PROPOSED OMNICHANNEL BUSINESS STRATEGY FOR UMKM TO INCREASE PROFIT DURING POST- PANDEMIC (CASE STUDY OF TOKO JAYA RAYA) THESIS In partial fulfillment of the requirements for the master’s degree from Institut Teknologi Bandung By CEDRIC GUNAWAN Student ID: 29121187 (Master of Business Administration Program) INSTITUT TEKNOLOGI BANDUNG DECEMBER 2022ABSTRACT PROPOSED OMNICHANNEL BUSINESS STRATEGY FOR UMKM TO INCREASE PROFIT DURING POST-PANDEMIC (CASE STUDY OF TOKO JAYA RAYA) By Cedric Gunawan Student ID: 29121187 (Master of Business Administration Program) ‘The Covid-19 pandemic in Indonesia, which began in 2020, has had a critical impact on the health sector as well as national economic activities. Many businesses in Indonesia have been affected by the Covid-19 pandemic, especially for the micro, small and medium enterprise (UMKM) sector, where the sector has an important role in building the country's economy. The negative impact that has occurred due to the Covid-19 pandemic has caused everyone to continue to adapt to changes in the strategy of each business to be able to continue to grow. Toko Jaya Raya as one of the UMKM that sells various electronic goods has felt a huge impact due to this pandemic. Toko Jaya Raya had to close for approximately 15 months in order to support the government in reducing the spread of Covid-19 and for family safety. There have been significant changes after the pandemic, causing the store's income to drop drastically. This research aims to study business conditions after the pandemic and find the right omnichannel strategy to deal with the problem. By conducting quantitative research, the authors distributed a questionnaire survey to find out the effectiveness of the solutions they wanted to propose to Toko Jaya Raya, The results of the analyzed analysis will be used to formulate the right solution to answer the research problem for Toko Jaya Raya. There are 4 solutions proposed by the author, namely advertising with digital catalogs through all digital platforms that can be utilized. Registering on a digital platform is the first step to opening an online store, optimizing digital promotions using social media, and creating attractive digital catalogs. The solutions provided are expected to help Toko Jaya Raya in increasing customer awareness and customer decisions to shop. ‘The main objective of this study is to find the best solution for the channels offered for Toko Jaya Raya with outcomes related to the dependent variable in the conceptual framework in this study.The dependent variable which will be the goals of the independent variables offered includes customer awareness and purchase decision. The author hoped that later the research objectives offered can be achieved so that the problems owned by Toko Jaya Raya can be answered. Keywords: UMKM, Omnichannel Strategy, Customer Awareness, Purchase Decision, PhygitalABSTRAK PROPOSED OMNICHANNEL BUSINESS STRATEGY FOR UMKM TO INCREASE PROFIT DURING POST- PANDEMIC (CASE STUDY OF TOKO JAYA RAYA) Oleh Cedric Gunawan Student ID: 29121187 (Program Studi Magister Administrasi Bisnis) Pandemi Covid-19 di Indonesia yang dimulai sejak tahun 2020 telah menyebabkan dampak yang begitu kritis dalam sektor kesehatan dan juga kegiatan perekonomian nasional. Banyak usaha di Indonesia yang terdampak oleh pandemi Covid-19 terutama untuk sektor usaha mikro, keeil dan menengah (UMKM) yang dimana sektor tersebut memiliki peran yang penting dalam membangun Perekonomian negara. Dampak negatif yang terjadi akibat pandemi Covid-19 telah menyebabkan setiap orang untuk terus beradaptasi dengan perubahan dalam strategi masing masing bisnis untuk dapat terus berkembang. Toko Jaya Raya sebagai salah satu UMKM yang ‘menjual berbagai barang elektronik telah merasakan dampak yang sangat besar karena pandemi ini. Toko Jaya Raya harus tutup selama kurang lebih 15 bulan dalam rangka mendukung pemerintah mengurangi penyebaran Covid-19 dan untuk keamanan keluarga. Adanya perubahan yang signifikan setelah pandemi membuat penghasilan pada toko tersebut menurun drastis. Penelitian ini memiliki tujuan untuk mempelajari kondisi bisnis setelah pandemi serta mencari strategi omnichannel yang tepat untuk menghadapi permasalahannya. Dengan melakukan penelitian ini secara iuantitatif, penulis menyebarkan survei kuesioner untuk mengetahui efektifitas dari solusi yang ingin diajukan kepada Toko Jaya Raya. Hasil analisis yang dianalisa akan digunakan untuk merumuskan solusi yang tepat untuk menjawab permasalshan penelitian untuk Toko Jaya Raya. Ada 4 solusi yang diusulkan oleh penulis yaitu pengiklanan dengan digital catalog melalui semua platform digital yang dapat dimanfaatkan. Mendaftar di platform digital sebagai langkah awal membuka toko online, optimalisasi promosi digital dengan menggunakan sosial media, dan pembuatan katalog digital yang menarik. Solusi solusi yang diberikan diharapkan untuk dapat membantu Toko Jaya Raya dalam meningkatkan kesadaran. pelanggan dan keputusan pelanggan untuk berbelanja, Tujuan utama dari penelitian ini adalah untuk menemukan solusi terbaik untuk saluran yang ditawarkan untuk Toko Jaya Raya dengan hasil yang terkait dengan variabel dependen dalam kerangka konseptual dalam penelitian ini. Variabel dependen yang akan menjadi tujuan dari variabel independen yang ditawarkan meliputi pelanggan. kesadaran dan keputusan pembelian. Penulis berharap nantinya tujuan penelitian yang ditawarkan dapat tercapai schingga pemmasalshan yang dimiliki oleh Toko Jaya Raya dapat terjawab. Kata kunci: UMKM, Strategi Multisaluran, Kesadaran Pelanggan, Keputusan Berbelanja, FigitalVALIDATION PAGE PROPOSED OMNICHANNEL BUSINESS STRATEGY FOR UMKM TO INCREASE PROFIT DURING POST-PANDEMIC (CASE STUDY OF TOKO JAYA RAYA) By Cedric Gunawan Student ID: 29121187 Master of Business Administration Program Institut Teknologi Bandung Approved, Bandung, 9 December 2022 ‘SupervisorDECLARATION OF NON-PLAGIARISM Plagiarism i: ‘Taking, using, and submitting a work of another, including an idea, writing, or invention, as if it was her or his own. Plagiarism includes (but not limited to): 1. quoting verbatim the work of another without acknowledgement of the $01 2. paraphrasing the work of another without acknowledgement of the source; 3. using the idea of another without acknowledgement of the source; 4, submitting the work of another without identifying clearly who did the work; 5. colluding by submitting the work of another as her or his own with consent from the other. 1 understand that Plagiarism is wrong, a breach of academic integrity, and against Program, School, and University’s Policy and Regulation, I declare that all material in this Final Project is original, my own work, and does not involve plagiarism. Ihave not allowed, and will not allow, another to copy my work with the intention of submitting it as her or his own work. Name___cosrie Gunayan Student ID__2aa1 Signed _ ____Date __27 pecenver 2022ACKNOWLEDGEMENTS All the praise and gratitude of the author sent to God Almighty for His grace and guidance so that the author can complete this thesis entitled “PROPOSED OMNICHANNEL BUSINESS STRATEGY FOR UMKM TO INCREASE PROFIT DURING POST-PANDEMIC: A CASE STUDY OF TOKO JAYA RAYA”. This thesis was made as a part of the learning process of the MBA program curriculum, School of Business Management, Institut Teknologi Bandung. After going through a lot of things during the research process, this thesis ean be completed with the help from various parties. The author would like to express the gratitude as much as possible to: 1. Mrs. Nila Armelia Windasari, S AK., MB.A., Ph.D., as the author’s thesis advisor. who provides guidance, always supports, provides insight, recommendations, and knowledge to the author for the completion of this final project. 2. Mr. Eko, as the owner of Toko Jaya Raya, who allowed the author to do this research and gave the author an opportunity to help with the Toko Jaya Raya business issue. The author's family, who always give support and prayers to help the author finish this thesis. 4, All the lecturers and academic teams from the MBA ITB, who provide lessons and good services to all the students. 5. All my fellow classmates of YP 65 B, who have gone through a lot of things together since the first semester started until this final semester. In preparing this final project, the author realizes that this report is not perfect because of the limitations of the author. Therefore, the author welcomes criticism and suggestions for the future researchers. Hopefully this thesis can be usefull and can be used for further research and development. Bandung, 27 December 2022 Lo Cedric Gunawan viTABLE OF CONTENTS ABSTRACT ABSTRAK VALIDATION PAGE DECLARATION OF NON-PLAGIARISM ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF APPENDICES LIST OF FIGURES LIST OF TABLES LIST OF ABBREVIATIONS AND SYMBOLS CHAPTER | Introduction 1 Background 1.2 Company Profile 1.2.1 Business Overview 1.2.2 Vision and Mission 1.2.3 Organizational Structure 1.2.4 Products 1.3 Business Issue 1.3.1 Business Situation Analysis 1.3.2 Problem Identification |.4 Research Question and Research Objectives 1.4.1 Research Question 1.4.2 Research Objectives 1.5 Research Scope and Limitation 1.5.1 Research Scope 1.5.2 Research Limitations Chapter Il Literature Review 11.1 Theoretical Foundation 114.1 Omnichannel 111.2 Phygital 11.1.3 Digital Promotions 11.1.4 Social Media vil vil11.1.5 Digital Catalog 11.1.8 Customer Awareness 11.1.7 Purchase Decision 11.2 Conceptual Framework CHAPTER Il Research Methodology lII1 Research Design IlI.2 Data Collection Method 11.2.1 Type of Data 11.2.2 Collection Method II.3 Data Analysis Method CHAPTER IV Result and Discussion IV.1 Analysis V.1.4 Findings IV.1.2 SPSS Result V2 Business Solution 1V.2.4 Advertise with Digital Catalog Through Digital Platform V2.2 Sign Up for Every Possible Digital Platform Marketplace 1.2.3 Optimizations of Digital Promotions by Using Social Media 1V.2.4 Create An Attractive, Informative, and Neat Digital Catalog IV.3 Implementation Plan and Justification CHAPTER V Conclusion and Recommendation VA Conclusion \V.2 Recommendation REFERENCE APPENDICES. vill 14 14 15 15 17 17 18 18 19 19 25 25 25 30 38 38 39 40 42 4a 47 47 48 49 52LIST OF APPENDICES Appendix A. Script of The Interview Result Appendix B. Survey QuestionnaireLIST OF FIGURES Figure I.1 Comparative Data on Conditions Before the Pandemic and During the Impact of the Covid-19 Pandemic Figure 1.2 Toko Jaya Raya front store looks Figure [3 Organizational Structure of Toko Jaya Raya Figure I4 Some of the items sold by Toko Jaya Raya Figure LS Toko Jaya Raya Net Income Figure 1.6 Sales Performance of Toko Tian Elektrik Figure 7 Details of The Number of Reviews of The Product Figure 8 Why Root Cause Analysis of Toko Jaya Raya 8 Figure IL.1 Omnichannel Strategy Conceptual Framework for Toko Jaya Raya Figure IV.1 Survey Findings: Respondent's gender Figure IV.2 Survey Findings: Respondent's Age Figure [V.3 Survey Findings: Respondent's Domicile Figure IV.4 Survey Findings: Respondent's Job Figure IV.5 Survey Findings: Respondent's Monthly Salary Figure IV.6 Katadata Survey Results Regarding Intemet Users Aged 16-56 Years Awan e en 26 26 28 29 4lLIST OF TABLES Table IV.1 Survey Findings: Respondent's Interest Rate Table IV.2 Factor Matrix ‘Table IV.3 Pattern Matrix Table IV.4 Reliability Test of Phygital for Toko Jaya Raya Table IV.5 Reliability Test of Digital Promotions for Toko Jaya Raya Table IV.6 Reliability Test of Social Media for Toko Jaya Raya ‘Table IV.7 Reliability Test of Digital Catalog for Toko Jaya Raya Table IV.8 Reliability Test of Customer Awareness for Toko jaya Raya Table IV.9 Reliability Test of Purchase Decision for Toko Jaya Raya Table IV.10 Regression coefficient table Table IV.11 Regression coefficient table Table TV.12 Quarter 1 Implementation Plan for Toko Jaya Raya Table IV.13 Quarter 2 Implementation Plan for Toko Jaya Raya Table IV.14 Quarter 3 Implementation Plan for Toko Jaya Raya ‘Table IV.15 Quarter 4 Implementation Plan for Toko Jaya Raya xiLIST OF ABBREVIATIONS AND SYMBOLS ABBREVIATIONS Name Page of Initial Usage UMKM Micro Small and Medium Enterprises 1 PSBB Large-Scale Social Restrictions 1 KIC Katadata Insight Center 2 PPKM Implementation of Restrictions on Social Activities 5 SPSS Statistical Product and Service Solutions 2 BUMN State-Owned Enterprise 27 SYMBOLS Name Page of Initial Usage B ‘Unstandardized beta 35 t ‘test statistics 35 xiiCHAPTER I Introduction L1 Background The impact of the Covid-19 pandemic in Indonesia has involved various business sectors, some are growing, some are permanent and some ate experiencing a drastic decline, especially the impact on the UMKM sector since April 20. The number of UMKM in Indonesia has reached 64.19 million in May 2021, which is also 99.92% of the entire business sector in Indonesia, which has felt different negative impacts from the COVID-19 pandemic. In an economic crisis situation like this, the UMKM sector really needs to pay more attention to their business because of changing market conditions during and after the pandemic. ‘This pandemic has disrupted the performance of companies, especially those engaged in the trade, transportation, and tourism sectors. The "social distancing" policy which was later changed to "physical distancing” and working from or at home had an impact on the decline in company performance which was then followed by termination of employment. There are even some companies that went bankrupt and finally chose to close their business. In the aspect of consumption and people's purchasing power, many workers are reduced or even lost their income so that it affects the level of consumption and people's purchasing power. Most people are very carefull about managing their financial spending becanse of the uncertainty when this pandemic will end. This causes a decline in people's purchasing power for consumer goods and puts pressure on business businesses in Indonesia, especially the UMKM sector. The existence of this pandemic has caused a decline in performance from the demand side (consumption and purchasing power of the people) which ultimately has an impact on the supply side, namely layoffs and the threat of default in credit payments (Bahtiar & Saragih, 2020), Economic problems in Indonesia are also increasingly widespread with the Large-Scale Social Restrictions (PSBB) policies implemented in several regions in Indonesia. Referring to the Regulation of the Minister of Health No. 9/2020 concemming PSBB Guidelines in the context of Accelerating the Handling of COVID-19, PSBB includes restrictions on certain activities of residents in an area suspected of being infected with COVID-19 including restrictions on the movement of people and/or goods for a particular province or district/city to prevent the spread of COVID-19. These restrictions are at least carried out through school and work holidays, restrictions on religious activities, and/or restrictions on activities in public places or facilities. Itis feared that with the PSBB, economic activities, especially production, distribution, and sales will experience disruptions which will ultimately contribute to the performance of UMKM (aturwa et al., 2021). gage8 Figure I.1. Comparative Data on Conditions Before the Pandemic and During the Impact of the Covid-19 Pandemic (Source: Katadata Insight Center (KIC), 2020) According to the survey that has been exposed in the graph above which sourced from the Katadata Insight Center (KIC), the bad/very bad business conditions increased by 56.8 percent compared to the original 1.0 percent. So it can be concluded that there are various impacts of conditions during the COVID-19 pandemic. ‘As one of the UMKM affected by the COVID-19 pandemie, Toko Jaya Raya went through this pandemic with a significant decline in profit due to store closures during the COVID-19 pandemic. Now during the post-pandemic, Toko Jaya Raya is opening their store again while also having to keep applying government regulations due to the new normal in Indonesia. The author decided to conduct this research to help Toko Jaya Raya to realize their business problem and give them solutions that hopefully could help them in developing their business. ‘As a form of business recovery in the face of the post-covid-19 pandemic, the author proposes an omnichannel business strategy to Toko Jaya Raya, where this strategy will utilize various channels to increase sales and be able to reach a wider range of customers. By implementing an ‘omnichannel strategy, the anthor hopes that Toko Jaya Raya can increase sales through various channels that can increase their profits especially with the condition where Toko Jaya Raya only has an offline store as their channel to reach their customer.1.2 Company Profile 12.1 Business Overview ‘Toko Jaya Raya is a small UMKM business located at Cengkareng, Jakarta Barat, Indonesia that sells electronics products as their main business activities. According to the owner, Toko Jaya Raya was founded in 1992, the business keeps growing little by little with many changes applied to keep the business growing. Started in 1992 Toko Jaya Raya started the business by selling watches until 1998 which was followed by a change in flow due to the declining demand for watches in 1995 from customers to sell home electronic equipment such as rice cookers, fans, bulbs, ete. ef Figure [.2, Toko Jaya Raya front store looks Toko Jaya Raya also once faced a crisis due to chaos that was happening in May 1998 which resulted in declining profit and which caused an increase in prices for all goods in Indonesia by 3, times. The worsening decline in demand also caused the watches to not sell so they decided to stop selling watches for good and start selling only electronic equipment. Until now, the business kept growing and selling sound systems and home electronics machines and spare parts as their main products. The store is open every day from Monday - Sunday from 9.00 until 19.00. 1.2.2 Vision and Mission ‘Vision and Mission of Toko Jaya Raya:Vision To become a one-stop solution shop by helping to provide a variety of electronic goods needs for everyone from large items to small items such as spare parts, Mission 1. to provide goods as complete as possible based on customer requests in the store 2. Offer the best quality goods in the market with the best prices 1.2.3 Organizational Structure Organizational structure of Toko Jaya Raya shown as below: Store Manager Figure 1.3 Organizational Structure of Toko Jaya Raya Since Toko Jaya Raya is managed by a very small group of people including the owner, the organizational structure of the business stated as the figure above. 1.2.4 Products ‘Toko Jaya Raya sells a wide variety of electronic products, ranging from small components such as spare parts, electronic machines, to large items such as speakers, amplifiers, etc. and of course they are being sold at the best price with in store negotiations happening in every transaction. All the goods sold in the store are obtained from electronic stores in the Glodok area which are the main suppliers of the store, as well as other salesmen who offer their products to be sold into the store.Ic Satatetattt Figure L4. Some of the items sold by Toko Jaya Raya ‘As shown in the figure above, these are all electronic items that Toko Jaya Raya sells from big item such as the custom speaker box, amplifier, speaker. fan machine, toa, cables, ete. and also small item such as, resistor, IC, elco, etc. and there are many more items that Toko Jaya Raya sells. 13 Business Issue 1.3.1 Business Situation Analysis Before Pandemic Covid -19 started, Toko Jaya Raya was doing well in their business with stable monthly income and slowly increasing. The issue started when the pandemic Covid-19 started which caused the store to be closed for 14 months to prevent the spread of the virus until May 2021 when the owner received the vaccine for the first time and they started to open the store again. The figure below will show the decline in revenue experienced by Toko Jaya Raya over the last 5 years.Toko Jaya Raya Profit Statistic @ Quarterly Income (in Million) == Progress 50 40 30 20 10 Figure L.5. Toko Jaya Raya Net Income ‘The decrease in revenue based on the data above happened because of the Pandemic. According to the owner, Before pandemic started in March 2020, the sales were good. All customers come as usual, ask a lot of questions about the products they wanted to buy, and finally buy the product with satisfaction because their demands have been fulfilled. It started in March 2020, when for the first time the virus has spread and keeps increasing in Indonesia. Since then until now, the Indonesian government has been enforcing the Large-Scale Social Restrictions (PSBB) and Implementation of Restrictions on Social Activities (PPKM) until now. These restrictions are giving some new rules for every business running in Indonesia which also reduce the number of customers coming to the store. In order to support the social distancing implemented by the government and also to maintain the health of themselves and other families, the owner of Toko Jaya Raya decided to close his shop until May 2021 where at least many people have received the vaccine.Toko Jaya Raya decided to re-open its store in May 2021, but there are some differences that are felt by shop owners that there is a decrease in customers coming to the store from before the pandemic, such as a decrease in the number of customers who come to the store than usual and differences in behavior. customers where there are several customers who ask a lot about a product, but after that they immediately check the price of the product at other online stores and ask for a cheaper price. Of course, the seller cannot give such a cheap price because there is a cost that needs to be taken into account in every item sold. The customers are showing signs of what we call “showrooming” by starting to compare the prices of the online market which tend to be cheaper than buying directly at the outlet store. This has become an issue for Toko Jaya Raya because all customers who do showrooming will cancel their purchases because of the price difference and the owner is afraid that they will lose the customer's trust to buy goods at Toko Jaya Raya again. Based on the results of the Katadata Insight Center (KIC) survey conducted on random 206 UMKM actors in Jakarta, the majority of UMKM of 82.9% felt the negative impact of this pandemic and only 5.9% experienced positive growth. This pandemic condition has even caused 63.9% of the affected UMKM to experience a decline in tumover of more than 30%. Only 3.8% of UMKM experienced an increase in tumover. Now, during the post-pandemic Covid-19, there is a change in consumer behavior and new business competition that business actors need to anticipate due to activity restrictions. Consumers do more activities at home by utilizing digital technology. Meanwhile, the changing industrial landscape and the new competition map are marked by four business characteristics, namely Hygiene, Low-Touch, Less Crowd, and Low-Mobility. These changes become a problem to Toko Jaya Raya because they only have offline store as their source of income. This issue has become a problem in increasing their income and also in competing with other businesses that are also struggling in this post-Covid-19 pandemic There are also many other businesses that are competitors of Toko Jaya Raya which also survived the covid-19 pandemic and sells various similar products with Toko Jaya Raya. The difference is that the shop has sold the goods online.tokopedia , = Rp207.000 Figure 1.6. Sales Performance of Toko Tian Elektrik Looking at the figure above, we can see one of the produets sold by Toko Tian Elektrik which is similar to the products sold by Toko Jaya Raya. This shop has been selling these products very well, which can be seen in the figure above that the shop has sold more than 2000 items with an average review rate of 4.9/5.0 out of a total of 477 reviews. After seeing the large number of sales from just one product, we can see that there is a very large market by selling online and it has been proven that selling goods online alone can provide very large sales results. ULASAN PEMBELI * 4.9... Figure 1.7. Details of The Number of Reviews of The Product From the number of reviews of the product above, we can see that from a total of 477 people who gave reviews of the product, there were 437 people who were very satisfied and gave a 5 star rating after receiving the product, 33 people gave 4 stars, 4 people gave 3 stars, 2 peoplegive 2 stars, and 1 person give 1 star for the item. From the data above, we can conclude that selling electronic goods online is not a problem because goods can reach customers in safe and satisfactory conditions. 13.2 Problem Identification ‘As the business issue situation already explained in 1.3.1, The author realizes that with the condition of Toko Jaya Raya where the business only has 1 offline store as a channel for doing business and added with changes in customer behavior during the post-pandemic which was marked by the showrooming made the author realized that it was time for Toko Jaya Raya to ‘adapt to changing circumstances and start to expand its business by utilizing various channels that could be utilized. ‘The author decided to use $ why root cause analysis to help identify business issues that occurred to Toko Jaya Raya because $ why analysis is a simple analysis technique that can be understood by everyone and to find out the causal relationship that is the root cause of a problem. Here are 5 why the root cause analysis made for Toko Jaya Raya is as follows: = Dee RGIS ‘The number of ealee decreased curing pandemic Decrease inthe number of customers in the store curing pandemic, ‘Changes in customer behavior in terms of preferenes and channels, CCustomere start looking for products they want ‘to buy through online stores Cline stares sel various kinés of goods and ‘with efferent price options ‘The limited business channels they have make Root Cause it difeult for Toko Jaya Raya to increase sales. Figure 8. 5 Why Root Cause Analysis of Toko Jaya Raya According to the figure above, Starting with the problems that Toko Jaya Raya complained about due to a decrease in revenue at Toko Jaya Raya afier the Covid-19 pandemic, followed by the first why question that was answered due to a decrease in the number of sales of goods everymonth after the pandemic. From this answer, it was continued with the second question why, which was answered because of a decrease in the number of customers who came to the store even though the offline store was the only channel owned by Toko Jaya Raya. From this answer, it was continued with the third question why, which was answered because of changes in customer behavior after the pandemic. From these answers, it was continued with the fourth question which was answered because some customers who came to the store began to compare the prices sold by online stores with those sold at Toko Jaya Raya. From this answer, it is continued with the fifth question which is answered becanse it is an online store that sells a more complete variety of products with different price options. After the last question and answer, the root cause of the Toko Jaya Raya business issue was found. The root cause of the business issue experienced by Toko Jaya Raya is the limited business channels that they currently have which make it difficult for Toko Jaya Raya to increase sales. By knowing the root cause, the author realizes that for Toko Jaya Raya to increase sales even more, a change in business strategy is needed where the omnichannel strategy is the right choice to improve customer experience from a wider segment by combining every possible channel for Toko Jaya Raya. 4 Research Question and Research Objectives 1.4.1 Research Question Based on the business issue above, the author found several points that will become the objectives of questions for this study: a, What channels can be beneficial for Toko Jaya Raya to attract customer awareness? b, What channels can be beneficial for Toko Jaya Raya to influence purchase decisions? c. What combination of channels can be beneficial for Toko Jaya Raya? 1.4.2 Research Objectives According to the issue and questions above, this research objectives are: a, Determining what kind of channel can be beneficial for Toko Jaya Raya to attract customer awareness. b. Determining what kind of channel can be beneficial for Toko Jaya Raya to influence purchase decisions. €. Determining the possible combination of channels for Toko Jaya Raya. 10LS Research Scope and Limitation L5.1 Research Scope Research scope of this research will consist of five chapters which will discuss various discussions as follows: Chapter: Introduction This chapter will contain details in sub chapters such as: Background, Company Profile, Business Issue, Research Question and Research Objectives, and Research Scope and Limitation. Generally this chapter will be discussed. The purpose of making this thesis research and to help them identify their business problem. Chapter Il: Literature Review This chapter will contain details in sub chapters such as: Theoretical Foundation, and Conceptual Framework. The literature review will also consist of discussion of the references and explain why and how the author chooses the topic of study. Discussion about previous researchers. This chapter will also discuss the business situation analysis, root causes and theories that will support this research Chapter III: Research Methodology This chapter will contain details in sub chapters such as: Research Design, Data Collection ‘Methods, and Data Analysis Method. From the data collection will be contimed critique existing methodology referred to contextual problem and explanation on steps to conduct the research and how the data is analyzed Chapter IV: Result and Discussion This chapter will contain details in sub chapters such as: Analysis of this research, Proposed Business Solution, and Implementation plan & Justification The analysis will depends on the methods of collecting the data, which present the author process the findings into points that is comprehensible, solutions to the business and proposed implementation plan to Toko Jaya Raya Chapter V __: Conclusion and Recommendation In this chapter will contains details in sub chapters such as: Conclusion of the whole research, from every chapter in this research and a summary of recommendation and for the purpose of future research suggestion "1.5.2 Research Limitations This thesis was intentionally made to analyze and find issues and problems that Toko Jaya Raya is currently experiencing and lastly to solve the problem effectively. The limitation of this thesis that the author has are some limited data that Toko Jaya Raya currently has and this thesis will only be discussing business strategy, especially regarding omnichannel strategy with solutions that will be applied by Toko Jaya Raya in the future, 12Chapter II Literature Review ‘As in the previous chapter we already discussed the Toko Jaya Raya business background, their business profile, issues they have in their business, research questions, research objectives, research scope and research limitations. Now in this chapter 2, the author will continue deeper into some theoretical foundations to explain deeper with theories, and also conceptual theories which will become the foundation of this research. 11.1 Theoretical Foundation 11.1.1 Omnichannel Ellie Hickman et al. (2019) define omnichannel as an approach that arises when a business responds to changes in the nature of customers who change from one channel to a particular channel. Therefore, some businesses try to switch from one channel to another in order to stay competitive and reach a wider customer segment than usual. Omnichannel increases the use of Aigital devices in a business, so that the business can focus and build a more integrated customer approach for the business operations.a (Hickman, Kharouf, & Sekhon, 2019). In relation to creating an experience for consumers to shop on an omnichannel strategy, the ommnichannel strategy is influenced by factors such as brand awareness, perceived value, and Technology Readiness and there are three main channels in implementing the omnichamnel strategy, namely in offline, online and digital stores (Hickman, Kharouf, & Sekhon, 2019). 11.1.2 Phygital Phygital is a combination of real life marketing and online strategy that enables business people to use digital technology-based knowledge to enrich the user experience in online shopping and provide convenience for business people and customers themselves that makes it easier for Micro, Small and Medium Enterprises (UMKM) to carry out product marketing strategies in a wider range (Emanto B, 2022). The author feels that phygital is the most appropriate solution for ‘Toko Jaya Raya after seeing the condition where Toko Jaya Raya only has 1 offline store as their channel. There are so many businesses that have already used online platforms to sell and get very good results because in addition to increasing sales, these businesses can also get new prospective customers with a wider segment. 1311.1.3 Digital Promotions Digital Promotions or what is commonly called digital marketing is a marketing strategy through digital media or the internet online, The concept of digital marketing is to boost product sales from a brand by utilizing technological advances. The mumber of digital marketing services used by companies, proves that this method has many advantages and benefits that can be obtained. In terms of costs, digital marketing can be implemented at a cost other than being cheaper than traditional marketing, not only that, this digital promotion channel has other advantages which can branding more quickly, widely, and accurately (Idris M, 2022). The author realized after phygital, the result will be even better if it is supported by digital promotions which could attract customers in more effective and efficient ways than traditional marketing 11.1.4 Social Media Now that almost everyone has their own social media, social media also plays an important role in running the company's business. Social media also now has various kinds with users of each social media who are from different segments. There are so many things that are used from social media, such as increasing brand awareness, seeing feedback and even being able to analyze competitors through this channel (Firdiansyah A, 2022). The author thinks that since social media is a very common thing nowadays, Toko Jaya Raya need to have one for themselves because by being an up-to-date business, Toko Jaya Raya is expected to be able to increase its revenue in line with increasing customer awareness of the product and the store. IL.1.5 Digital Catalog Digital catalog is one of the product marketing channels which utilizes technology and the internet to distribute product information more easily and quickly. The development of the digital catalog of every business should be seen as an opportunity by business people. Through digital catalogs, businesses can reach more customers, provide a better shopping experience for customers and also facilitate collaboration with various parties because of the completeness and neainess of the catalog they have (Midtrans, 2021). The use of digital catalogs can also be profitable for Toko Jaya Raya because they can be made without incurring large costs without financing for paper and ink such as physical catalogs. 11.1.6 Customer Awareness According to the Cambridge dictionary, customer awareness is when potential customers are aware of a business and the products it offers. As potential customers know information about 14what products are being sold and what solutions are offered by a business, this can also be interpreted as customer awareness. In order to increase customer awareness, we must be able to reach customers directly without intermediaries, such as by using a communication platform so that we can reach customers directly (Layzuardi, 2021). ‘The use of various channels in business can be considered to be crucial in order to increase customer awareness. 11.1.7 Purchase Decision Fandy Tjiptono (2016) defined the purchase decision as when the customer has to make a decision of choices when they are about to buy a product or services. Purchase decision can also bbe defined as an attitude when purchasing product or services when the customer has to select more than 1 choice and the decision has to be made (Schiffinan and Kanuk, 2015). The decision will be influenced through the process while deciding on which one to purchase. According to Kotler and Armstrong (2017), purchase decisions are about a customer's decision to buy a product from a brand they choose and during the decision making process, there will be two or more alternatives to be considered before finally choosing the best one IL.2 Conceptual Framework The conceptual framework is based on the business issues found in chapter 1 and will describe the expected results if all the proposed solutions are successfully implemented. Conceptual framework shows the readers about the research model of how the author will finish this thesis research. This conceptual framework for this research will be conducted by providing a structure with a scope of research model theory. ‘Using the business issue, research questions and objectives of Toko Jaya Raya identified from chapter 1 previously to present the business with the best strategy to increase their profit, the author decided to use 2 types of analysis in this research which are thematic and generic framework analysis to find out about the business environment. To support the analysis, the author will be collecting any necessary data for the research result to be more effective and precise. 15PHYGITAL, DIGITAL PROMOTIONS (CUSTOMER AWARENESS SOCIAL MEDIA DIGITAL CATALOG PHYGITAL, DIGITAL PROMOTIONS SOCIAL MEDIA DIGITAL CATALOG Figure II.1. Omnichannel Strategy Conceptual Framework for Toko Jaya Raya PURCHASE DECISION ‘As shown from the conceptual framework above, the first framework in the box on the left there are 4 independent variables that will be proposed as a solution for this research which are Phygital, Digital Promotions, Social Media, and Digital Catalog. At the end of the conceptual framework will display the dependent variables as the results to be achieved from the solutions proposed by the author which are expected to attract customer awareness. The second framework also has the exact same independent variable and what makes it different is that this second framework has the dependent variable on the customer's purchase decisions. If it has been realized, the two dependent variables are expected to be a solution that answers the problems that Toko Jaya Raya has. 16CHAPTER III Research Methodology ‘As in the previous chapter we already discussed the theoretical foundation for this research and the conceptual framework as the basis of this research. Now this chapter will discuss anything related to data research design, data collection method and data analysis method of how the author carries out the research process. This chapter mainly discusses research methodology which is the method of how the author does the research to answer research questions that are already mentioned in chapter 1 TIL1 Research Design This research is supported by data obtained from a survey conducted by the author and the results of the survey indicate which one has the greatest effect on customer awareness, and their purchase decisions. The author hopes that with this data, we will get data about the most effective channel for Toko Jaya Raya. This research design carried out by the author described as follows: a. Problem Exploration. This research started from the problem statement as the first step. The author will interview the ‘owner of Toko Jaya Raya and ask everything related to the business to find their business issue. b. Research Objectives Definition, After the business issues have been collected, research objectives were found and defined which narrow the author's focus on this research and then everything summarized through 5 whys analysis to find out the root cause and to get the best solution for Toko Jaya Raya. c. Data Collection. Through this step, the author will make a survey to collect data from the potential customers of Toko Jaya Raya which will support the effectiveness of each proposed variable as a solution in ‘the conceptual framework d. Business Solutions. Afier the author went through all the steps before, all the issues were solved and the best ‘omnichannel strategies as a solution for Toko Jaya Raya were formulated. ¢. Implementation Plan. ‘As the last step of this research, the author will propose the implementation plan for Toko Jaya Raya. 17‘TIL2 Data Collection Method Data collection will discuss mostly about what type of data that the author is going to use and the data collection method: TIL.2.1 Type of Data Data provided in this research described as follows: a. Primary Data. Primary data of this research was collected through necessary questionnaires. This kind of data is needed for this research to find out information related to Toko Jaya Raya and any data necessary for supporting the proposed business solution. ‘The author interviewed the owner of Toko Jaya Raya to collect data about the business and for the author to be able to visualize the business issue experienced by Toko Jaya Raya more clearly because any questions that the author wants to ask for the purposes of this research answered directly through the interview. Questionnaires spread through random customer of Toko Jaya Raya as the respondent with criteria as follows: Table ITT.1. Research Respondent Criteria Criteria Desc. Existing Customer] Potential Customer [Demographic Jakarta Barat ‘Jabodetabek Age 18-70 Years Old | 18-40 Years Old [Ever bought electronics products Yes Yes [Ever shop online YesiNo Yes ‘The research respondent criteria above was made through considerations after doing interviews with Toko Jaya Raya owners about their customer characteristics. The author was told in an interview that because there is only one business channel from Toko Jaya Raya, Toko Jaya Raya customers can only shop through coming to the store. Customers who come to Toko Jaya Raya are between 18 and 7 years old. The author was also told that their customers come to the store for various purposes, some of which are for personal use, to resell the product, repair damaged electronic goods, electronic services and hobby assembling electronic components 18b. Secondary Data. Secondary data of this research collected through trusted sources such as journals, articles, books, and other sources that can be beneficial to support this research. This kind of data is needed for this research to help the author with a more complete explanation, IIL.2.2 Collection Method Data collection method for this research described as follows: a. Questionnaire Survey. Through surveys, the author is able to collect primary data by giving questionnaires to every respondent that visits Toko Jaya Raya. The purpose of making this survey is to find out the most effective channel for Toko Jaya Raya to customer awareness and their purchase decision through customer's preferences, experiences and their opinion about Toko Jaya Raya. Before doing the survey, every respondent divided into each persona based on target market and from that persona, it divided into different segments. After that, we will see the difference in their behavior, and then check each segment to each of the 5 variables in the conceptual framework. By using all the survey results collected, cluster analysis can be made by grouping a group of respondents into small clusters with each different characteristics to find groups of respondents with different behavioral changes but have underlying characteristics and these things are in the same group. b, Literature study. The author carries out literature study in order to collect secondary data available to support this, research by gathering information needed through journals, studies, intemet, articles, books, and other beneficial references available. ‘TIL3 Data Analysis Method This research thesis for Toko Jaya Raya was made through research and surveys. According to Sugiyono (2020), The research method with surveys is research carried out using questionnaires as a research tool carried out on small or large populations, but the data studied are data from samples taken from the population, so that relative incidence, distribution, and relationship between variables, sociology, and psychology. The purpose of this survey research is to provide a detailed description of the background, characteristics, and characteristics of a case or event of a general nature by using quantitative research method. 19Sugiyono (2020) defined quantitative methodology research method as a research method based on the positive philosophy, used to examine the population of a particular sample, data collection using research tools, quantitative or statistical data analysis with the aim of testing the established research hypothesis. The research was conducted using a quantitative research method because the data needed to support this research is in the form of numbers shown in the form of visual graphics which are the result of calculating and measuring the value of each variable, The quantitative data obtained through questionnaires for this research aims to determine customer channel preferences, their awareness and their purchase decision Questions used for the questionnaires were made according to some reference as a source to effectively support the variable dimensions in the conceptual framework. The explanations will bbe described as follows: 1. Measuring phygital According to Pastezeur (2017), the physical and digital approach is almost non-existent for millennials where $2% of them access products through both offline stores and the intemet. Combination of both the physical and digital approach could create a new experience that impacts the business and for that reason this combination is already applied by many businesses all around the world. Previous research reveals that customer experience will become the main issue for the business so we need to understand the typologies and components in order to create the most effective and unique customer experience (Batat, 2018). Cesconi, F, & Franzoni, G. P. (2020) explained that measuring the phygital transformation started from identifying what needed to be measured, the target customers and setting expectations. They also mentioned that there are dimensions of measurement needed such as the customer operational dimension (customer interactions), business operational dimension (customer needs fulfillment), and dimension of customer satisfaction of their buying process journey. Questions about phygital for the questionnaire: a. I want the products sold at the Jaya Raya online store to also be sold at the Jaya Raya offline store. b, I want the Jaya Raya online store to display the updated stock of items that are also sold at the Jaya Raya offline store cc. I want the Jaya Raya online store to display the updated stock of products sold at the Jaya Raya offline store 204. I am happy if buyers can pick up their bought products directly at the Jaya Raya offline store even though they shop online e. Tam happy if purchased products online can be returned with clear evidence if something goes wrong with the produets £ Lam happy if the Jaya Raya online shop provides a variety of payment methods such as Ovo, Gopay, Bank Transfer, Dana, ete. 2. Measuring digital promotions The concept of digital promotions in a simple explanation means marketing the products and services to increase sales, attract customers, and retain customers through digital platforms and technologies that have unlimited potential with the internet (Ghahremani Nahr et al., 2021). Some digital promotion channels provide objective and quantitative metries through web analytics that help in strategic decision making where the result will be depending on the budget of the business and data accuracy. (Saura et al., 2017). Questions about digital promotions for the questionnaire: a. Like to see digital promotions that have attractive image/video designs b. Lam happy with digital promotions related to discounts c. Tam happy with digital promotions related to cashback d. Iam happy with digital promotions related to free shipping 3. Measuring social media According to Will Cannon (2021), measuring the social media preference for the omnichannel strategy can be done by identifying key social marketing channels preference from the customer, building the business personal branding in the social media and starting to engage prospective customers to reach a wider segment. Mariani et al. (2018) described 3 metrics of social media such as generic engagement, user engagement and brand engagement which are being calculated by assessing them into different interaction actions through underlying activities of liking, sharing, or commenting. Questions about social media for the questionnaire: ‘a. I want Toko Jaya Raya's social media accounts to upload posts about product information being sold b. Iwant Toko Jaya Raya's social media account to upload posts about current promos 21c. I want Toko Jaya Raya's social media accounts to provide education about electronic g00ds d. I want Toko Jaya Ray's social media accounts to actively reply to chats during working hours 4. Measuring digital catalog According to Publitas research (2014) by looking at the demographics about gender distribution of digital catalog users mostly come from female users in around 61% of total users. By looking at the interest of digital catalog users, shopping digital catalog is the most interesting category and followed by news and sports catalog. We can also find out the information about traffic distribution per device category, average customer visit duration, when digital catalog viewed the most, and other customer preferences of accessing the digital catalog. Questions about digital catalog for the questionnaire: a. I want Toko Jaya Raya to provide a complete and informative digital catalog of its products b. want Toko Jaya Raya's digital catalog to display product photos clearly c. I want Toko Jaya Raya's digital catalog to be easily accessible to all devices d. want Toko Jaya Raya to always provide the latest digital catalog 5. Measuring Customer Awareness According to Siddique & Hossain (2018), customer awareness will be connected to the customer recognition of a product and recalling the product they might remember. The previous study mentioned that customer awareness are connected with customer product usage history (Sharma & Trivedi, 2016) Questions about customer awareness for the questionnaire: a. Ilike to check promos every week on social media, Tokopedia, Shopee, etc. b. Tam constantly checking the media for new products I might find useful ¢. Sales admin from shopee, tokopedia, etc. can be my source of product information 4. Influencers from Youtube, TikTok, ete. can be my source of product information 6. Measuring Purchase Decision According to Kotler (2018), there are 4 factors to be considered in order to determine customer purchase decisions which are product stability, customer behavior in buying products, and recommendations to purchase the products and while making the purchase decision, thecustomer will go through process started from identification, searching for information, product alternatives evaluation to be considered, making the purchase decision and lastly there will be behavior after purchasing the product (Kotler, 2017) Questions about purchase decision for the questionnaire: a. Lalways find out about the product information being promoted before making a decision to buy b, Lalways consult with friends or family about the product I want to buy before making a decision to buy it ¢. Lahways compare a product with other products before making a decision to buy d. Price is an important factor for me in making a decision to buy a product fe. The quality of goods is an important factor for me in making a decision to buy a product Affer the author conducted the survey, the data obtained would be in the form of quantitative data which would later be processed and tested through IBM SPSS as the tools used by the author in conducting statistical analysis. The author will start by proving the feasibility of the data through validity and reliability tests. After the data has been proven valid and reliable, the data will be used again to find the regression in order to prove that there is a regression from the independent variables to the dependent variable in the conceptual framework in chapter 2 so that the author can later provide more accurate and precise business solutions, 23CHAPTER IV Result and Discussion ‘As in the previous chapter we already discussed the research methodology which includes the research design, data collection method and data analysis method of this survey. The research done exactly as what was already mentioned by the author in chapter III and the result and discuss will be explained here in chapter IV. Now this chapter IV will mainly discuss the result that the author collected from the survey and discussion about business solutions, implementation plan and justification to be proposed for Toko Jaya Raya. The analysis will discuss the survey result that has been analyzed by using IBM SPSS which is very helpful for the author to get the right statistical results to determine the analysis result, business solutions and implementation plan for Toko Jaya Raya IV. Analysis This subchapter will mainly discuss everything regarding the analysis to this research, starting from the findings through the survey done by the author until the analysis result which was personally analyzed by the author. The analysis shown in this chapter was made according to the methodology explained in the previous chapter. IV.1.1 Findings Based on the data obtained through the survey of 203 respondents who meet the criteria to fill in the questionnaire, the result will be helpful for the author to finish this research. The findings from the survey will also help the author to make the right strategy for Toko Jaya Raya. According to the survey result of 203 respondents, the author found out that 70.4% of the 143 respondents are male and the female only 29.6% of the respondents which are 60 respondents as shown in the figure below 25Jenis kelamin 203 responses Figure [V.1. Survey Findings: Respondent's gender Even though the male respondents are the majority out of all the respondents, we can not conclude that the male is the one who always buys electronic products. This does not preclude the possibility that many women also shop for electronic products. Next criteria will discuss the respondent's age. For this survey, the author decided to divide the age section into 4 choices which are 18 to 30 years old, 31 to 40 years old, 41 to S0 years old, and more than 51 years old as shown on the below. Usia 203 responses Figure IV.2. Survey Findings: Respondent’s Age We can see from the result on the figure above, 63.5% of the total respondents which are 129 respondents are around 18 to 30 years old. 29.1% of the total respondents which are 59 26respondents are around 31 to 40 years old. 6.9% of the total respondents which are 14 respondents are around 41 to 50 years old. Lastly for the age more than 51 years old is only 0.5% which is only 1 respondents, Next criteria will discuss the respondent's domicile as shown on the figure below. Domisili 203 responses Bogor Depok Tengerang @ Beast {© Tongerang Selatan @ Banding @ bonny Figure IV.3. Survey Findings: Respondent’s Domicile Looking at the figure above, we can see that the majority of the respondents have a domicile in Jakarta which is around 70.4% of the total respondents, which are 143 respondents. 17.7% of the total respondents have a domicile in Tangerang, which are 36 respondents. 4.4% of the total respondents have a domicile in Bekasi, which are 9 respondents. 3.4% of the total respondents have a domicile in Depok, which are 7 respondents. 2.5% of the total respondents have a domicile in Bogor, which are 5 respondents. 0.5% of the respondents have a domicile in Tangerang Selatan with only 1 respondent and lastly the rest 2 respondents are from bandung. ‘Next criteria will discuss the respondent's jobs as shown on the figure below. 27Pekeriaan 209 responses Pebgjar Kargawan Swasia @ Karavan BUNNY @ Pengusaha © Doster © tb Rumah Targgs @ Ibs rumah tanaga © Fresiancer ny Figure IV.4. Survey Findings: Respondent’s Job According to the figure above, we can see that the majority of the respondents are private company employees and entrepreneurs. 58.6% of the total respondents which are 119 respondents are private company employees. 24.1% of the total respondents which are 49 respondents are entrepreneurs. 12.3% of the total respondents which are 25 respondents are students. 1.5% of the total respondents which are 3 respondents are BUMN employees. Lastly the rest of the respondent works as a doctor, freelance, and teacher. Next criteria will discuss the respondents monthly income as shown on the figure below. Penghasilan per bulan 203 responses Rp 2.000.000 2.000 000 - Rp 6.000.000 ‘@ R900 000- Rp-8.000.000 (@ > Fps.000.000 Figure IV.S. Survey Findings: Respondent’s Monthly Salary According to the figure above, we can see that the author divided the monthly salary range into 4 choices which are less than Rp2.000.000, around Rp2.000.000-Rp5.000.000, around 28Rp5.000.000-Rp8.000.000, and more than Rp8.000.000. The majority of the respondents have their monthly salary around Rp 5.000.000 - Rp 8.000.000 which are 48.3% of the total respondents which are 98 respondents. 37.4% of the total respondents which are 78 respondents have their monthly income more than Rp8.000.000. 11.3% of the total respondents which are 23 respondents have their monthly income more than Rp2.000.000-Rp5.000.000. The remaining 3%, which are 6 respondents have their monthly salary less than Rp2.000.000. After the demographics section, the survey will go into the questions section to test the conceptual framework variables which include phygital, digital promotions, social media, and digital catalog which the result shown as table below. ‘Table IV.1. Survey Findings: Respondent's Interest Rate Survey Respondent's interest Scale Question 7 2 3 @ 3 Pa 0.0% 0.0% 69% 60.1%, 30% 2 0.0% 0.0% 3.4% 50.2%, 45.3% P3 0.0% 0.0% 5.0% 55.0% 40.1% PA 0.5% 10% 45% 49.5% 44.6% PS 0.0% 0.0% 44% 50.7%. 408% P6 0.0% 0.0% 34% 38.4% 58.1% Pt 0.0% 05% 182% 46.5%, 35.0% DP2 0.0% 0.0% 11.3% 37.4% 512% DPS 0.5% 2.0% 17% 4% 35.0% Ps 0.0% 0.0% 11.396 36.9% 49.8% sm 0.0% 25% 187% 45.5% 33.5% 'SM2 0.0% 1.0% 13.8% 39.0% 45.9% ‘Sms 0.0% 2.0% 14.8% 468% 36.5% ‘SMa 0.0% 1.0% 12.8% 40.4% 45.8% Det 0.0% 1.0% 245% 41.0% 32.5% e2 0.0% 1.0% 202% 41.0% 36.9% De3 0.0% 1.0%. 187% 47.3% 33.0% Dea 0.0% 1.0% 182% 44.3% 38.5% cAI 44% 13.3% 248% 35.5%. 22.2% caz 4.0% 14% 26.2% 30.7% 227% cas 05% 69% 20.2% 42.0% 29.6% cad 1.0% | 44% 23.8% 39.9% 31.0% Pot 0.0% 0.0% 74% 43.0% 49.8% Poa 0.5% 05% 10.4% 38.8% 50.0% PDS 0.0% 0.0% 84% 43.5% 48.3% PDs 0.0% 0.0% 45% 38.1% 58.9%: PDS 0.0% 0.0% 54% 379%. 56.7% According to the figure above, there are 6 sections of the question, each of which tests each variable in the conceptual framework, namely the "P" code for Phygital, the "DP" code for 2gDigital Promotions, the "SM" code for Social Media, the "DC" code for Digital Catalog, code A" for Customer Awareness, and code "PD" for Purchase Decision. The numbers for each section show the order of the number of questions in that section and each question will have a choice of answers based on the interest scale of each respondent. IV.1.2 SPSS Result The data obtained through the survey of 203 respondents will be tested for the validity and reliability of the data by using IBM SPSS. After the data already passed the validity and reliability test, then the author chooses the regression analysis to measure the value of one independent variable to the dependent variable ‘Validity test is a test that is used to measure whether or not a questionnaire is valid and the questionnaire can be said to be valid if the questions on the questionnaire are able to reveal something to be measured by the questionnaire or if the test carries out its measuring function, or provides precise and accurate measurement results according to for the purpose of carrying out the test. In this validity test first of all, the author must input all data fom the questionnaire results to be tested for validity. The results first show the factor matrix of the survey as shown in the figure below. 30Table IV.2. Factor Matrix. "Total Variance Explained ran Sums of Squared ‘dings neal Ege males ol | Com of Cama roat_| varionce | SCH | toat_| venunee | Ses Tass | arses | areas | ssa] 3459s | M50 3003 | 11a4s | 49130] 2.208 | 9.167 | 42.762 2.75 | 10082 | se22z| 2670| 9.887 | 52.649 2a | 1.956 | 97.082 451 | 1670 | 8.752 2n| 100s | 93597 ass | saa | ones 24s | 906 | 95481 tas | 798 | 96.248 fz | sae | g6.a95 haa | ‘sa | 97534 ue | ‘532 | 8065 naa] 43 | oasse roa} 400 | sa0se oo7 | ase | oo.i6 o7e | 209 | 99.605 ‘3: When factors are coralated, sums of squared loadings cant be added to obtain ato According to the factor matrix above, the data was extracted by using maximum likelihood as the extraction method and we should know that the data studied has 6 influencing factors which are also the variables to be studied as already mentioned in the conceptual framework in chapter 2. Not only with the factor matrix, the validity test also comes up with a pattern matrix as shown in the figure below. 31Table [V.3. Pattern Matrix Pattern Mati Fear Por 924 poz 629 Pos 903 Pos 730 Pos 350 Tavaclon Wethod: Waxinum Uke hood ‘Rotation Method: Oblmin wth kalser Normallzaton.* 1. Rotation converged in 6 kerations ‘Along with the factor matrix, the result will also come out with a pattem matrix which shows the validity of the questionnaire. The pattem matrix above shows that the questionnaire is valid even though there are issues with the 220 in column 3 and -.214 in column 6, they are considered to be valid because these numbers are smaller than the variable it collides with. After the author is done with the validity test, the author continues to start the reliability test to test and to obtain information that can be used reliably as a data collection tool and able to reveal actual information in the field. A questionnaire can be considered to be reliable if one’s answers to statements are consistent or stable from time to time. High and low reliability, empirically indicated by a number called the value of the reliability coefficient. High reliability is indicated by an r value close to 1. Generally agreed that reliability is considered satisfactory if = 0.700. This reliability test will be discussed one by one of each variable from the coneeptual framework 32which are phygital. digital promotions. social media, digital catalog, customer awareness and purchase decision. The author will start to explain the result from phygital as shown below. Table IVA, Reliability Test of Phygital for Toko Jaya Raya Reliability Scale: PHYGITAL Ta Vai ae excuded? 5 7 tice deevon bases ona \artbies nthe paced Reliab Statistles cba | Wat 7 = Looking at the reliability test above, we all can conclude that the variable data tested is for the phygital variable as the first independent variable according to the conceptual framework and it is considered to be reliable because the score from reliability statistics is .899 which is close to 1 and also more than .700. Next is for digital promotions as shown below Table IV.5. Reliability Test of Digital Promotions for Toko Jaya Raya Reliability Scale: DIGITAL PROMOTIONS ase Processing Summary 7 roa | Ho The reliability test above showed us that the variable data tested in this section is for the digital promotions variable as the second independent variable in the conceptual framework. This result 33is considered to be reliable because the score from reliability statistics is .843 which is close to 1 and also more than .700, Next is for the social media reliability test as shown below, Table 1V.6. Reliability Test of Social Media for Toko Jaya Raya Reliability Scale: SOCIAL MEDIA w Cases vali 705 | 1000 bxduded | 0 | 0 teat__| 203 | 100.0 Litas deletion based onal varlables ine procedure Taba | Not sApha | ems ore z According to the data shown above, we can conclude that the data tested in this section is for the social media variable as the third independent variable in the conceptual framework. Looking at the result, we can know that the data is reliable because it also gets .914 which is more than 700 and close to 1. Next is for the digital catalog. reliability test as shown below. Table IV.7. Reliability Test of Digital Catalog for Toko Jaya Raya Reliability Scale: DIGITAL CATALOG Case Processing Summary ~L® Cases Vale 205 | 1000 exudes} 0 | 0 Tout 203 | 100.0 7 Ustwise deletion based onal ‘arabs nthe procedure, Reliability Statistics Torta | Wo Neha | ems 3a z Figure above showed us that the reliability test is for the digital catalog variable as the fourth independent variable in the conceptual framework. This variable got .962 for the result and itis 34also considered to be reliable because the result is close to 1 and more than .700. Next is for the reliability test of dependent variables of the framework which are customer awareness variable and purchase decision variable as shown below: Table IV8. Reliability Test of Customer Awareness for Toko jaya Raya Reliability Scale: CUSTOMER AWARENESS ase Processing Summary 7 Taser vaid | 203 | 1000 eeused} 0] 0 teat__|_ 203 | 100.0 ‘arabes inthe procedure Relat Statistics Tame | Nat Reahs | heme oe z According to the data above, this reliability test is for the customer awareness variable as the first dependent variable in the conceptual framework. We can see that this variable got .916 as its results and it can be considered to be reliable because it is close to 1 and more than .700. Next is for the purchase decision variable as shown below. Table IV9. Reliability Test of Purchase Decision for Toko Jaya Raya Reliability Scale: PURCHASE DECISION ase Processing Summary Cases vans] 203 | 00 excuses} o| 0 Tr Lawvae deleion based on a Aetabiey Staxistes core | Nar 35From the data above, we know that this reliability test is for the purchase decision variable as the second dependent variable in the conceptual framework. Looking at this data, we can conclude that the data above is reliable because the result got 913 point which is also more than .700 point and close to 1 point. After the author is done with the reliability test, the author decided to choose the regression instead of correlation because if we look at the framework in chapter 2, the purpose of this research survey is to find out the relationship that the independent variable on the left side of the framework has to the dependent variable as the outcome and not the correlation of each variable. In order for us to find out which of the independent variables has the best outcome to be accepted by the dependent variable, the t-score (1) needs to be higher than 1.96 point and the significant point (sig.) needs to be smaller than .05 point. ‘Table IV.10. Regression coefficient table Coefficients* Unstandardized Coefficients Std. B Error (Constant F “568 PHYGITAL : 140 DIGITALPROMOT! ‘ONS. : 124 SOCIALMEDIA : a T) DIGITALCATALO 099 a. Dependent Variable: CUSTOMERAWARENESS According to the regression result above, we can see that phygital, digital promotions, and social media do not meet the criteria to pass this regression test because the phygital got .751 point for the t-score which is smaller than 1.96 point and got -453 point for the significant point which is bigger than .05 point. Digital promotions also do not meet the requirements because the t score only gets 1.587 point which is smaller than 1.96 point and .114 point for the significant point which is higher than .05 point. Social media can not be accepted as well because the t-score only got 1.563 point which is smaller than 1.96 point and for the significant point only got .120 pointwhich is higher than .05 point, Although the three variables above are can not be accepted for the customer awareness variable regression, the fourth variable which is digital catalog can be accepted because it got 3.287 point for the t-score which is higher than 1.96 point and it got .001 point for the significant point which is smaller than .05 point. Table IV.11. Regression coefficient table Coefficients* ‘Standard ized Unstandardized | Coefficie Coefficients nts Sid. Model B Error Beta t Sig. 1 (Constant) 2.006 341 5.878 | 000 PHYGITAL 303 084 260 | 3.604 | .000 Sug ALPROMOT! 176 075 1s9 | 2.358 | .019 SOCIALMEDIA -.129 .067 | -.156 | -1.938 | .054 CGTALCATALO 218 .059 .282 | 3.679 | .000 a. Dependent Variable: PURCHASEDECISION Looking at the figure above, the regression to dependent variable of purchase decision have a different outcome than the customer awareness before. The independent variables that can be accepted are phygital, digital promotions, and digital catalog. We can see that the phygital variable can be accepted because its t-score reached 3.604 point which is higher than 1.96 point and it has .000 significant point which is smaller than .05 point. The digital promotion can also be accepted because it has 2.358 t-score points which is higher than 1.96 point and .000 significant point which is smaller than .05 point. Digital catalog can also be accepted as well because it has 3.679 t-score point which is higher than 1.96 point and a significant point of 000 which is smaller than .05 point. Although three of the variables above can be accepted, social media is the only one that cannot be accepted this time because it has -1.938 t-score point which is smaller than 1.96 point and it has .054 significant point which is slightly higher than .05 point. From the 2 regression result of customer awareness and purchase decision above, it is proven that there are influence from digital catalog over customer awareness and also influence from 37phygital, digital promotions and digital catalog over the customer purchase decision so to continue the research the author can make the best strategy as a solution for Toko Jaya Raya. IV.2 Business Solution As we already discussed in IV.1 about analysis of this research, the author came up with some ideas which can be considered to be the business solutions and hopefully these solutions will be helpful for Toko Jaya Raya to increase their profit through gaining customer awareness and influencing customer purchase decisions. IV.2.1 Advertise with Digital Catalog Through Digital Platform According to the regression analysis of customer awareness dependent variable, Digital catalog will be the only channel to be effective to the customer awareness. Considering that one of the components of the promotion mix is advertising, advertising is a paid promotion service and is one of the most common promotional tools used by a business in conveying information about the products it sells and is able to increase interest and interest from potential customers who see the advertisement. Along with today's technological developments, advertising is now generally done digitally Through digital platforms, every business is able to disseminate information about products that are widely offered more efficiently and effectively. The author thought of one strategy by advertising the product of Toko Jaya Raya through digital catalog banners posted through possible digital platforms such as Tokopedia TopAds, Shopee Ads, Facebook Ads, Google Ads, TikTok Ads, etc. In advertising with a digital catalog, you will need at least a banner containing the products that people are most interested in with photos, a brief description and the price of the product. If we can make an attractive design, that would be great because it will definitely be of added value to potential customers who see the advertisement. The most important thing before we are going to advertise our product, we need to make sure first that our business digital platform is ready to be visited by a lot of people. Whether it is social media or online shop or offline shop, we have to make sure that affer the potential customer sees the advertisement, they can know where to find us. Pros: 1, Discovering a wider segment, advertising through digital platforms allow us to reach a larger group of people with an unlimited number of potential customers. Not only can 38advertisements reach a wider segment, we can also specify the target potential customer with our own criteria just to make sure the advertisement reaches the right person. 2. Brand Recognition. The more advertisement reach potential customer, the more people will recognize our brand, also the more people will consider to buy electronics products from Toko Jaya Raya Cons: 1. Cost. The more potential customers that the advertisement reaches, the cost will keep increasing, So if we want to reach a much wider segment, we need to prepare some budget. ‘An advertisement is often ignored by consumers because it is often stacked with other advertisements TV.2.2 Sign Up for Every Possible Digital Platform Marketplace According to the regression analysis of purchase decision dependent variable, phygital is proven to be effective to the customer purchase decision. Since the offline store is already operating until now, what we need to do is to start signing up for a new online store as a new channel of Toko Jaya Raya especially when today's era already has very advanced technology and also many businesses nowadays use technology and digital platforms to run their business. The author recommended Toko Jaya raya to sign up for Tokopedia, shopee, ete. as it is the largest digital platform marketplace in Indonesia. Digital Platform Marketplace is one channel that allows us to sell products through the internet and everyone will be able to come to the online store anytime that they want and have a leisure time to check every product that we sell. Even though usually most of the people would prefer come to the online store to be able to check on the product conditions before purchasing the product to avoid getting a broken product, the digital platform nowadays already has insurance to offer to make sure if the product purchased is broken when it arrived, the customer can always return the product with full refund and of course a proof of evidence is needed to proceed. Looking at the survey, the majority of the respondents also agree with these terms as it is already a common thing nowadays since many online stores applied these conditions as well. Looking at the results of a survey conducted by the author, there are a number of things that must be taken into consideration in opening an online store, namely not to differentiate goods sold in offline stores and online stores, stocks that must always be updated when selling online, allowing 39buyers to pick up their goods directly at the store. even though buying it online, and also provides a variety of payment methods so that customers can have the best choice to pay for the products they buy. Pros: 1. With the development of today’s technology, everything becomes easier to run. Online stores can be easily registered anywhere and anytime and everyone of all ages has the same opportunity to open an online store. 2. The market reach is very broad because anyone can access the online shop and the distance between buyers and sellers no longer exists because of very supportive delivery to all places. 3. The capital required is not too large because you do not need a place to open a store anymore. Only having 1 device, the intemet, and also the product you want to sell is enough. And the employees needed are also not too many. 4. Flexible time and place of work because we can work whenever and wherever we want because the most important thing is we only need to bring our device and the internet. Cons 1. Competition is intense because through an online platform, everyone can sell and everyone who sells will be brought together on the same platform. The uniqueness of what is sold is needed to compete in this world. 2. Uncontrolled public comments and reviews because through online everyone can freely comment and provide reviews as they wish. The reputation of brands and online stores ‘will be threatened if someone gives bad reviews or fake reviews. 3. Dependence on intemet connectivity because without the intemet, these business activities cannot run. 1V.2.3 Optimizations of Digital Promotions by Using Social Media According to the regression analysis of purchase decision dependent variable, Digital Promotions is proven to be effective to the customer purchase decision. Digital promotions means to give promotions of the product we sell by using online media digital platforms. By using social media to optimize the spread of digital promotions, we can reach as many people as we want. 40east Figure IV.6. Katadata Survey Results Regarding Internet Users Aged 16-56 Years (Source: Katadata Insight Center (KIC), 2021) Looking at the data above obtained through the survey where the majority of respondents from the survey were 18-30 and 31-40, the most appropriate social media to use is Instagram & Whatsapp. According to GlobalWebIndex, Instagram is the favorite social media for generation Z, which is now around 16-23 years old, and the millennial generation with an age range of 24-37 years likes Whatsapp as their favorite social media (Pusparisa, 2021). By spreading digital promotions through social media, this will also invite many people to come to social media to see promotions that are currently in effect, especially for promotion seekers. Pros: 1. Marketing activities are easier where because everything is completely digital, distributing digital promotions to potential customers is easier only via the intemet. In carrying out digital media marketing, targets can also be set according to the criteria to be achieved. 2. Social media can also be a means of direct communication with prospective customers which can be done 24 hours a day and can interact directly with potential customers. Cons: 1. Many competitors from Toko Jaya Raya have also used social media and other digital platforms to carry out their promotions digitally. Therefore, Toko Jaya Raya must create promotions that are different from the others, such as providing bigger discounts, faster delivery, bonuses that you get when shopping at Toko Jaya Raya, ete. a2. It takes very interesting creativity to differentiate the digital promotions provided by Toko Jaya Raya from other competitors because many promotions are also carried out by other businesses at the same time. 1V.2.4 Create An Attractive, Informative, and Neat Digital Catalog According to the regression analysis of purchase decision dependent variable, digital catalog is proven to be effective to the customer purchase decision. Based on the respondent’s answer from the digital catalog section and purchase decision section, digital catalogs must be well made, complete, informative, with clear photo displays, accessible by various devices and must always be updated with the latest version if there are changes. Purchase decision survey questionnaire results show that before potential customers make a decision to buy a product, they tend to seck information about the product before buying it. Through this result, we can conclude that through an informative digital catalog, it can help convince potential customers to make a purchase decision to buy a product. The survey results have also stated that prospective buyers always compare a product with other products before buying, which means that if a digital catalog is able to provide a variety of products that can be compared with one another by listing the advantages and disadvantages of a product, then this digital catalog will really helps potential customers to make a purchase decision to buy a product. The last one as a determinant of the purchase decision to buy a product is the price offered by Toko Jaya Raya and the quality of the goods offered itself. Will require consideration of the price and goods to be sold in order to attract the attention of customers to encourage their purchase decision. Pros: 1. Digital catalogs can be read by potential customers anywhere and anytime. So that they can casually read it comfortably. 2. Digital catalogs can be an effective and efficient way of product promotion. 3. Digital catalogs can indirectly help communicate with consumers who do not need to waste a lot of time answering general questions about products. Cons: 1. Too much and dense information about products can give a thick and boring impression so that in making this digital catalog, it will be a challenge where we have to convey complete product information but not too dense. Too much information provided can also make not all information readable so that impostant information can be unreadable. 422. Deployment of a digital catalog to the wrong target will be futile in that the digital catalog may not be read or even worse may not be opened at all. TV.3 Implementation Plan and Justification Implementation plan of the business solution from the subchapter above will be presented to Toko Jaya Raya. This implementation plan consists of the action planning and the KPI of the plan integrated with a managed monthly schedule for 1 year. The plan can be started right away in January 2023 until December 2023. The table below will show us the implementation plan. ‘Table IV.12, Quarter 1 Implementation Plan for Toko Jaya Raya 2a No. | Susiness sotution [Ravers with Digital [catalog throush Digital Piatorm [Aaverto to 10.000, Uerforthe Fst 3 ‘mont [Review adveriaarant engagement reeut [Sign Up for Every [Preparing to o>en Posstse Digtal” (crime sore. products Platform Marketplace |shol, product escrpton. et Posing products to vel Into exoeon igtl latoon marketplace lGptimizatone Digital |Croate Social Meda JPromotions by Using |scsmunt 3 [Social media Posing grat promos though [create An Attractive, ntormatve, and Nest Digital Cataiog nade to poteriat (sstomers va sda media or ther gta ptatorns. Table above showed us the implementation plan of Toko Jaya Raya for Quarter 1 which started from 1 January until 31 March 2023. All the action plans have been scheduled properly with different colors and need to be monitored every week. aTable IV.13. Quarter 2 Implementation Plan for Toko Jaya Raya ‘Action Plan we No. | Business Solution ‘pe May June Weeks t2[s[s[2[s[els [2 [spe [Advertise with Digtal_[Mako now dial Catalog Through |cataog banner for Digital Platorm | advorsing Review ist mont lacversing recut 1 reper. Keep tying io revse ns acvertsement lrtena baced on tho best engagement Jandy wo reacn }20.000 pecs ‘San Up forEvery [set Uorew argot Possible Digital |sales foreach gta! Platform Marketplace. |piatorm markagace 2 [Continuing sales rom onine soo pian sues (Optimizations Digital [Posting digtal Promotions by Using promotions though ‘Social Media str foods. oc 3 Posting a go0a monthly esr to potent eusorer (Create An Attractive, [Designing Diatal Informative, and Me Digital Catiog ‘Table above showed us the implementation plan of Toko Jaya Raya for Quarter 2 which started from 1 April until 30 June 2023. All the action plan have been scheduled properly with different colors and needs to be monitored every week. 44Table IV.14. Quarter 3 Implementation Plan for Toko Jaya Raya ‘Action Plan 2078 io, | Business Solation uly Au ‘September 2 2 Weeks s[2isfala [4 23/4 "Advertise with Digital Nake new digfal ‘Catalog Through catalog banner for Digital Platform aaverising Rowewr ast month ‘veriang resul 1 recor. Keep tying orevaw Ime soveriseren cera based onthe best engagemont ans try te reach 40.000, people ‘sign Up for Every Sei Up new tage [Possible Digtal” sales foreach dial ‘Platoon Marketplace promotion trough Sion, feeds, ee a “ry imerecing wih lator rough \wmatsaze or emai polenta customer eve ‘Greate An Airactve, Desiring Dia Informative, and Nest Cataiog own Digital Catalog vend and customer preference ‘Share the dtl 4 catalogs rat has boon made to potential customers (a socal media or ter cial piaforns. ‘Table above showed us the implementation plan of Toko Jaya Raya for Quarter 3 which started from 1 July until 30 October 2023. All the action plans has been scheduled properly with different colors and needs to be monitored every week. 45Table IV.15. Quarter 4 Implementation Plan for Toko Jaya Raya 72008 ‘Action Plan No, | Business Soluti Weeks 213 (Advertise with Digital [Maks new cigtal catalog banner for ladversing [Review os: month advertising resuit resent. keep tying w rev ine advertisement lrtena bases on the best engagement and ry to reac 80.000 pecs [Sign Up for Every [Set Up new trust Possible Digital sais foreach cigtal Platform Marketplace [platform markotiaco [Usdatine products stock [Optimizations Digital |Postng aga year [Promotions by Using fend promotions Social Media trough story, feeds, let. [Aint have 80 repeat orser customer [Posting a goo monthly fering to potenti customer lever, [Greate An Attractive, [Designing Digial Informative, and Neat |Cstsioq flowing [Digital Catalog werd and customer preterence [share the dial ‘ Jeatalogs that has been mase to. potential customers Iv sec masa or tier digi clatter [Review Digital Cation Table above showed us the implementation plan of Toko Jaya Raya for Quarter 4 which started from 1 October until 31 December 2023. All the action plans have been scheduled properly with different colors and need to be monitored every week. From every business solution that ean be offered, there are many action plans that can be carried out to achieve the KPI of the solution. 48CHAPTER V Conclusion and Recommendation ‘As in the previous chapter, we already discussed the analysis as a result of a survey conducted by the author, proposed business solution for Toko Jaya Raya and the implementation plan of the proposed business solution for Toko Jaya Raya Now this chapter V will conclude the overall conclusion from the results of the analysis and interpretation which will answer the research question in chapter 1. This chapter will also include recommendations which summarize the recommendations for related stakeholders as listed in the proposed implementations and the future research suggestion to close this chapter. ‘V.1 Conclusion ‘This subchapter concludes the conclusion of the whole research starting from chapter 1 which mainly discusses the business background and issues until the research result to be analyzed in chapter 4. The writer will discuss how the research questions and objectives in chapter 1 have been answered and fulfilled. The conclusion will be discussed as below 1. Phygital, Digital Promotions and Digital Catalog are considered to be the most effective channels for Toko Jaya Raya to influence the customer purchase decision and Digital Catalog will be the best choice to attract customer awareness.. Phygital which stands for both physical and digital at the same time are the methods that is currently being used by many UMKM businesses and looking at Toko Jaya Raya condition, which only has physical channels, adding digital channels is the right step to be able to compete in this digital era. Digital promotions which are generally used by many businesses from various fields, and seeing that Toko Jaya Raya has never taken advantage of this, this is a good opportunity to start upgrading promotional channels to be more modern. Digital catalog as a channel which can introduce products sold to potential customers through an attractive catalog display. According to the research survey analysis done by the author, they are considered to be effective because the regression analysis result showed that they are affecting customer awareness and customer purchase decisions. The author hoped that by implementing the implementation plan provided, later increasing customer awareness and purchase decisions as a result can increase significant profits for Toko Jaya Raya to overcome the post-pandemic situation 47w The channel proposed for Toko Jaya Raya can work well by applying the business solution and implementation plan proposed for Toko Jaya Raya. The business solutions and implementation were made by using the analysis as a foundation. By considering Toko Jaya Raya current conditions which is the lack of business channels, the author created 4 business solutions to be offered for the stakeholders to Toko Jaya Raya which are advertise with digital catalog through digital platforms, sign up for every digital platforms marketplace, optimization of digital promotions by using social media, and create an attractive, informative, and neat digital catalog. ‘The most effective combination of the proposed channels is in the first business solution which is by advertising with digital catalog through digital platform. Digital platforms are a very broad and unlimited field which can be used to carry out effective advertising as advertising is one of the factors in the promotion mix. This business solution utilizes more than 1 channel as a solution by utilizing digital platforms, digital promotions, social media, and digital catalogs simultaneously. By utilizing every possible channel, it is hoped that the results obtained will be maximized. V.2 Recommendation As in the previous chapter, the author already proposed the implementation integrated from the business solution. The implementation plan contains action plans which are described as a recommendation for the business stakeholders of Toko Jaya Raya. After what the author has gone through in completing this research, there are several suggestions that can be recommended to future researchers such as: 1. Try to research more other channels which might be very useful for the business . Consider making more detailed implementation plan steps so that they can be better understood by business stakeholders. . Adding more respondent targets to get more accurate data. Consider making a qualitative research survey to get a better understanding of what the potential customer really wants, 48