(Luận văn thạc sĩ) LOTTE mart NSG the importance of customer loyalty improvement in sale performance

UNIVERSITY OF ECONOMICS HOCHIMINH CITY
International School of Business

LE VU BINH

LOTTEMART NAM SAI GON-THE IMPORTANCE OF
CUSTOMER LOYALTY IMPROVEMENT IN SALE
PERFORMANCE.

MASTER OF BUSINESS AMINISTRATION
SUPERVISOR: Assoc. Prof. Dr. TRAN HA MINH QUAN

Ho Chi Minh – Year 2020


Table of contents
Chapter 1: Company background .............................................................................. 4
1.1 LOTTE GROUP _______________________________________________ 4
1.2 LOTTE Mart Viet Nam __________________________________________ 6
1.3 LOTTE MART NAM SAI GON (NSG)_______________________________ 9
Chapter 2: Symptom: Sales of membership declined 9% comparing last year 10
2.2 Rivals ______________________________________________________ 13
2.3 Retail Market Trend: __________________________________________ 14
Chapter 3: Problems Identification .......................................................................... 18
3.1 Potential problem:____________________________________________ 18
3.1.1. Products (assortment) does not adapt to membership’s needs _______ 18
3.1.2 Customer Loyalty’s benefits is unattractive _______________________ 19
3.1.3 Lack of shopping experience _________________________________ 21
3.1.4 Bad attitude of staffs ________________________________________ 22
3.2 Validating problems __________________________________________ 24
3.2.1 Manager’s & staff’s perspectives: ______________________________ 26

3.2.2 Customer’s perspectives ____________________________________ 26
Chapter 4. Cause Validation ..................................................................................... 27
4.1 Potential causes _____________________________________________ 27
4.1.1 Bad services of store staffs ___________________________________ 27
4.1.2 Low competitiveness of member benefits ________________________ 28
4.1.3 Unreasonable price_________________________________________ 30
4.2 Validate cause _______________________________________________ 33
Chapter 5. Alternative solution................................................................................. 35
5.1 Solution 1. Invite expert to train CRM skills for marketing staffs ______ 35
5.2 Solution 2: Personalized promotion to loyalty membership __________ 37
5.3 Solution 3: Apply 80/20 rule to increase volume of top membership group
occupied highest (only focus on Lead group & Loyal group as mentioned
above) ________________________________________________________ 39
Chapter 6: Action Plan............................................................................................... 41
Chapter 7. Supporting information .......................................................................... 42
1


Table of Figures
Figure 1: Profit & Lost performance………………………………………………………7
Figure 2: Vietnam retail Sales…………………………………………………………….10
Figure 3: Evolution of modern trade chains by chanels……………………………….12
Figure 4: Retailer analysis-AC Nielsen………………………………………………….13
Figure 5: Customers landscape………………………………………………………….15
Figure 6: Loyalty performance analysis…………………………………………………16
Figure 7: Loyalty Analysis by nationality………………………………………………..16
Figure 8: Loyalty analysis by generation………………………………………………..17
Figure 9: Category sale yearly report …………………………………………………..19
Figure 10: Retail customer Analysis by AC Nielsen……………………………………20
Figure 11: Retailer imagery Analysis by AC Nielsen…………………………………..22

Figure 12: LOTTE Mart Camera AI Analysis……………………………………………23
Figure 13: LOTTE MART CRM report 2nd half 2019…………………………………...28
Figure 14: Rivals analysis by author……………………………………………………..29
Figure 15: Loyalty survey by Nielsen ……………………………………………………30
Figure 16: AC Nielsen retailer pricing analysis…………………………………………31
Figure 17: Derived important ranking by Nielsen………………………………………32
Figure 18: Cost benefit 1 by author’s synthesis ……………………………………….36
Figure 19: Loyalty group segmented…………………………………………………….37
Figure 20: Cost benefit 2 by author’s synthesis………………………………………..38
Figure 21: Loyalty focusing ………………………………………………………………39
Figure 22: Cost benefit 3 by author’s synthesis………………………………………..40
Figure 23: KPIs estimation with solutions campaign…………………………………..41

Table of Diagram
Diagram 1: LOTTE Group Core Values………………………………………………….5
Diagram 2: LOTTE Mart VN Catch Phrase 2020……………………………………….6
Diagram 3: LOTTE Mart Viet Nam Organization Chart………………………………...8
Diagram 4: LOTTE Mart Nam Sai Gon Organization Chart …………………………..9
Diagram 5: Initial Causes & Effect Map…………………………………………………24
Diagram 6: Final Causes & Effect Map………………………………………………….34
2


Executive Summary

Vietnam has been experiencing phenomenal rates of growth in its retailing industry
and considered as fastest growing in ASIA

One of ways to prevail in retail industry is salvaging loyalty program as effectively
competitive strategy in order to attract, engage, grow, retain and nurture customers in

increasing sales & profit performance.

However, in LOTTE Mart Nam Sai Gon, after analyzing annual report and relevant
others, the store is facing imperative problems that sales of customer loyalty went
down 9% comparing 2018. Utilizing different literature, together with customer
surveys, in-Dept employee’s interviews, the author identified main problems to impact
shopping decision of membership. Findings indicated that potential problems listed as
Products (assortment) does not adapt to membership’s needs, customer Loyalty’s
benefits is unattractive, lack of shopping experience, bad attitude of staffs. The author
recognize main cause of problems is low competitiveness of member benefits. And
designing solution that the company should acquire and serve core customers in
various segments, concentrate on increase revenue of top sales membership group with
privilege benefits.

In summary, the thesis show main problems, main cause and how to make most
reasonable solutions based on literature reviews and experience as well.

3


LOTTE Mart NAM SAI GON-THE IMPORTANCE OF
CUSTOMER LOYALTY IMPROVEMENT IN SALE
PERFORMANCE
Chapter 1: Company background
1.1 LOTTE GROUP
LOTTE Corporation is multinational Top Five largest group of South Korea,
LOTTE start business from June 28, 1948, established by Mr Shin Kyuk-ho Korean
businessman in Tokyo. LOTTE expanded its business in the whole country, South
Korea by the establishing confectionery company in Seoul on Dec 18, 1959. LOTTE
developed strongly to become South Korea’s biggest business group at fifth position

LOTTE Group include more than 90 business subsidiaries that hiring over 60,000
staffs appealed in such diversified field as confect manufacturing, financial services
alcohol, resorts, health and beauty, retail, personal care, industry chemicals, electric,
Information Technology, construction, publish, and entertainment. LOTTE owns
additional

businesses

India, Indonesia, Vietnam, India, America,

in Taiwan, Philippine,
Great

Britain,

China, Russia, Philippines, Uzbekistan and Poland.

History:
•

50 years to develop LOTTE Confectionery to be a global business

•

1960: Modernization of food industry

•

1970: Develop of food industry and reinforce diversification of business

•

1980: Entry to the 10 Korean businesses

•

1990: Provision of foundation for global management

•

2000: Focus on the main capability to be a multi-national business

•

2010: Vision, the powerful development for multi-national business to leading
company

Mission: “We enrich people’s lives by providing superior products and services that
our customer love & trust”
Vision: Creator of Lifetime Value to develop strong growth over the upcoming 60
years, LOTTE has selected to concentrate on concrete growth and notice a clear
4


vision. “Lifetime Value Creator” means our resolution to create LOTTE a brand that
deliver our clients with the so real value into their lives.
Core Values: The core value that all LOTTE employee must wish toward so that
LOTTE could finish practical mission and vision, those are Respect, Originality,
Challenge

LOTTE’s Corporate Culture: Find ways to generate bigger value by all your
employees sharing their hearts and thoughts. LOTTE is generate a unique valuecreating culture that enhances social value through mutually beneficial relationships
between the various stakeholders of the company, as we ensure employee well-being
by how to respect everyone's different lifestyles and build business value through
innovation and consolidation of ideas.

Diagram 1: LOTTE Group Core Values

5


1.2 LOTTE Mart Viet Nam
Being subsidiary of LOTTE group has been in Viet Nam for more 10 years.
Specializing in selling consumer goods, groceries, fashion, electronics & so on. We
have 14 stores in the whole Viet Nam, located in big provinces such as Ho Chi Minh,
Ha Noi, Can Tho, Da Nang, Vung Tau, Nha Trang, Phan Thiet,

Diagram 2: LOTTE Mart VN Catch Phrase 2020
With the strategic vision to 2023, LOTTE Mart Viet Nam aims to become ”Viet Nam
No.1 innovative Retail company” & “Viet Nam No 1 online Fresh Grocery Mall” on
Speed L online channel. The Catch Phrase of 2020 “Think Fresher, Do better” target
encourage and motivate all employees to keep the creative and innovative mindsets
at works, always putting efforts to make the works better improve. A always – fresh
6


mindset will lead to better work performance and environment, upscaling in product
quality, better service, and accordingly provide customer fresher and wonderful
shopping experience

Business Performance (Profit & Loss 2019)
(Unit: 100 mil VND, %)

Jan.~Jul.
2017
(13H)
Net sales
Sales profit
MD profit
S&A Expense
Personal
Wat er&Elec.
Promot ion
Rent
Depreciat ion
General Ex.
Operat ing profit
EBITDA
Net int erest
Profit Before Tax

35,076
8,385
3,872
7,249
2,040
1,230
576
623
1,539

1,241
1,137
2,676
2,056
▲1,006

%
100.0
23.9
12.7
20.7
5.8
3.5
1.6
1.8
4.4
3.5
3.2
7.6
5.9
▲2.9

2018
(13H)

39,895
9,935
4,587
7,839
2,285

1,327
661
657
1,554
1,355
2,096
3,650
2,515
▲720

%
100.0

G/ R
13.7

24.9

18.5

13.3

18.5

19.6

8.1

5.7

12.0

3.3

8.0

1.7

14.7

1.6

5.4

3.9

0.9

3.4

9.2

5.3

84.5

9.1

36.4

6.3

22.4

▲1.8

28.5

2019
(14H)

47,090
11,855
5,620
8,875
2,632
1,416
637
749
1,546
1,896
2,980
4,525
2,673
241

%
100.0

Ach.

105.4

G/ R
18.0

25.2

104.8

19.3

13.8

103.8

22.5

18.8

102.2

13.2

5.6

105.3

15.2

3.0

101.0

6.7

1.4

92.6

▲3.6

1.6

97.6

14.1

3.3

98.2

▲0.5

4.0

108.2

39.9

6.3

113.2

42.1

9.6

107.6

24.0

5.7

106.5

6.3

0.5

418.3

Gain

Figure 1: Profit & Lost Annual performance

Total net sale of 2019 achieved 105.4%, increased 18% comparing with 2018. While
growth of profit gained 19.3%. EBIDA is 4,545,100,000,000 vnd and achieved 107,
6%. In general, performance of LOTTE Mart VN in 2019 compassed as expected.

7

Diagram 3-LOTTE Mart Viet Nam Organization Chart
8


1.3 LOTTE MART NAM SAI GON (NSG)
LOTTE MART NSG is one of 14 stores in Vietnam, located in 469 Nguyen Huu
Tho, District 7, HCMC. The store occupies highest sales share & is main impact of
sales growth rate in total chains in Viet Nam.

Diagram 4-LOTTE Mart Nam Sai Gon Organization Chart
9


Chapter 2: Symptom: Sales of membership declined 9%
comparing last year
2.1 Vietnam retail market
Although many fluctuations have experienced, Vietnam's retail market is still one
of the most engaged markets globally
According to EU-VN business networks, Vietnam nation is taken into consideration
as one of the region’s most engaged markets for abroad investors with a steadily rising
GDP and booming foreign direct investment, a pattern that is estimated to retain stable
in the coming years. GDP is estimated to achieve €208.1 billion in 2018.
According to The Economist (EIU), Vietnam and India are leading retail growth in
Asia, the region with the highest sales growth rate in the world. Vietnam and India will
be the two countries with the fastest growth in retail sales in the world in 2020. Vietnam
retail sales has been growing stably since 2017 at 12%.

Figure 2: Vietnam retail Sales

According to the World Bank's forecast, expenditure of Household will rise
by an average of 10.5% per year along with the growth of the middle class.
According to Nielsen, Vietnam Retail Sales will keep growing at 12%-12.6% in
2020. Despite Covid-19, store expansion still growth significantly, driven by small
format leading by minimart (increasing 62%)

10


Viet Nam is one of fastest developing consumer markets in Southeast Asia. Vietnam
has all the necessary conditions to expand and grow in the retail field: GDP grow,
politic is stable, population is young, middle class is increasing, incomes is rising,
urbanization

is

fast,

and

standards

of

living

is

outstanding.

With the fastest growing middle class in Southeast Asia, Vietnam has achieved
phenomenal growth in the retail sector. The trend is able to be continued in the next,
delivered the demographics of young population relatively and strong client’s
expenditure behavior. Actually, the development of digitalization retail and electronic
commerce and omi-channels in Vietnam is the leading trends to see: by 2020,
Vietnamese e-commerce is always expected to develop strongly about size. Ants will
be second only to Indonesia in Southeast Asia.
The growing income of clients is considered as the reasons for the booming for
retailing market of Vietnam. Euro monitor (Market research firm) commented that by
2030, Vietnam will become the second biggest city market in Southeast Asia in of
number of clients and the top most expenditure
Vietnam's Ministry of Construction increased from 23.7% in 1999 to 38.4% in the past
year, with economic growth in urban areas 2.5 times that of rural areas, according to
the Ministry of Construction. Analysts from financial figure service supplier Fitch Group
forecast that Vietnam's private consumption growth will be strong, up 7.5% over the
same period in 2019, accelerating from 7.0%. Compared to the same period in 2018
Analysts trust personal growth of consumption to go up to 6.8% from the same period
in 2020, but still strong. Development of the outlook of labor market can be the main
driver of personal consumption growth, in the mean while lower inflation will also
stimulate spending
Mr Hippo emphasized that Vietnam will be the most potential consuming markets in
Asia, together with China, Indonesia, the Philippines, India.

11


Figure 3: Evolution of modern trade chains by chanels

12

2.2 Rivals

Figure 4: Retailer analysis-AC Nielsen

13


Vingroup acquired a lot of brands such as Vien Thong A, Fivimart, GM Vietnam, Shop
& Go, Queenland Mart, etc., VinMart drive many expert trust that the group was
preparing a big plan to be leading. Nevertheless, on December 3, 2019,
VinCommerce, the owner of Vinmart officially declared to be member of Masan Group.
Accordingly, VinCommerce, VinEco and Masan Consumer will merge together to
transform Vietnam's leading consumer goods and retail group
According to both of 2 leaders of groups, this deal target to optimize the strength of
each party's operation with the ambition to generate a big group of consuming goods
– retailer with strong competitiveness and biggest scale in Vietnam. Beside
manufacturing, the new business owns a network of 122 VinMart supermarkets and
2,600 VinMart + stores located in 50 cities and provinces. And, Vingroup also delared
merging of VinPro & Adayroi.com into the VinID application.
Vietnamese retailer Saigon Union of Trading Co-operatives (Saigon Co.op)
continued to reinforce speed of opening chain in all models: Co.opmart, Co.op Food,
Co.op Smile. In June, Saigon Co.op also purchased 15 stores of Auchan supermarket.
Saigon Co.op officially developed a luxury business model called Finelife supermarket
to target premium customers whose income is in the top A and B, and live in residential
areas or apartments in large urban areas. Thailand retailer giant MM Mega Market,
acquired Metro Cash & Carry and officially opened the first MM retail supermarket in
Vietnam in Hanoi last year.
Central Group (owner of Big C Vietnam system) opened a supermarket named
GO! MARKET in Hanoi, which is the first market under this name in Vietnam. Earlier,

in 2018, Central Group had opened the GO! Mall in My Tho (Tien Giang).Competitors
of LOTTE Mart NSG: According to AC Neilsen’s analysis; the key rivals of LOTTE Mart
NSG are BIG C, Vinmart & Coop Extra SC Vivo, Cresent Mall which developed and
opened several branches in 2018, especially Coop Mart Extra SC ViVo & Big C
2.3 Retail Market Trend:
According to Vietnam Report, Some key trends of the Retail industry in the next 3
years, those are Environmentally friendly products; Focus on customer experience;
The involvement of AI (chatbot, automatic payment…); Focus on Social
Communication; The rise of small /new retail units. Besides that, top 5 drivers will lead
Vietnam retail industry such as Supply chain optimization, New Sales & Marketing
strategies, M&A, Expand the existing product lines, New customer segments for

14


existing products. Specially, Omni channels (Multi channels) will change totally retail
in the next 10 years.

Figure 5: Customers landscape
LOTTE Mart seems to attract older shopper than CoopMart, Big C, VinMart & Aeon
According to business performance report 2019, Sale of member (customer loyalty)
decrease 9% comparing last year.
15

(Unit: VND, Ea, times, %)


No

KPIs

2018

2019

Growth
rate

1

Total Revenue

890,000,000,000

950,000,000,000

7%

2

Sales of membership

540,000,000,000

490,000,000,000

-9%

3

Member invoice

4,101,261

3,753,401

-8%

4

Total number of member

540,218

560,212

4%

5

Frequency (Purchase/month)

3.1

2.8

-10%

6

Basket price of member

531,000

450,000

-15%

Figure 6: Loyalty performance analysis

10%

25%
25%
65%

Vietnamese
Figure 7: Loyalty Analysis by nationality

16

Other

Korean


Customer
by Gen (Ea)

Sale by Gen

(mil)

Gen B (40-59)

44,817

29,400

6%

Gen X (60-79)

180,520

32% 166,600

34%

Gen Y (80-94)

252,095

45% 269,500

55%

Gen Z (95-up)

84,032

Generation

Total

8%

15%

24,500

5%

560,212 100% 490,000 100%

Figure 8: Loyalty analysis by generation
Symptoms are analyzed as follows
As above KPIs performance 2019, comparing with last year, although total sale
revenue increased, sale of membership in NSG store has declined from 540
billion down 490 billion, minus 9%. Number of loyal shoppers (member invoice)
reduced 8% compared to 2018. In the meanwhile, customer came to store to buy 3.1
times per month in last year, hence, this year drops 2.8 times.
LOTTE Mart NSG has still not met increasingly diversified needs of audiences. While
competitor update trendy products very quickly to serve customer such premium, ecofriendly, organic, international…also strong development of E-commerce.
LOTTE Mart customer loyalty is not enough engaged to retain current member &
recruit new as well. As the chart, sale share of Gen B is 6%, Gen X is 32%, and Gen
Y is 55%. Especially, Gen Z is emerging expenditure generation, although rate of
member is 15%, but sale only account for 5% comparing with total.
As analyzed, Sale of member customer decrease 9% is symptom of LOTTE Mart
Nam Sai Gon. As if member sale of LOTTE Mart NSG kept increasing trend, it
would contribute growth rate remarkably in total sale performance of company

& Group.

17


Chapter 3: Problems Identification
3.1 Potential problem:
Accordance with research & survey report together with in depth interviewed
members of LOTTE Mart VN, LOTTE Mart NSG, customers. We recognized several
following potential problems listed
3.1.1. Products (assortment) does not adapt to membership’s needs
Assortment in retailing involves the quantity and type of products displayed by
stores for consumers to buy. Consumer assortment perceptions have been shown to
be one of the top three criteria to pull customer to supermarket and is one of core
factors to prevail in retailing and increase sales as well. Therefore, retailers
concentrate on upgrade products to create competitive advantages.
According to Briesch, R. A et al (1) quantity of brands which be offered
in retail products has a good effect on choice of store for most consumers, in the
meanwhile quantity of assortment per brand, sizes per brand, and portion of
assortments that are special to the store (one for presence of private labels) have a
bad effect on store choice for consumer
However, customer seems to have negative responses to categories of LOTTE Mart.
Non-Active member Gen B, (membership but no sell in latest 9 months) Ms Trang Thi
Le said “I am living in Sky Garden Apartment (High income area), I do not care price,
and however, I fell difficult to find organic, natural items for my family. LOTTE Mart
need to improve this issues to engage high income customer”. Active membership
Gen X, Mr Kim Jang Oh, Korea man living in Sunrise City apartment in front of LOTTE
Mart commented that “Products in International zones is not diversified as wine,
confectionary, I must buy essential items in An Nam Gourmet”
Dining utensils are making a mark for shoppers by spending time returning to busy

households and providing important health and lifestyle trends. Nevertheless,
according to category yearly report, growth of meal solution decrease 11.5%, basket
value decline 27.6%, this means customer still come to supermarket but they have
very few choices of enjoying processed dishes as ready to cook, ready to eat, hot deli,
cold deli & so on. Non-active member Gen Y (membership but no sell in latest 3
months), Mr Nguyen Hai The responded via phone “LOTTE Mart have few delicious
dishes to adapt my quick meal for modern family like mine”
18


49,4%

38,6%
32,3%

27,3%

26,7%

22,2%

18,6%

15,9%
9,8%

12,2%
5,7%

4,8%

-11,5%

-15,2%
-27,6%

Dried Food

Meal Solution

Net sales growth rate (%)

Non Food

Fresh Food

No. of Invoice growth rate (%)

Fashion

Basket Value growth rate (%)

Figure 9: Category sale yearly report
3.1.2 Customer Loyalty’s benefits is unattractive
Membership is extremely precious property which decide existing of corporation
Loyalty of customer influence almost all important metric to operate a business. There
is no loyalty of customers that willing to purchase, the business will not survive. New
client have tendency to save more to acquire, and will not expense as much money
as loyal, repeat clients. Retaining client to return is very critical to success of business
According to Allaway et al (2) Loyalty programs involve retailers' centralized

effort to build traffic of store, increase shopping cart sizes, and increase the frequency
of generating deeper relationships with their customer base. Luxton claims the use of
programs of loyalty as a tool for companies to increase loyalty of clients is very
essential because they trust that both consumers and the company can gain the
benefits from it. Non-active member Gen X, (membership but no sell in latest 3
months) Ms Le Thi Dinh said that “I often get discount coupon or gift from Coop Mart
on my birthday, but LOTTE Mart is not ever”. Active member Gen Y Le Van
complained that “I have been a member of LOTTE Mart for 5 year with monthly high
expenditure, nevertheless, I am not considered as VIP member, I really disappointed”

19


According to AC Nielsen’s analysis, only 24% new shoppers want to become
preferred member of LOTTE Mart, while competitors are better such as Aeon,
CoopMart, Emart respectively 29%, 37%, 36%, because rivals have a lot of special
offers to loyal members.
The author called Ms Tran Nhu Y, non-active member Gen Z (member do not
purchase products within 6 months) and responded that “I stop shopping in your store
anymore because your member policy did not meet my needs & and I moved to Coop
Mart Extra”

Figure 10: Retail customer Analysis by AC Nielsen
Non-active member Gen X (membership but no sell in latest 5 months) Ms Nguyen
Thu Phuong said that “I like to shop in AEON Mall because they have a lot of special
benefits on member day”. Active member Gen Z Mr Hung added “Member of Vinmart
get back 3% discount, but LOTTE Mart only 1%”.

20

3.1.3 Lack of shopping experience
The future of retail is optimizing customer experience including offline or online
(Palexy CEO). Customer experience is the most interesting chance to company in
upcoming year, with simple reason; the businesses that concentrate on customer
experience will deduct churn and rise revenues reaching to higher profits!
According to Cruz, Et et (3) all the audience usually feels uncomfortable because
of difficulty in seeking a items. Despite these big stores often have visual signage to
conduct customers for specific products, sometimes these signage are also difficult to
seek
Customer experience & customer service and seem to be interchangeable. A
Company could not survive without its audiences, and that is why businesses are
centralized on way to win strategy and perhaps more importantly, sustain current
customers. Bloomberg Businessweek surveyed that “Giving a great customer
experience” has been a leading strategic goal.
Non-active member Gen Z, Hoang Bach Hop said that “I like shopping experience in
VinMart by using Scan & Go, I come store, scan what I want by App and go back, staff
deliver to my home”.
Active member Gen Y, Mr Nguyen An commented that “Why store Nam Sai Gon does
not pay by Grab Moca, It is so fast & convenient?”
According to AC Neilsen report, almost shopping experience factor of LOTTE Mart
is lower than competitors such as “Convenient to get to”; A place where it’s easy to
quickly find what I need”; “well presented product display”; clean and hygienic store.
According to Song, S (4) when the living quality improves and life value
changes, shopping evolves into a deep activity that a lot of motivations involves
experience. With buying activities analyzed as experience of client, this research
redefines factors of buying experience

as leading experience from a happy ideas

and experience in the context of valuable shopping. The beginning experience is
identified as Sensory, Affective, Intellectual, Behavioral, and Relational experience.
The experience is considered procedurally that is defined as Decision convenience,
Access convenience and Benefit convenience. The above factors of experience show
an influence on the engagement of shopping websites.

21


Figure 11: Retailer imagery Analysis by AC Nielsen
3.1.4 Bad attitude of staffs
According to Veloso, C (5) perceived quality of service significantly affects
satisfaction of clients. Perceived value and service quality are the key factors that
determine satisfaction of andience. In addition, the quality of retail satisfaction of
audience and perceived value significantly influence the intent of the behavior of the
purchase.

The attitude of an employee deciding whether a customer will buy from a store or a
nearby retailer. In order to create good retail sales, retailers must first commit to
ensuring that employees and colleagues, with a great positive attitude, before the store
focuses on processes or grading.

22


Front office staff Tran Thi Vi said that “Actually attitude of security guys, house keeper
are so impolite when serving shoppers, categories staffs are not wholehearted to
consult products to customers”. Directly interviewed with active members in store. Ms.
Nong Thi Hai said that “I really likes shopping in LOTTE Mart so much. Recently, it
seems store staff attitude go down, staffs did not care my attention as before. She

does not see welcome, smile in their faces. I felt unsatisfactory”. Non-active member
Gen Z - Mr. Le Hoang Hai Yen complained that “I often go to your store, however, your
staff almost introduced me about member card, also benefits when being members.
Sometimes, customer is crowed, she had to wait more 10 minutes, but did not hear
excuse from store, I really disappointed about caring services”.
Camera AI also showed that 40% of customer must spent 5% minutes at POS (Point
of sale) for payment on weekend as below report.

Figure 12: LOTTE Mart Camera AI Analysis

The author called non active members Gen Z (members do not buy in the last nine
months). Ms. Nguyen Thi Le complained that “I will never buy in LOTTE Mart anymore
because house keeper abused her indirectly when I dropped items by mistake,
although shopper excuse to house keeper
23


Below is initial Cause & Effect Map

Lack of
shopping
experience

Bad
Customer
service
Bad attitude of staffs
Slow payment

-

C
Inconvenient traffic inside store
Slow digital reaction

-

Sales of
membership
-

Poor Assortment
Unreasonable price
Unscientific display

-

Low discount policy
Lack of special offers for member
Lack of continuous cares

Lack of
updated
products

Unattractive
Loyalty’s
benefits

decrease

9%

F

Diagram 5- Initial Cause & Effect Map
3.2 Validating problems
Lack of updated products (Assortment)
According to Terblanche, N. S. (6) Supermarket customers Interact with the value of
goods that lead to loyalty while loyalty customers of health, beauty and lifestyle (HBL)
retailers, as a result of the positive relationship between interactions with their value
goods and front office staff
According to Singh, A. K., & Kapoor, R.A (7) assortment of retailer is defined as a
mixture of items carried by a retailer. The purpose of choosing some of item from list
of products is to optimize the retailer's goals, e.g. profit, when considering constraints
such as limited space available to impressions, budgets are determined for the number

24