The Value of Mystery Shopping: From Luxury to FMCG and Beyond
In 2014, the UAE’s luxury goods market was estimated to be worth USD 8.98 billion, fueled by spending from residents as well as tourists. Despite the sector having seen considerable growth over the years, ongoing economic and political concerns across the region are making luxury a harder sell than before.
As most companies operating in the retail industry know, it is easier (not to mention cheaper) to retain customers, rather than look into acquiring new ones. In fact, it is estimated to cost six to seven times more to attract new customers than it does to retain current customers. With the widespread use of social media in this digital age, negative feedback now has the possibility to spread at an exponential rate. One person’s negative experience with a brand is therefore likely to multiply and have a stronger knock-on effect than in the past.
In an effort to avoid such situations, it is imperative to take measures to ensure customers are satisfied with the level of service provided. Mystery shopping can serve as a valuable tool for brands that are looking to assess the delivery and standardization of their services and processes, to help inform future staff training and to potentially identify room for improvement in the future.
Regardless of the industry, mystery shopping requires a high level of discretion. However, the complexity of ensuring a credible mystery visit in premium categories such as luxury retail is considerably higher. For instance, in the case of a luxury fashion brand, this would entail utilizing the services of a shopper that either has the purchasing power to actually buy from the brand or may even be an active customer of the brand. Despite the high levels of purchasing power in the GCC, securing shoppers that fit such premium profiles is something many companies struggle to effectively do.
The multicultural makeup of the GCC adds an additional layer of intricacy to conducting mystery shopping programs in places like Dubai or Abu Dhabi. Shoppers must accurately reflect the demographic makeup of the country along with tourists. This will likely involve translating checklists or field notes into other languages, such as Arabic, Russian, etc.
Beyond luxury, mystery shopping can be carried out across a range of industries, from F&B and hospitality to government services to automotive to banking, etc. Whilst a one-time visit may reveal useful information, it is typically recommended to conduct such studies on a longitudinal basis. Depending on the nature of the industry, this could be anything from twice a month to twice a year. The importance lies in having the ability to monitor changes over a given period of time.
It is encouraging to see that in recent years, a growing number of companies across different industries are increasingly finding value in conducting mystery shopping programs in the UAE at regular intervals. However, many companies often fall into the trap of leaving their measurement systems unchanged for several years. As markets evolve and customer expectations change, it is important that these measurement systems are updated accordingly in order to provide clients with highly actionable insights that can be gained from mystery shopping.