Essay: Challenges & Solutions For Supermarkets Facing Online Shopping Dominance.

The Challenge Posed by Online Shopping to Supermarket Industry

Discuss About The Physical Shopping Stores Are Feeling Heat.

Aldi is being chosen as the choice of organization for this task. The reason for the selection is to highlight a scenario which is also an issue for the supermarket brands like Aldi in Australia. Australia is one of the very demanding markets for the global retailers. The presence of Aldi in Australia and a possibility of Lidl’s inclusion also just suggest the highlighted fact. Woolworths and Coles have had a duopoly of the market and have been immensely successful in this country. However, the market is reaching the saturation stage for the kind of formats these supermarket brands follow (Knox 2015).

The existing formats are being challenged by an incrementing use of the internet for shopping. Customers in specific he Millennials have a larger drift towards the online shopping mode. The changed lifestyle of citizens especially the young age people is probably the reason behind such drift. People falling under the age bracket (14-35) are known for incremented usage of internet. People aged (35-45) do also prefer using the internet in needful situations (Siraj et al. 2015). The use of the internet is a social trend at the global level. Probably, this has attracted firms with a new strategy which is also appealing to the global audience. Amazon is one of those names which has steered the online platforms and has the largest number of online customers (Lim et al. 2016). The incrementing uses of online platforms have somehow hampered the footfall at the physical stores. Customers especially the Millennials prefer shopping online on most occasions. It means Millennials, in particular, have due regards for online shopping (Lim et al. 2016). This is an issue not only because the footfall at physical stores is getting hampered but, also that Millennials are the future customers. Millennials are expected to dominate the list of customers contributing a maximum to the shopping growth (Bilgihan 2016).

The study is thus aimed at addressing the online shopping platforms as an issue for the supermarket industry and the brands like Aldi. The study also suggests a few ways to cope with the challenge to maintain the competency level.

The escalated issue is a challenge to the supermarket brands including Aldi operating in Australia. Customers, in particular, the Millennials are the biggest admirer of online shopping culture. This is indeed a worry as they are giving preference to another mode of shopping on the existing traditional shopping format. Millennials, in particular, used to have a very engaging schedule. Some of them are busy with their study where others with the jobs or businesses. This means the online shopping zones have just hit their core beliefs. It conveys a message to them that they need not worry about how to find out time for shopping. They can rather easily avail it with a never before experience through the online shopping platforms (Nichols, Raska and Flint 2015).  

Impact of Online Shopping on Traditional Formats

Now, this is important to know that how can the competency level be increased. Few changes to the physical layout of the stores and enhancement in customer service standard can play the effective roles to serve the identified purpose (Marchini et al. 2015). In terms of making changes to the physical layout, products can be designed on shelves in a way that it gives a close to the experience of online shopping styles (Marchini et al. 2015). Customers are explored to a wide range of similar products but, from the different brands on the same page. This is why they are able to compare the features and prices offered by the different brands. This makes a more sense as physical stores do not offer such thing. Products from different brands are arranged in specific zones but, the comparative features are not in an organized way. Hence, the first idea to address the issue is to organize the product in a way it is on the numerous online platforms.

An online shopping zone is a much more technology oriented. Customers with just an internet connection to their personal PCs or Laptops, Tablets and Smartphones are able to browse a large list of products from different brands. The ease of shopping provided through the technology is another reason why the young generation in most cases pick this one as their style of shopping (Lissitsa and Kol 2016). However, there is no such technological advancement at the physical stores. Aldi which has minted a huge growth in Australia in the last five years does not also have any such solutions at its stores (Aldi.com.au 2018). The very first time when customers wish to shop online they start experiencing a technological intervention and every single process that they are into just resemble the very same fact. However, physical stores do not have such interventions. They also do not have any solution to reduce the wait time due to the product packaging and also due to the clearance process at the safety zones. Hence, the second idea will be to introduce a technological intervention at stores and also reducing the wait time.  

Addressing the first idea, an appropriate solution will be to organize products in shelves in a way that it provides comparing capability to customers. It means that products will be arranged on shelves according to the types or class it resembles to. The one shelf will have the similar products from different brands. It also makes the sense as customers will be able to compare the different brands in terms of price and quality. The quality of product at physical stores can be best judged because customers are explored to it physically which is never feasible with the online shopping. The change in the layout in such a way will definitely catch the attention and make customers feel the difference. This is what has been targeted with the suggested solution (Sirakaya-Turk, Ekinci and Martin 2015).

Strategies to Maintain Competitiveness in the Wake of Online Shopping Dominance

The second idea would be to implement a few technological interventions at stores. Supermarket brands like Aldi can consider introducing computer interface at stores. Aldi can also come up with an app to provide a quite similar kind of experience to customers. The app will enable customers booking their orders for the selected products. The booked order will be delivered to them within the assigned time of delivery. They will also have the option to purchase the product instantly by being at the store. The suggested move is just to provide a similar experience and also allow customers not having the burden to carry their belongings (Blázquez 2014). There is a need for several barcodes on products, so that, the time required for the scanning process could be significantly reduced. This will also reduce the gathering around the cash counters. The belt used for inspecting the secrecy of products can be made large to make it accommodating for a large number of products. Hence, this will also reduce the queues gathered around the check-in areas (Blázquez 2014).  

The ideas recommended to Aldi sits in between the Expansion and the Maturity stage of the entrepreneurial cycle. This is because Aldi is still expanding and reaching to different corners of Australia. However, the suggestive ideas will bring the company close to the maturity stage where they won’t have any further development.

Project management will have a very critical role to play in implementing the suggested ideas. A lot of suggestions have been made to them. Hence, adequacy of the practical knowledge will not be sufficient. They just need to follow an established theoretical framework, so that, they remain focused on the mission and avoid any possible deviation from it. “End-to-end project delivery framework” is one such theoretical background which can suitably guide the proceedings of managers. It does not provide any technical framework for working. It rather provides ways to schedule the identified tasks. The framework is divided into several stages of activities, stage gates, governance, project management templates and monitoring & controls tools (Enterprisesolutions.vic.gov.au 2018).  

Activities: The every single stage of the management process should follow the activities as suggested in this framework. The activities are like set government priorities & direction, conceptualize, prove, procure, implement and realize.

Stage gates: At the end of each stage, there is a need to go for a checkpoint (gate) prior to continuing any further. The checkpoint requires the assistance of the executives or the steering committee, and the project panel. They will only ensure whether this project is at a good point to proceed further.   

Recommendations for Aldi to Overcome the Challenge

Templates for project management: This can be used to track the output of activities performed at each stage. These templates can be used as tools to communicate with project stakeholders.

Governance: It is required to govern whether the action is meeting with the desired objectives. Anticipated outcomes and goals are also analyzed with the help of it. The section facilitates such actions based on governance principles.

Monitoring & controls tools: The section governs the need for required tools which will be required to perform the planned action.

There are ample of project management structures which are suitable for different needs. In the chosen scenario, adhering to the “Series of Functional Teams” will be highly advisable for Aldi (Albuquerque et al. 2016). In this form of project management structure, the project teams are divided based on the different functions. It means there is a need to set up the different teams serving the distinguished needs. The type of project management structure is advantageous in a sense that team focus will remain specific to one project assigned to them. Additionally, performance measurement would also be a lot easier as there are project managers assigned to each team. The level of perfection would also be higher as every member of the separate projects will have clear objectives for their contribution to the project. Coordination in the team will also be high as they all are specialized to the chosen task and hence, they know it well how to get their queries resolved (Paschen 2017).   

The project team is needed to help overcome the challenge being identified for Aldi. The challenge is to fight against the rising dominion of online shopping culture. The one solution is to have an e-commerce website and coming to the same platform as that of the online shopping zones. However, this may not provide solutions to physical stores. The company may be in benefits; however, their physical stores will still remain in losses. Hence, it is indeed wiser to consider a change in shopping experience at the physical stores. It is truly impractical that physical stores can outplay the online shopping styles ever; however, it is indeed feasible to enhance the appealing capacity of physical stores (Wu et al. 2014). In future, physical stores are required to make radical changes in its existing layout to make it look attractive and engaging as well. This does not at all mean that there is no space for existing shopping formats and the brands. It rather means that if the identified issues have not been resolved, supermarket industry may reach the saturation stage (Lim et al. 2016). Hence, supermarket brands may be at a stage where there is no further growth for them. This is indeed a much bigger challenge to the businesses as such of Woolworths, Coles, Wesfarmers, and Aldi. In case they do not have sufficient customers there is no scope for any further expansion of stores. They may also be required to close a few of the existing stores in order to reduce the cost of production and elevate the profit margin.

To Form a bonding between team-members: Team members may differ in expertise as well as in cultural values. The difference in expertise is not a fact to worry as each member has a separate set of relevant works. However, the difference in culture may have a certain impact on the project. A culture defines the way each member take up to the project. Hence, cultural issues are a matter of concern. Project managers must take up the ownership and do the needful in forming a healthy connectivity between each member of the team.

Regular communication: A continuous communication with the team members is a good way to be updated with the progress and also be informed whether there is any need for any changes. It is indeed advisable to have a regular inspection of the progress, so that, the project does not get delayed due to unnecessary acts.

Clear objectives: Team should have a clear understanding of the objectives they are trying to fulfill. They must know how critical the project is and what consequences will it bring if not being completed successfully.

Check the resource availability: It is important to consider a continuous monitoring of the resources. It is important to know the resource they are left with. A timely check will avoid the wastage of time that can be a case if they are out of the stock.

Monitor the performance: The performance needs to be monitored on a regular basis. A continuous monitoring will let the project manager know the exact progress of the project. Hence, need for training of required can be identified. This is necessary for both the quality performance and also a timely delivery of the project.

The suggestion has been made for technological intervention at Aldi’s stores and also changing the existing shelf layout. The task is very critical considering a fact that it is indeed a major change. Such major change in a reputed company like Aldi automatically builds up the pressure. The project management team will be under immense pressure for ensuring a successful completion of the project. Hence, it is important that the project team is formed by picking up the skilled and experienced employees. Additionally, the following skills will also be required (Schwalbe 2015):

Leadership: It is important for both the project manager and also the other members. Team members need to have the leadership quality, so that, they have high trust in their skills and the capability to move with utmost confidence. Project manager specifically needs to have the leadership quality. It is because the entire project is eventually dependent on the project manager. The leader has the responsibility to maintain a smooth progress towards the set objectives. Moreover, the manager will only instruct the thing which is most feasible to the specific circumstances.

Communication: An internal communication between the team members and a smooth transference of ideas will be the key to success. Managers in particular need to maintain a healthy communication with the team to make things happen and let the project carry on.

Making of schedule: Scheduling is important as the project team will get to know the activities needed to be done on its assigned time. Moreover, the project manager will also have a time frame to conduct the performance measurement.

Risk management skills: Project manager does also require having strategies planned for mitigating the possible risk. For the suggested ideas, project managers handling the projects of Aldi need to have the controlling measures for probable risks. The manager needs to have an understanding of the kind of risks that may be a part of the project. Few examples of risks include one or few of the team members leaving the project, unavailability of the required stock and others.

Cost management: Managers must be capable of reducing the unnecessary expenses. The unnecessary expenses can be due to one or few of the members leaving the project, incapable analysis of financial measures and others.

Critical Thinking: This is immensely important especially the project managers must possess these skills to keep the project moving. Team members used to have an expressive behavior. Hence, they least bother on critical thinking and react to anything which they are not comfortable with. A critical thinking manager will always try to settle things which is necessary to keep the team members floating towards the goal.

Outsourcing is immensely beneficial in project management cases. The changes suggested to Aldi include few things that require an expert help to attain the best possible results. The change related to layout can be handled effectively with the staffs available in Aldi. However, the technological intervention should be outsourced to get the best work done. The outsourcing is beneficial and can be understood as follows (Binder 2016):

Lower cost-structure: An ample number of vendors are available that all have a distinguished expertise and also the different pricing structures. There are the possibilities to get the best feasible vendor at the most effective pricing.

Competence and experience: Vendors are highly skilled with their relevant area of expertise. They are experienced with many such projects in past. Hence, the execution of the project will be quite better. This is important also because Aldi may not have the bench strength for the required tasks.

Objectivity: Such vendors are the strict followers of the operational objectives. This is quite unrealistic for the organizational based employees. They are expressive in most cases rather.

Clarity of focus: External vendors may have the high focus on projects which is hardly realizable from the internal resource.  

When the project gets over, the team is appreciated for their hard and dedicated work. They also need to continually monitor the project to check whether there is any technical failure. The system may be unresponsive at times. This is when the same project team will be required to work again on the escalated issue to repair the damage done. However, the assistance is limited just to a certain time period crossing which they will not be called again for the service. Once the time span is over, team members will be allocated to other projects (Binder 2016).

Conclusion:

Therefore, the supermarket brands in Australia in particular Aldi should consider attempting to the suggestive strategies. In doing so, there will be a need to plan the projects. The projects will be divided into several sub-projects lead by the different project managers. The change in product placement on shelves can be taken care by the resource that Aldi has. However, for technological intervention, it is advisable to move to external vendors by outsourcing the tasks. They have expertise in such tasks and hence, the possibility of excellent performance will be relatively higher.

References

Albuquerque, A.F., Escrivão Filho, E., Nagano, M.S. and Junior, L.A.P., 2016. A change in the importance of mortality factors throughout the life cycle stages of small businesses. Journal of Global Entrepreneurship Research, 6(1), p.8.

Aldi.com.au. 2018. ALDI Supermarkets - Good Different - ALDI Australia. [online] Available at: https://www.aldi.com.au/ [Accessed 12 Apr. 2018].

Bilgihan, A., 2016. Gen Y customer loyalty in online shopping: An integrated model of trust, user experience and branding. Computers in Human Behavior, 61, pp.103-113.

Binder, J., 2016. Global project management: communication, collaboration and management across borders. Routledge.

Blázquez, M., 2014. Fashion shopping in multichannel retail: The role of technology in enhancing the customer experience. International Journal of Electronic Commerce, 18(4), pp.97-116.

de Poel, F.M., Stoker, J.I. and Van der Zee, K.I., 2014. Leadership and organizational tenure diversity as determinants of project team effectiveness. Group & Organization Management, 39(5), pp.532-560.

Enterprisesolutions.vic.gov.au (2018). End-to-end project delivery framework. [online] Enterprisesolutions.vic.gov.au. Available at: https://www.enterprisesolutions.vic.gov.au/wp-content/uploads/2016/03/PM-GUIDE-03-End-to-End-Project-Delivery-Framework.pdf [Accessed 12 Apr. 2018].

Kamuriwo, D.S. and Baden-Fuller, C., 2016. Knowledge integration using product R&D outsourcing in biotechnology. Research Policy, 45(5), pp.1031-1045.

Knox, M., 2015. Supermarket monsters: The price of Coles and Woolworths' dominance (Vol. 6). Black Inc..

Lim, Y.J., Osman, A., Salahuddin, S.N., Romle, A.R. and Abdullah, S., 2016. Factors influencing online shopping behavior: the mediating role of purchase intention. Procedia economics and finance, 35, pp.401-410.

Lim, Y.J., Osman, A., Salahuddin, S.N., Romle, A.R. and Abdullah, S., 2016. Factors influencing online shopping behavior: the mediating role of purchase intention. Procedia economics and finance, 35, pp.401-410.

Lissitsa, S. and Kol, O., 2016. Generation X vs. Generation Y–A decade of online shopping. Journal of Retailing and Consumer Services, 31, pp.304-312.

Marchini, A., Diotallevi, F., Paffarini, C., Stasi, A. and Baselice, A., 2015. Visualization and purchase: An analysis of the Italian olive oil grocery shelves through an in-situ visual marketing approach. Qualitative Market Research: An International Journal, 18(3), pp.346-361.

Nichols, B.S., Raska, D. and Flint, D.J., 2015. Effects of consumer embarrassment on shopping basket size and value: A study of the millennial consumer. Journal of Consumer Behaviour, 14(1), pp.41-56.

Paschen, J., 2017. Choose wisely: Crowdfunding through the stages of the startup life cycle. Business Horizons, 60(2), pp.179-188.

Schwalbe, K., 2015. Information technology project management. Cengage Learning.

Siraj, H.H., Salam, A., Hasan, N.A.B., Jin, T.H., Roslan, R.B. and Othman, M.N.B., 2015. Internet usage and academic performance: a study in a Malaysian public university. International Medical Journal, 22(2), pp.83-86.

Sirakaya-Turk, E., Ekinci, Y. and Martin, D., 2015. The efficacy of shopping value in predicting destination loyalty. Journal of Business Research, 68(9), pp.1878-1885.

Tam, S. and Gray, D.E., 2016. Organisational learning and the organisational life cycle: the differential aspects of an integrated relationship in SMEs. European Journal of Training and Development, 40(1), pp.2-20.

Wu, L.Y., Chen, K.Y., Chen, P.Y. and Cheng, S.L., 2014. Perceived value, transaction cost, and repurchase-intention in online shopping: A relational exchange perspective. Journal of Business Research, 67(1), pp.2768-2776.