This chapter presents the steps and the intent of the research methodology that were taken to reach the goal and subgoals of the research.
The e-commerce market in Russia is rapidly growing and with each year is bringing new achievements, setting new goals. According to the Global e-commerce 2019 Report, Russia is considered to be one of the ten countries where e-commerce is growing the fastest. [21]
As mentioned in earlier chapters, e-commerce comprises the usage of information and communication technology to help the companies in their external operations and relationships with other stakeholders (individuals, organizations, etc.). Furthermore, e-commerce is gradually developing to meet the changed and new needs of consumers and make online shopping and the relationships it creates as easy as possible.
The first two chapters covered the theoretical background and secondary research supporting this work. Following these this Thesis comprises the methodology and the primary research conducted by the author. The methodology is presented in the current third chapter, where the author describes the structure of the methods used for conducting the research. The fourth chapter includes the research itself with its empirical analysis, by looking into the connection between e–commerce, customer behavior and competitive advantage. The information presented in chapter four is based on primary and secondary sources, with the former being used more often. The research made use of both quantitative and qualitative data.
Quantitative data was collected through a survey as a primary source, which addressed respondents of Kaliningrad city to gain information about customer behavior and the changes in it along with evolving retail market given current social and economic situation. Qualitative primary source data in its turn was collected through open–end questions in interviews, conducted with companies operating in Russia that penetrated Russian e-commerce market as a response to industry development. Secondary sources represent company websites, official reports, and others. All of this helped to closely look at the correlation between e-commerce and business strategy changes and what they lead to in terms of competition in the market.
3.1. Research goals
E-commerce has gradually grown into a whole new industry worldwide. Russia is one of the countries where this development is prominently seen as many companies adapt their business to new needs of consumers.
The main goal of the Diploma Thesis is to analyze the customers’ online shopping behavior and applied competitive strategies of big and small retail companies in Kaliningrad city, with further formulation of how the implementation of e-commerce and omnichannel marketing
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approach helped organizations to improve their business and their competitiveness. The thesis also has subgoals such as:
• To identify the relevance of e-commerce implementation for organizations in terms of possible changes in customers’ online purchasing behavior since Covid–19 pandemic in Kaliningrad city
• To formulate recommendations for organizations online channels based on customers’ online purchasing behavior
3.2. Research methods
As mentioned previously, the research was conducted by using both qualitative and quantitative approaches. The qualitative research in this Thesis helped to collect and analyze information that is not easily accessible and understood. The qualitative data in this Thesis is presented in a form of face–to–face interviews with open–end questions to representatives of 5 retail companies in Kaliningrad. This approach helped to gain non–numerical data which will give in–depth insights on topic from the point of companies. The second research undertaken in the Thesis was quantitative research. In its turn, quantitative research was used to try to quantify part of the qualitative data generated. The method of quantitative research conducted was an online survey with close–ended questions to the consumers of Kaliningrad city. The aim of the research is to have better understanding of the behavior of modern customers, their expectations, preferences, and online purchasing experience.
To sum up, there were 2 types of different research were conducted: qualitative and quantitative. Qualitative research carried out in the form of face–to–face interviews with open–ended questions from the retail companies in Kaliningrad city. For the second, quantitative research, a survey method was chosen, to examine the online customers behavior, their preferences and purchasing experience. All the data received is analyzed using graphs, charts, and tables.
3.2.1. Description of quantitative research
For quantitative research a self–administrated survey is being used. It is a data collection technique, where the respondents read and answer the questions in predefined order without the presence of the interviewer. [69] The survey has been done in electronic form via Google Forms administrative service where the respondents had to click and select the answer, they thought suits them the most.
The survey questionnaire was conducted from the consumers of Kaliningrad city from a certain age group. The target group includes people born between 1977 and 2003 years. The reason of this is that the young generation is better–informed and more knowledgeable as they are constantly improving themselves. They follow the trends in IT industry as well as in other industries and actively using information technologies and following new innovations in IT.
Moreover, they enjoy online purchasing but as Russian customers they are somewhat
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positioned as more conservative than customers in US or Europe and may prefer also to purchase locally from the physical stores. The age group includes mostly millennials and Generation–Z which are the most active shoppers in Russia by the survey of Match 2020 according to Statista. Younger millennials and Generation–Z are the most impulsive online purchasers showing a tendency of buying products with a phone by following over an online ad. This generations is also used to make decisions regarding the purchase based on a company’s reputation and can be influenced by product placement marketing. [62] [78]
There are 21 questions in the survey, and each of the questions contributes to different behaviors in online purchasing and gives insight regarding the customers’ preferences, experience, and behavior. Sample of respondents are regular customers who use internet mostly for work, education and shopping. 171 respondents took part in the survey for the research. The survey was distributed online through referral link and captured in Appendix.
(see Appendix A) The first 3 questions aim to conclude some personal information regarding the respondents: gender, age group, education level. The Fourth, fifth, questions designed to figure out the technological background of the respondents in usage of digital devices, as well as to determine the type of connection they are using the most. At the same time, the sixth, seventh and eighth questions deals with examining whether the respondents started to use digital devices more in their daily practices, whether they shifted from offline to online purchases for some category of products as well as whether they started buy more online since COVID–19 pandemic. The ninth, tenth and eleventh questions were to find out their preferences in the ways of making purchases, payment, and delivery methods. The twelfth question designed to provide information regarding the frequency of the online purchases for each of the respondents. The thirteenth question contribute to determine the top reasons why respondents like online shopping. The fourteenth question shows the degree of readiness of customers to share their customer data of purchases to have the personalized offers. Fifteenth question related to understand the most popular areas of products or services that respondents purchase online. The last six questions of the survey designed to demonstrate the insights of customer’s behavior and their preferences. They aim to examine how they will act in different situations and what influences them to have a good experience of online shopping.
Survey was conducted in English and that was the challenging part of the survey. The population of Kaliningrad is around 1 million people, and most of them are middle–aged (outside of our target group). 95% of the population communicates in Russian and there are few people who knows English. For that reason, it was quite challenging to undertake the survey and get the maximum number of respondents to get the respondents.
3.2.2. Description of qualitative research
For qualitative research a semi–structured face–to–face interview is used. In the Thesis the qualitative research allowed to understand the online store post–implementation changes and go deeper to omnichannel strategies applied by companies in retail sector of Kaliningrad city.
The qualitative research aims to determine whether the implementation of online stores improves their rates in the market and gave them competitive advantage.
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The interviewees were chosen from a number of retail companies in Kaliningrad city that recently implemented e-commerce to their business. The author reached eight companies:
three from construction retail sector, the two from DIY retail sector and three from FMCG sector. The biggest two DIY retails – Bautsentr LLC and Leroy Merlin are chain representatives in Kaliningrad. For that reason, it was challenging to get the approval from the head office in Moscow to have the interview online. All three construction companies Vestpayp LLC, Konturterm LLC and Gidrokomfort LLC gave a positive response in giving an interview. In its turn one company from the FMCG sector refused to give an interview while two of them (SPAR Kaliningrad LLC and Naturovo Express s.r.o) agreed. All the given data from the interviews are captured in Appendix (see Appendix B).
There are nine open–ended questions for the interviewee aiming to uncover the activities of each company and provide unique knowledge regarding their e-commerce business logic and development plans. The first question is about the history of the company, their main characteristics achievements in their market sector. The second question was designed to understand their rationale of implementing the online store and its business value. The third question aims to conclude whether they experienced changes in their sales rates and increase of customer awareness after implementation of the online store. The fourth question describes the main networking channels that companies mostly use to communicate with the customers.
The fifth question is about the possible improvement that companies are planning to implement to their e–commerce. The sixth question aims to understand whether companies are applying omnichannel approach by creating multiple channels for customers’ great experience, and whether there are loyalty programs and special personalized offers. The seventh question was designed to conclude if Covid–19 affected the companies online activity rate such as bigger check– outs and increase on online sales. The eighth question was examining other online channels like social media or marketplaces where companies are selling their products and applying for online marketing strategies to promote their products. The final ninth question was determining how internet store helped companies to gain competitive advantage.
The interviews were recorded in Russian language with the permission of the company representatives.
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