Following the success of their 4th annual Bank Benchmarking Study, Ethos Consultancy, leaders and innovators in customer service measurement and improvement solutions across the Middle East, have conducted their first Retail Benchmarking Study.
Covering 22 retail sectors across the UAE, this study is the most comprehensive of its kind. An impressive 2284 mystery shopping visits took place covering 115 brands and 558 outlets between end April and the start of May 2009 – the purpose – to evaluate the UAE’s retail sectors service quality and sales performance.
Whilst visiting the 558 retail outlets scattered across 37 retail shopping locations including shopping plaza’s, shopping centers, walks and 10 major shopping malls, each mystery shopper was paying close attention to 5 key criteria. The outlets premises, greeting and appearance received from the sales staff, the overall sales and service approach demonstrated by the sales staff, the farewell received and finally the overall experience.
The UAE has invested heavily in retail infrastructure. A recent CBRE survey revealed 46% of the world’s top 280 retailers have a presence in Dubai, next only to London, Paris and New York City. This is a fantastic achievement for Dubai’s retail sector, but purchasing a franchise or brand outlet and fitting it out with top class interiors does not guarantee footfall or encourage loyal, repeat customers. Recruiting the right staff and providing them with quality product, service and sales training is an absolute must.
Lack of selling ability across all 22 sectors was identified as a clear trend with the exception of the automotive, restaurant and jewellery sectors which all performed well at both up-selling and cross- selling as well as product knowledge. Automotive was the biggest surprise in this category as Ethos conducted an automotive benchmarking study just over 2 years ago which told a totally different story – sales staff at car dealerships two years ago were well below standard. In comparison the 2009 results demonstrate sales staff in car dealerships are now much more aware of the products they are selling, have sound ability to interact and engage with customers and hence are much better attempting to up and cross sell their products. Our explanation for this is simple – cars are no longer selling themselves and customers need to be convinced to spend their money on expensive purchases such as automobiles. Dealerships must be investing more money and effort into the training of their staff which is refreshing and a step in the right direction.
Of the 115 brands involved in the study, Pure Gold Jewellers were identified as the best overall performing brand. This ties in well, given jewellery scored top points and was recognised as the top performing sector. Jewellery, watches, café’s, restaurants and electronics seem to be more advanced in training their staff and as a result are delivering acceptable customer service standards. All 5 of these sectors scored over 80% when evaluated against the 5 key service and sales criteria, however there is still room for improvement as many inconsistencies were revealed between brands within each sector and even outlets of the same brand. Our findings identified inconsistency as one of the key shortfalls that needs to be given much thought by retailers across all 22 sectors involved. There is a need for brands to identify where they are delivering best practice and at which outlets so as they can mirror these attributes consistently amongst all of their stores. L’Occitane at Dubai Mall performed exceptionally well and managed to rank as overall best outlet amongst the 558 visited thought out the study. If all L’Occitane stores across the UAE had of performed as well as their leading store at Dubai Mall, the L’Occitane brand may have placed higher than 7th over all.
Results were not so pleasing for the bottom 5 performing sectors – ladies fashion, department stores, general fashion, baby fashion and fashion accessories, with all five sectors scoring the lowest, between 62% and 67%. Sales staff within these 5 sectors displayed detrimental characteristics such as poor product knowledge, very infrequent attempts to engage with their customers to determine their customer’s needs as well as poor efforts to up-sell and cross-sell. The Dubai boom is over – retailers should be making the most of every customer that walks through the door.
Robert Keay, Managing Director of Ethos Consultancy comments, “The retail sector needs to recognise the urgency and need to improve customer service and sales competence especially during the current economic conditions where consumers are less inclined to part with their money. The UAE retail sector is extremely competitive as consumers now have a large number of choices. If the sales staff within a store cannot interact with their customers and encourage the choice to purchase, the sale is more often than not lost to a competitor.
We embarked upon this Retail Benchmarking Study to provide insight and also to help the UAE retail industry understand the current retail situation. Most importantly we would like the retail sector to understand the importance and incredibly strong link between consistent customer service excellence and the ability to meet or even exceed sales targets. In fact, we are so passionate about this we have developed an online ‘Lost Sales Calculator’ based on the results of this study. Anyone can now use the Lost Sales Calculator to find out how much they are potentially loosing due to poor customer service and sales performance.”
This comprehensive study has provided Ethos Consultancy with the ability to clearly demonstrate that most sectors in retail are increasingly losing revenue due to a lack of attention given when recruiting the right staff for their organisation and outlets. Inconsistencies in training policies across all brands are also evident alongside a clear inability to learn from other retail sectors or outlets of the same brand which demonstrate best practice. In addition, organisations tend not to see the importance or the impact of not measuring services on a regular basis. The study has given Ethos valuable insight into what’s currently missing and hence what changes need to take place within the UAE retail industry. We have created a comprehensive benchmark for retail brands, outlets and franchise owners to learn from, but more importantly identify shortfalls and implement corrective measures based on best practice. This retail study will be carried out on a yearly basis with plans to add global retail benchmarking to next year’s study – we plan to help our clients learn from the best and who better to learn from than the best in the world.
“Our Bank Benchmark Study has become a valuable and significant annual report for many successful banks in the region and we believe this Retail Study will prove just as valuable and insightful for retailers across the UAE. Retailers in the UAE and across the Middle East can look forward to new retail benchmarking results every year.” said Robert Keay, Managing Director, Ethos Consultancy.
This Retail Benchmarking report is expected to become the retailers’ manual to customer service and sales, providing valuable resources and advice for organisations looking to enhance, develop and maintain consistent exceptional customer service experiences for their customers.
Known for their innovative methods and online customer service reporting solutions, Ethos Consultancy recently marked their 5th anniversary in the Middle East and was awarded as winners of most innovative small business at The Lloyds TSB Small Business Awards held in December 2008.