International Journal of Business Marketing and Management (IJBMM) Volume 3 Issue 6 June 2018, P.P. 10-14 ISSN: 2456-4559 www.ijbmm.com Sales Structure Development for Consumer Electronics Retail Chains in Albania

Sokol Luzi1 1(PhD Candidate, Faculty of Economics/ University of Tirana, Albania)

ABSTRACT: The study investigates how sales structures of consumer electronics chains has developed in Albania during the recent years. A case study research method applies to generate understanding of the main sales channel used, taking in consideration the periods of developing of these sales channels and how these channels combine with each other. The study provided information in two main sections including an overview of the main consumer electronics chains in Albania and their sales structure, how their customers use this sales structure. The case study results mentioned that consumer electronics retailers in Albania are just now developing online sales. Results showed that customers use online channel only to get information and transactions closes in the physical store. Main implications of this study relates to creating an omni-channel structure, in order to make the boundaries between sales structures less visible to the end consumer. Through this approach retailer will have the opportunity to communicate the same concept by using more sales channel to reach their customers.

KEYWORDS: Online Sales; Omni-Channel; Retail

I. Introduction

Consumer Electronics is one of the most developed sales structure in Albania. This retail industry has been present in Albania since the fall of communism regime, mostly through the usage of wholesale channels and warehouses. This situation was present until 1993, where the first consumer electronics shops opened in Tirana. This was the first attempt to start selling these products taking in consideration retail concepts. With the opening of the first big shopping mall in Albania, QTU, the situation changed drastically, as currently retailers entered in a new space of selling. Currently there are several chains operating mainly in Tirana and major cities. Currently the competition presents within the brand portfolio these channels are working with. Each company tries to have an exclusive brand to work with and all marketing and promotion activities relates mostly to the development of this brand. This paper uses the case study design research method. The study takes in consideration the big consumer electronics retailers in Albania. The main objective was to understand how their sales structure has evolved during the years. All the gained information provides data to understand the main sales channels used currently by these retailers and if there is any evidence to prove that they are going in the direction of an omni- channel sales structure. All this information should develop a proposed path to be follow through retail chains in order to organize their sales structure. The study aims to analyze the B2C market structure, without taking in consideration the B2B structure. II. Literature Review

An important element to consider when choosing the proper sales structure of a retailer is the development of consumer experience. In the daily life, buyers tend to shop by using several sales channels simultaneously, where they can search the product online, but the final product purchase and withdrawal process takes place in the physical store [1]. Another important issue with regard to the integration of sales channels is the maintenance and consumer satisfaction. By providing unified information across all sales channels, the firm can create the same sales experience for its customer[2]. Organizing and developing the company to unify the information requires coordination of the strategy by taking into account the differences that may exist between different sales channels. In this matter, the information should not be the same but unified. International Journal of Business Marketing and Management (IJBMM) Page 10 Sales Structure Development for Consumer Electronics Retail Chains in Albania

This is because each of the sales channels offers something that the other channel do not offer. Sales channel more than identical should be complementary to one another. Creating a synergy and coordination between the various sales channels contains a whole set of challenges [3]. One of the most important challenges relates to the company's technological development. Another important element that favors the integration of physical and online sales channels is to increase profitability [4]. In this regard, the process of integrating sales of two channels in itself has a synergistic effect. This means that the sales realized by the integration of the channels together, will be greater than the sales realized by the separate operations of these two channels. Such a logic suggests that sales channels have a higher value when are interconnected with one another. Normally, the existence of sales channels starts with the physical presence of the business, so the addition of new channels is perceived as an added value of the firm in the eyes of the consumer and not as a separate channel and unrelated to the physical store. This reasoning elaborates further by estimating that in most cases businesses include both channels to create a diversification and greater reach of consumers that are inclined towards technology and the developments that it brings. In this way, if the firm has an existing customer base, now with online sales channels it can also reach another group of consumers who prefer to shop online rather than go to the shop premises of the firm. Meanwhile, one of the most controversial issues regarding the development of the online sales channel has to do with the level of trust the consumer has to invest in the firm. The problem has to do with the personal data involved in the online purchase transaction process. In this regard, one of the most effective strategies to avoid this problem is related to the creation and combination of transactions that go from sales to the physical store in online sales and vice versa [5]. This means that a consumer will be more willing to buy online if the physical store staff first propose this option. In addition, firm perception as a single entity is another element that emphasizes the importance of integrating sales channels[6]. The presentation the sales channels in a similar way, following branding and corporate procedures, creates the feeling to the customer that they are buying from the same company. In this context, sales channels are becoming components of the overall sales strategy of the company. This reasoning brings constant advantages to the firm as the customer creates different behaviors in each sales channel. They share data in the online store that would find it very difficult to share in the physical store. In this way, companies have the possibility to learn in a wider form their customers‟ perceptions and behaviors, through the combination of the information and transactions arranged in each of the sales channels. Interaction with the sales channels is something perceived for granted from the customer, as long as they receive the information that company has more than one sales channel[7]. The process of switching from one sales channel to another by the customer during their purchase defines as "showrooming" [8]. This is a way that customer uses to collect information before deciding. However, the importance of perceiving as a single channel should extend further to the company itself, including the whole flow of information generated by all channels. For this reason, it is important to apply a strategy, that is fluent and there is no interruption in communication with the customer regardless of channel passage [9]. This leads to the connection of sales channels to predict potential situations when the customer can change the channel and take the necessary technological actions to update the information in all other channels of the company.

III. Research Methodology

The aim of this research is to generate understanding of the sales structures used by consumer electronics retailers in Albania. The research objective are to explore the way consumers buy product through these retailers. The study aim to provide evidences of omni-channel sales structures and the way this structure has affected the industry players. To present a revelatory study the principles of case study design will be used [10]. Qualitative interviews and secondary sources used to gather data and information from a several consumer electronics retailers. A case study is appropriate when researching “the complex processes of contemporary marketing management” such as evolvement of sales structures and customer perception of the omni-channel of the retailer [11]. The purpose is not to generalize to any population but “to a real world that has been uncovered” [12].

International Journal of Business Marketing and Management (IJBMM) Page 11 Sales Structure Development for Consumer Electronics Retail Chains in Albania

The study conducts within well-known retailers of consumer electronics in Albania, which have a consolidated position in the market. Businesses taken in question are the top five retailers in the consumer electronics industry. These companies covers major part of the market, providing important insights in terms of customer perception. The study conducts in September 2017. In order to avoid incomplete and vague information, we did the interview in the company of the interviewer, providing relevant explanations about different points of the study. We did the interview with key management persons of the marketing and sales department, who had knowledge about marketing, managerial and technological processes. They could provide useful insight regarding the possible perceptions of the customers about the sales channels. Interviews started by discussing experiences of managing the traditional marketing sales channels of the retailers before exploring experiences of success and failure in the electronic sales channels, focusing mostly on the e-commerce site. The respondent discussed two topics such as the current sales structure of the retailer and if the perception of their customer toward switching between the sales channels.

3.1. Limitations and Further Research

The aim of this exploratory research was to generate a substantive understanding of sales channel structure and the way the customer perceives it. Through the semi-structured interview additional information about sales structure challenges emerged. Due to the nature of the chosen research methodology, we cannot generalize the findings that emerge from this study to a wider population. There is a plan for future development of this research by moving beyond a single revelatory case industry and studying additional industries such as clothes, supermarkets and pharmacies, in order to develop the emergent theoretical understanding of this subject area.

IV. Research Methodology

Study results divides in two main sections. First section includes an overview of the sales structures of the consumer electronics retailers in Albania. In the second section, we present the main challenges faced during the integration of both sales channels.

4.1. Sales structures of consumer electronics retailers in Albania According to official data from National Business Center, the main consumer electronics retailer in Albania are Neptun, Globe, GoTech, Aza Electronics and Ozone Electronics. All the retailers have a physical presence through stores across Albania. Table 1 highlight the current sales structures of each of them. Table 1 - Sales Structure of Consumer Electronics Retailers in Albania Company Physical Store Online Store Call Center Catalogue Neptun 23 1 - - Globe 8 1 - - GoTech 13 1 - - Aza Electronics 10 1 - - Ozone Electronics 3 1 - - Source: National Business Center of Albania As per the information presented in Table 1, sales structure presents through physical and online stores. Meantime, these retailers do no use sales channels like call centers and catalogue. This relates with the kind of product. One interesting case in terms of these retailers is that still they have a small department who handles B2B and wholesale business. According to response of one of the sales managers, “We have monthly promotional flyers which presents the idea of the catalogue with promotions and presentations of new product. We use this tool to get customers attention month by month. It is important to understand that we do not collect sales through e-mail or phone from the catalogue. Customers comes in the stores to buy products they have seen in our monthly promotional brochure.”

International Journal of Business Marketing and Management (IJBMM) Page 12 Sales Structure Development for Consumer Electronics Retail Chains in Albania

Online store remains a new channel, which mostly developed due to the competition through the retailers. As per the feedback of the marketing manager of one of the retailers “Our strategy online is to first present our product portfolio. We want to make clear to our customers the range and brands we are serving to them. In this way, they have the chance to understand and compare the offers in the markets. Normally pricing is a very sensitive issue as in some cases the same brand and product presents in all online stores.” 4.2. Sales channel integration challenges The perception of integration between sales structures can be more clearly set forth through an example of buying electronic products in these retailers. It is normal that in this case, the customer feels the need to use more than one sales channels to complete the purchase. The online sales channel, provides to the customer the full product information such as collection, technical data, availability and different features. All this information is present at any time and place without being restricted from the physical locating of the consumer electronic store. Because there is no time restriction, customers can make a better comparison of the possible options they are searching online, by comparing not only within the same website but also even with other websites. This information can be further enhanced if, in the online store of the consumer electronic company, has created the opportunity for other customers to leave their ratings and impressions about the product. Such information makes it possible for the consumer to have data other than the information the company offers. Once the costumer receive information about the product, he can now go to the physical store to take advantage of other elements that are not present in the online sales channel. Such elements include the opportunity to touch and feel the product, see in real life the features and to have a direct interaction with professional sales persons. In this way, the usage of several channels in the consumer electronic store makes it possible to establish a stronger trust relationship between the customers and the retailer. One of the main elements to take in consideration during the perception of the omni-channel sales structure relates to the technological development. According to the operational manager of one of the retailer “In the first place, the company needs to create technological systems and processes to manage sales from physical stores by understanding every important detail in delivering the service to their customer. Afterwards, technological development has to extend to the online sales channel as well. The company's ultimate technological challenge relates to the coordination of information generated by each of the channels. This implies that the company needs to coordinate and integrate two different technological systems for providing to the end consumer the same information. The main challenge relates to define the source of truth, since having two systems in operation, the firm duplicates all activities to match the criteria of each of the system.” Regarding the development of trust within the sales channels as per the comments of the marketing manager, “Creating a trust relation in the physical store serves the customer to take the next step in creating a trust in the online store as well. The opposite also works, as some of the most important customer concerns relates to not delivered products or addressing complaints about product issues. Excessive delays and the possibility that the product does not arrive at the destination in the case of online sales is a big question that the final consumer always has. Therefore, the existence of a physical store, as well as the optional offering of the possibility that the product can go to the store personally gives a greater confidence to the customer for the firm”.

Conclusions Consumer electronics retailers have seen a big development in Albania during the last 20 years. This development consisted more in implementing and developing physical location and chain concepts. Currently main player in this industry presents well-set physical channels. Most of the stores have an organized structure and merchandise rules presents a clear logic to the end consumer. The physical store approach remains the main sales channel used and still has the majority of the development. Even-though taking in consideration the competition of online store abroad, retailers found it appropriate to invest in online stores as well. All big retailers in consumer electronics currently have online store, which makes them eligible to take their customers from their physical stores to their online stores and vice versa. All these operations need to take in consideration technological development and trust issues. As long as the retailers presents a clear technological path, it is easier for the customer to switch from online and physical stores. Taking in consideration the data included in online transaction, trust issues is one of the key challenges that these retailers need to face. In order to clear out these issues it is important for Albanian consumer electronics chains to use their physical store to build trust. Normally if a customer has a place where they can express their complaints and concerns it is much easier to close a transaction online.

International Journal of Business Marketing and Management (IJBMM) Page 13 Sales Structure Development for Consumer Electronics Retail Chains in Albania

At the end, in the current situation sales channel, structure presents more the view of a cross channel structure where online dhe physical stores represent separately and the connection between them it is still not clear. It is important in the end for these retailers to create an omni-channel approach, taking in consideration all the data and information the customer shares with them. Through this approach, they can manage not only persona behavior but as well, group behaviors of families in order to better serve their product portfolio.

References [1] Burke, R. R. (2002). Technology and the Customer Interface: What Consumers Want in the Physical and Virtual Store. Journal of the Academy of Marketing Science, 30(4), 411-432. doi:10.1177/009207002236914 [2] Shankar, V., Inman, J. J., Mantrala, M., Kelley, E., & Rizley, R. (2011). Innovations in Shopper Marketing: Current Insights and Future Research Issues. Journal of Retailing, 87(1), 29-42. doi:10.1016/j.jretai.2011.04.007 [3] Steinfield, C., Bouwman, H., & Adelaar, T. (2002). The Dynamics of Click-and-Mortar Electronic Commerce: Opportunities and Management Strategies. International Journal of Electronic Commerce, 7(1), 93-119. doi:10.1080/10864415.2002.11044254

[4] Chatterjee, P. (2006). Cross-Channel Product Ordering and Payment Policies in Multichannel Retailing: Implications for Shopping Behavior and Retailer Profitability. Journal of Shopping Center Research, 13(2), 31-56. [5] Hahn, K. H., & Kim, J. (2009). The effect of offline brand trust and perceived internet confidence on online shopping intention in the integrated multi-channel context. International Journal of Retail & Distribution Management, 37(2), 126-141. doi:10.1108/09590550910934272 [6] Yang, S., Lu, Y., Zhao, L., & Gupta, S. (2011). Empirical investigation of customers‟ channel extension behavior: Perceptions shift toward the online channel. Computers in Human Behavior, 27(5), 1688-1696. doi:10.1016/j.chb.2011.02.007 [7] van Dijk, G., Laing, A., & Minocha, S. (2005). Consumer behaviour in multi-channel retail environments: consumer movement between online and offline channels. 5th American Marketing Association/Academy of Marketing Joint Biennial Conference 'Marketing: Building Business, Shaping Society. Dublin. [8] Zhang, L., & Oh, L.-B. (2013). Determinants of Multichannel Consumer Switching Behavior: A Comparative Analysis of Search and Experience Products. Wuhan International Conference on e-Business (pp. 205-212). Wuhan, China: WHICEB. [9] Pookulangara, S., Hawley, J., & Xiao, G. (2011). Explaining consumers‟ channel-switching behavior using the theory of planned behavior. Journal of Retailing and Consumer Services, 18(4), 311-321. doi:10.1016/j.jretconser.2011.02.005 [10] Yin, R. K. (2003). Case Study Research - Design and Methods Second Edition. Sage Publications.

[11] Kapoulas, A., & Mitic, M. (2012). Understanding challenges of qualitative research: rhetorical issues and reality traps. Qualitative Market Research: An International Journal, 15(4), 354-368. doi:10.1108/13522751211257051 [12] Easton, G. (2000) „Case research as a method for industrial networks‟ in Ackroyd, S. and Fleetwood, S. (Eds.) Realist perspectives on management and organizations, Routledge, London, pp. 205-219

International Journal of Business Marketing and Management (IJBMM) Page 14