “cooperate with suppliers closely” and “continuous IT process investment”. The lists were expanded to five CSFs of technology, four CSFs of management and four CSFs of organization before online stores launched, two CSFs of technology, two CSFs of management and two CSFs of organization after online stores launched.
Phase II
This study analyzed the feedback from the industry experts, modified the description of similar factors to make them more specific. Moreover, all factors were examined
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the similarity and difference with each other. Similar factors were modified and combined, while different factors were kept. “Staff engagement” was considered to be a part of “set clear project goals”. Therefore, this study removed “staff engagement”
and modified “set clear project goals” to “set clear key performance
indicators”. ”Search engine marketing” was considered to be a part of “consumer behavior analysis”. Therefore, this study removed “search engine marketing”.
“Channel integration” was considered to be a part of “process enhancement”.
Therefore, this study removed “channel integration”.
Finally, this study removed less-observed items by industry experts, which included
“logistic integration”, “system stability”, “transaction security” and “staff training”.
The details are illustrated in Table 7 and Table 8.
Phase III
After phase I and phase II, this study sorted out the lists of final CSFs and conducted textual description for highly selected items. It is illustrated in Chapter 4.
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Table 7. The result - before online stores launched
Initial list of CSFs New Item Removed Item Final list of CSFs Technology
Dimension
User Interface Design Design User-Friendly Interface
Logistic Integration Logistic Integration
IT Investment Continuous IT Investment
System Stability System Stability
Transaction Security Transaction Security
Management Dimension
Executive Support Strong Support by Top
Management
Set Clear Project Goals Set Clear Key Performance
Indicators Choose Appropriate
Online Platforms
Choose Appropriate Online Platforms
Cooperate with Suppliers Closely
Cooperate with Suppliers Closely
Organization Dimension
Effective Communication Frequent Communication and
Coordination among Organizations
Staff Training Staff Training
Staff Engagement Staff Engagement
Continuous IT Process Investment
Continuous IT Process Investment
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Table 8. The result - after online stores launched
Initial list of CSFs New Item Removed Item Final list of CSFs Technology
Dimension
Search Engine Marketing Search Engine Marketing
Consumer Behavior Analysis
Analyze Consumer Behavior Continuously
Management Dimension
Channel Integration Channel Integration
Channel Integration Channel Integration