How To Establish a Unique Customer Experience In-Store? Mystery Shopping in the Household Appliances Industry in China

Market Opportunity: High-end household appliances industry in China

The household appliances industry in China experienced large growth the past years.  It has grown into a multi-billion-dollar industry, and continuous growth is expected the following years. According to Statista,  retail sales of household appliances in China, together with consumer electronics, had amounted to about 67 billion yuan in April 2016 and counted in December 2016 already about 98 billion yuan.

The primary drivers of growth are the urbanization and the rising purchasing power through increasing per capita income which results in changing consumption habits. Demand for high-quality products is, therefore, increasing. Also the replacement of existing products plays a role in the rise of the request. Other market trends are, for instance, the consumers’ interest in environment protection and energy efficiency but also in smart technologies, such as the ability to control the appliances remotely by smartphone.

According to Christina Ding, project manager at Daxue Consulting, an excellent in-store service, which is often the first touch point with the brand, thus a good customer experience is crucial to gain a competitve advantage, especially in the household appliances industry in China. It is particularly relevant in the high-end market as clients want to see and try the product at the POS – sometimes several times – before purchasing it.

Research has shown, that compared to many online purchases of low-end products, the majority of Chinese prefer to buy high-end products in-store: 82 percent of the urban population believe, the most significant problem with online shopping is the quality of the goods. Thus they rather opt for trying it in-store instead of buying it online.

Case Description: high-end household appliances industry in China

Daxue’s client, a European-based manufacturer, and supplier of high-end domestic appliances and equipment, already operating in the Chinese market, sought to improve their overall quality of the in-store experience andcustomers’ journey. Therefore, the company approached Daxue Consulting to carry out a comprehensive Mystery Shopping project to gain undercover information about its stores (brand presentation, pricing), their service (staff skills) and the environment (visual) to be able to enhance their retail operations.

Phases of the Market Research: Mystery Shopping in China

Daxue Consulting designed a tailor-made project for our client to determine strengths and weaknesses in the different business operations. Our research team, therefore, conducted 91 mystery visits to 54 POS in 16 different Chinese cities, as well assix audits of online distribution channels and customer service lines. Daxue executed the mystery visits in two ‘waves’ to highlight changes and improvement, each of them comprising the following steps:

Phase 1: Project Design, Recruitment & Training

As a first step, Daxue Consulting set up the project design, including the decision on timing, locations, different channels, as well as creating an appropriate training guide. Moreover, our research team recruited suitable, high-profile and experienced participants for the mystery visits and set up the parameters for the Store Checker App. Daxue Consulting uniquely designed this app for large-scale store checks and mystery shopping projects. It allows for efficient, affordable and reliable data collection. Thanks to geo-localization, audio as well as visual records, and its vast network of users across China, the app makes our research team able to assess a product or a store in any given city or province very fast. Every project is uniquely adapted to our clients’ needs. After preparation and briefing, our consultant team runs a pilot test followed by another debriefing.

Phase 2: Mystery shopping

Depending on the audited channel (physical store vs. e-commerce and customer service line), Daxue’s consultants decided on measuring a few or all of the following aspects with the help of the Store Checker App:

• Price policy (such as discounts, recommendations, response time…)
• Selling skill focused on key selling capacities (such as the welcome approach, personal grooming, product knowledge, attitude and behavior, item selection and ability to convince, communication and interaction with the customer, identifying customers’ needs…)
• Store environment (such as cleanness, brand signage, atmosphere, product display, shop surroundings…)

Our research team also assessed the overall performance in China and created a map to communicate the findings of the client’s POS visually. Also, Daxue Consulting executed a comprehensive benchmarking by the type of store (e.g. flagship store vs. boutique) as well as by city. Moreover, our team created a list including a ranking of how well each POS and each salesperson perform considering the different aspects of research.

After the first wave of mystery visits, Daxue’s consultants provided the client with information about critical issues and recommendations of how to enhance the brand presentation as well as the skills of the sales staff, such as for instance, a list of criteria the sales persons need to follow. Daxue Consulting then carried out the second wave of mystery visits when our client had already implemented suggested changes.

Phase 3: Data Analysis & Final Report

The last step comprised data processing and analysis, including the comparison of the results of the first and the second wave of mystery visits. Daxue Consulting, therefore, could assess the progress and the success of implemented changes and registered an increase in all aspects of the operation. Our research team additionally created an outline ofwhich elements still need adjustments and recommendations of how to improve them to help the client reaching the overall in-store quality and creating an even more attractive customer journey.

To know more about Mystery Shopping or the household appliances industry in China and its trends, please don’t hesitate to contact us.

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