Monthly Archives: November 2010

Ethos Managing Director, Robert Keay, panels key Retail discussion in the UAE

The Retail discussion that was shaped by the Dubai School of Government and Armada Distribution Company involved many of the movers and shakers in the Retail Sector. The event focused on the short-and medium-term retail environment in the country.

Kicking off with the Head of Retail MENA, Jones Long LaSalle, David Macadam stated that UAE’s retail supply is set to grow by approximately six million square feet of Gross Leasable Area (GLA) by 2013, and demand for retail space making a healthy comeback at three to five per cent annual increase, the focus is once again on this industry to become a key growth sector in the region.

During the panel discussion Robert Keay addressed the importance of customer service in the retail sector and how it is an important economic measure. Footfall was the theme for the day and Robert Keay continued to give scenarios on how various elements are measured by the retail sectors such as traffic, sales performance and conversions. “But no one seems to be measuring the lack of conversion, why customers don’t purchase. They don’t measure employee performance, the way they should.” The retail environment is changing and with that there is a change in the experience that the customers go through in the purchasing process, added the Managing Director of Ethos Consultancy. “There is a level of inconsistency in retail. You cannot guarantee a particular level of performance when you go shopping, except for a few brands.”

The topic of discussion then shifted on how it is the job of the retailer to make the sale. The people (employees) that make the sale are the people that serve the customers, and this is the key area of performance. Robert Keay continued to lay stress on the importance of having the right person with the right experience in the right position. People with experience in the wrong field are being placed in the wrong environment. As such there is an imbalance of what the brand is trying to achieve in terms of how it’s trying to serve the customers.

“Understanding not only what your customers want but also understanding what your employees want. It has nothing to do with culture or nationality, it has everything to do with management and language and making sure everyone is speaking the same language”.

The panel discussion also featured Shahram Shamsaee, Senior Vice-President – Shopping Malls, MAF Group, who spoke about issues related to customer service, Elio Pacheco, Director General, Evian Volvic Exports, who spoke on visual merchandising, and Susan Crotty, Assistant Professor at the Dubai School of Government, who explored the academic research on multicultural management and teamwork. Ruchdi Abou Haka, Regional Vice-President – Food and Beverage, Azadea Group, offered insights into consumer behavior.

Retail Benchmarking Study Report Released

Despite the plethora of women’s fashion outlets across the Emirates, sales assistants are still not keeping their customer’s happy, according to the latest results from Ethos Consultancy’s Annual Retail Benchmarking Study. The study investigated customer satisfactions rates across eight sectors and for the second year running ladies fashion sector scored the lowest, with jewellery outlets remaining on top.

Throughout the study carried out during end October and mid November 2010, we measured 8 retail sectors with a total of 400 physical location visits to a total of 164 retail outlets covering 40 brand names. A total of 41 retail shopping locations were included in the study which covered 10 major malls throughout Abu Dhabi, Dubai and Sharjah.

The 80 mystery shoppers conducted the benchmarking survey based upon assessing performance using 40 questions under the following categories of the customer experience:

  • Premises
  • Greeting and Farewell
  • Sales Assistant customer service performance
  • Product Knowledge
  • Sales skills
  • Fitting room (where appropriate)
  • Overall assessment

“The last few years have been difficult for retail outlets as disposable income levels decreased, fewer residents and tourists, however suggestions are that the UAE is on the cusp of recovery and stores need to ensure they’re prepared for the increase in spending activity,” commented Robert Keay, CEO, Ethos Consultancy. “The link between customer satisfaction and increased spending is well documented, however measuring, analysing and improving customer experiences is still not a must have for many brands in the region.”

For many customers the journey into a retail store can be a great experience or can be an awful experience, that’s the major dilemma today in the UAE, inconsistency!

Clearly some stores are really good at employing the right people, giving them the right training then measuring their performance on a regular basis, and it shows! Particularly in the Jewellery and Cosmetics sectors, where customers can be pretty much assured of a great retail experience throughout the UAE.

“The downside though, even today, some stores do not greet customers, neither (and more importantly) do they qualify their customers’ needs. This surprises us the most, particularly as qualifying customer needs is the foundation of how a retailer can become successful, yet it’s rarely done outside of jewellery and cosmetics” stated Keay In the Ladies fashion sector it’s quite normal for shoppers to enter a store, browse, try things on in the changing room then leave without a single sales assistant qualifying their needs. This suggests one of two things, 1. The retailers are happy with the money they are making or 2. The retailers have not recruited, trained nor measure the performance of their own staff.

“Product knowledge of staff is another concern identified with the benchmarking research, particularly the inconsistency of product knowledge within stores themselves. Much still needs to be done by retailers to ensure all of their staff are familiar with what they are selling” stated Keay.

Significant lost revenue and lost customers is occurring every single day as a direct result of not only poor customer service and lack of qualification but also for the stores inabilities to cross sell when they do have a customer wishing to make a purchase. Cross selling remains at less than 50%, of shoppers being cross sold to. This has been a consistent fact throughout the years we have been measuring retailers in the UAE and something that is costing stores substantial revenues.

Additionally, 1 in 5 of the shoppers was not thanked upon leaving the stores.

Our benchmarking also highlighted there are no real differences between the 3 Emirates when it comes down to the retail experience.

Overall customer satisfaction levels are not much different from our 2009 benchmarking survey with some retailers still with much to do in terms of customer service and selling.

Keay continued: “There are some sectors and brands that buck the trend, such as jewellery and specifically Pure Gold, however customer service is still not high enough on the corporate agenda in many sectors and brands. The UAE offers some of the best retail brands and outlets in the GCC, however competition is increasing and without focusing on providing the best service as well as the best products money will be spent in other countries.”

Electronics as a sector came in second with the top brand being Sharaf DG and within Cosmetics and Perfume sector Faces was the best performing brand.

Download the Retail Benchmarking Study 2010 report.