Impact of Mystery Shopping: Organisational Performance
How mystery shopping work in the retail sector in Australia
Mystery shopping is considered as a critical tool that help in measuring the service standards so that novel and better service standards can be framed. According to Chen and Barrows (2015) mystery shopping is a concept that can be used by any industry for measuring the standards of services and taking measure to improve them at their lacking points. They mentioned that the mystery shopping can be used by any industry which can be medical, retail, hospitality, and many more. The mystery shopping concept was first time introduced in the US in 1940s and till date it has achieved a great scale i.e. $1.5 billion and this number is still increasing. In this method the aim of the public or private sector service providers is to understand the satisfaction level of the customer and designing new strategies depending on that. The quality measures majorly considered for evaluating the performance and its impact include several quality measures like skills of the employees, customer satisfaction data, etc. and these were computed with the help of the experiences of the mystery shoppers. The literature review focuses to answer following questions.
Explain the concept of mystery shopping?
What are the impacts of mystery shopping on organizational performance?
What are impacts of mystery shopping in retail sector in Australia?
2. Literature review
Literature review process
Allison and Severt (2012) in their study also mentioned the concept of mystery shopping in their study. They stated that the mystery shopping has been adopted as a standard method for measuring the performance of the industry. According to the report presented by Jersey Financial Services Commission (2011) mystery shopping or mystery customer research is process of implementing trained and experienced personnel for measuring the customer service process. In this the personnel will act as a customer and revert back with their views and experiences in a detailed manner.
Singh and Verma (2014) in their study defined the concept of mystery shopping and its implementation as a measurement tool. They defined that the mystery shopping was initially started as a process in which the trained “secrete shoppers” were used to evaluate the business operations. They said that the mystery shopping can be implemented in any industry which will result in developing new strategies, business designs and shopping programs. According to them mystery shopping has certain objectives like to map touch points that will generate experience, attaching some value to these map points and resulting in valued customer experience. In this method the information can be recorded in any way either quantitative or qualitative. It follows a defined process everywhere and information will be recorded in secure manner.
The mystery shopping was considered efficient for different companies which may include restaurants, hotels, resorts, banks and financial service providers, healthcare organizations, convenience store, chain retailers, self-storage facilities, etc. (Singh and Verma, 2014). Among these the retail sector is the most effectively impacted by the mystery shopping.
Mystery shopping is recommended for implementation in any kind of industry and especially in the retail sector industry. Several researches proved that the mystery shopping has improved the status of retail shopping. Low (2011) in his study presented a case study of mystery shopping in Singapore’s retail sector. Study reported that the mystery shopping has attained popular implementation in 1940s. He reported that the implementation of mystery shopping in retail industry has proved effective. As it results in the development of new shopping programs based on the customer experience. The Singapore Retailers Association (SRA) introduced mystery shopping in their retail sector.
Douglas et al (2008) mentioned that the mystery shopping has an impact over the performance of the employees in the retail sector. According to the data presented by them there is a great impact of the mystery shopping on the performance of the employees in the sector.
The retail sector includes all the supermarket, telecommunication service providers, and different sellers. In a study performed by Sterbova et al (2015) the quality selling of service providers has improved a lot. They mentioned that the personal selling is of higher efficiency because of the direct interaction between seller and customers. Any kind of selling can be improved by proper communication and it will also help in building long run relationship. The study was based on the telecommunication service providers. The study resulted that the mystery shopping was divided into several analysis segments like in the first phase sales skills of the sellers was evaluated. It was noted that the number of customers improved during this phase. The skills and working efficiency shown great improvement after the phase of pressure working.
Mystery shopping is defined by Render (2014) and revealed that the mystery shopping is effectively implemented by the retailers and service providers with the aim of measuring service processes. Mystery shopping is evaluated using the qualitative research. He explored that the concept can be implemented in either of the industry like retail or service and the aim of implementing this was to improve the customer services. Retail sector is analyzed by several factors like environment of the store, communication and sales skills of the employees, design of the product and services, and also the hospitality factor of the industry. He concluded that the mystery shopping is a reliable tool for improving the service quality which lack academic attention. It was found that the mystery shopping has application all over the world.
Jacob et al (2018) in their study mentioned the implementation of the mystery shopper technique. According to their research the mystery shopper technique is widely implemented in the public sector. The reason for the implementation of the method was to attain accountability, introduce novel techniques and monitoring the performance of the employees. The study considered the 34 previous papers and conducted a bibliometric analysis. At the end of the study the researchers reported that mystery shopping has been widely implemented in both the type of sectors viz. public and private. The aim of private sector is to enhance the performance in the organization. They faced challenge during their research especially in understanding the citizen and the government in case of public sector and customer and service provider in case of retail private sector.
Lowndes-Avery (2001) in his research mentioned that the mystery shopping process is highly reliable and valid. In his research he conducted two analyses in which he assessed the correlation between the service quality score which are resultant of mystery shopping and concurrent sales. He also analyzed the relationship between the service quality score and subsequent sales. The correlation was presented by the research in efficient way.
Jacob et al (2018) in his research analyzed the role of the mystery shopper in measuring the public service delivery. The mystery shopper technique is of great implementation of in the public sector. The aim of implementing the mystery shopper is to improve the service quality and user-customer satisfaction. It also aimed at increasing the accountability and performance monitoring exercises.
Dahlgaard-Park (2018) in his study reported that the mystery shopping is qualitative and observational method which target in measuring the customer service, service operations, merchandising and service quality and also employee integrity. The mystery shopping was to understand the base for the employees in the organization and the role played by the ordinary customer. He mentioned the steps involved in the mystery shopping which are defining the aim, select and training the mystery shopper, informing the employee about the shopping, preparing the employees about the shopping scenario, preparing the report and informing the employees about the company status and its competitors.
FSA presented a Mystery Shopping Guide (2006) in which retail financial services in concern with the mystery shopping. The Market Research Society (MRS) define the mystery shopping as the use of trained individuals for understanding the service processes and customer satisfactions. It mentioned that the process can be implemented in any industry of any sector like retail and motor trade and aimed at improving the quality of service providers.
A study was presented by Low (2011) in which he studied the mystery shopping in Singapore’s Retail Sector. The study was focused on preparing the professional papers in order to develop the case study by considering the retail companies in Singapore. The statement of objective for the research was to identify the key service interventions for the two prominent retailers in Singapore. The study also aimed to establish a relationship between mystery shopping and retail sales of the two companies.
The study reported that there are several measures in any organization that can be implemented for analyzing the service quality. The objective of the study was to improve the quality of the services, assessing the performance of the employees in the retail organizations and estimating the standards of the competitors. The study made efforts in improving the staff conditions and providing training to the employees.
He mentioned that there are two main measures like satisfaction surveys and mystery shopping scores. These were used to monitor the customers’ experience in the retail sectors. Other than retail outlets healthcare, financial and airline sectors were also improved by the implementation of mystery shopping. The other factors under consideration were customer satisfaction and improvement of business performance. According to the research in Singapore, the retailers participating in the customer centric initiatives has resulted in the measuring the different services. Customer satisfaction, customer complaints analysis and mystery shopping for evaluating the performance.
He also mentioned that the mystery shopping is effective only if it is performed in a defined way. In Singapore, government launchedthe-Extra-Mile-for-Service (GEMS) movement for the purpose of improving the service standards and achieve the service culture in Singapore. The major aim was to take initiative for the retail sector. The study considered several retail outlets and taken their experiences for improving the service standards and customer satisfaction.
There are several mystery service providers in UK, US and Europe but not in Singapore. The service was conducted by consulting agencies. Even if there is no specific association for mystery shopping in Singapore, the concept is highly considered adopted by the retailers. Since the retail services are the foundation for the other related sectors thus its considered of great importance.
The study concluded that the mystery shopping has a significant role in defining the service quality of the company as per the experience of the customers. The study found that there is a positive relationship between the shopping results and the performance of the sales team in the retail company. The mystery shopping is an effective tool in improving the quality of the services depending on the responses from the customers.
The current study focus on the retail sector of Australia and how this can be improved by the mystery shopping. The retail market has attained the growth and has impacted by a number of factors like technical advancement, and innovations. Thus to improve the retail sector, mystery shopper need to understand the technical advancement occurring in the market in few past months and what are the prospects for upcoming year. The study will focus on retail outlets in Australia and collect data about the standards and need for improving the state of them. The mystery shoppers will collect information about the conditions in the market, how these are affecting the market. The retail sector plays a great role in defining the market as it forms the base for customer retailer relationship. The mystery shopper by implementing qualitative as well as quantitative evaluation evaluate the responses and define results. Depending on these results company will decide how to improve the customer satisfaction and what are the requirements that can be made in order to improve the company standards.
The work ethics and the role of skill improvement programs will also be considered for estimating the improvement level. The analysis must also include the factors like working environment, sales team skills, customer dealing efficiency, work ethics, understanding the role of employees in the development of company etc. Company needs to focus on improving the skills and strategies of the organization.
The study will help the companies in understanding their current status in the market. They can then implement new strategies for improving the company status, and enhancing the work standards of the employees in the organization.