Is Your Store Format Ready for International Expansion? Part II

Customer Service levels and consumer expectations differ from country to country. This post (Part II of this series) shows how those differences affect your staffing and how you select, train, motivate and pay your store staff when expanding into new markets.

In Part I I talked about the specifics to consider when taking a proven retail format international with regards to store location, adjacencies, assortment, product mix, store size, dimensions, layout and store look and feel.

Customer Service Expectations

It is of utmost importance to know and understand consumer’s expectations about customer service in a new market:
Consumers experiencing competent and truly helpful guidance from friendly store staff spend on average 50 % more than consumers who shop without any interaction with sales associates. Delivering this service is what almost all retailers in Western Europe strive for (except true self-service formats).

Customer service pays off (Graphic: Heike Blank)

Customer service pays off (Graphic: Heike Blank)

Building Customer Relationships

Building a relationship with customers means something entirely different in Western Europe than, for example, in the Middle East. Competent, knowledgeable helpful staff on a level playing field with the customer is what every European retailer is looking for. Staff that:

  • has the empathy to realize when a consumer wants/needs help and expects customer service, and when they want to be left alone,
  • smartly offers real alternatives and/or complementing items without being pushy or servile,
  • is able to build a relationship with consumers beyond the pure buying experience.

This is how you train (or try to train) your staff in Western Europe.

Customer Service with Pink Taxis in Dubai (Photo: thatdubaisite.ae)

Pink Taxis in Dubai (Photo: thatdubaisite.ae)

In the Emirates, however, this kind of relationship building between consumers and sales associates will never be a successful service model – at least when it comes to serving domestic customers. Here, having attentive and obedient staff is key to increasing average ticket and unit per transaction. Sales associates in the Emirates are often regarded as people with lower social status. Therefore, you rarely find domestic sales staff serving domestic consumers. In the Emirates, sales staff typically originates from India, Pakistan or from poorer Arab countries. Sales associates are expected to endure even snobbish, arrogant behaviors of consumers without losing motivation, their good mood and customer service attitude.

If you are in the premium market, prepare for a personal-shopper style service.  Making appointments, same-day delivery service of shopping bags, offering refreshments, arranging other service appointments like a manicure or pedicure, a Pink Taxi, Limo- or VIP-shuttle service with female drivers etc. is the name of the game if you want to excel at customer service in the Emirates. You essentially need a well-trained and attentive concierge service available at all times in your stores.

The Perfect Japanese Customer Service Bow (Photo:_Shutterstock)

The perfect Japanese service bow (Photo: Shutterstock)

Talking about another extreme in terms of customer service – Japan! A lot has been written and said about the dedicated service culture in Japan – the “omotenashi spirit”. Servicing and caring for others is a job with high reputation and is well respected in Japan. Dedication to service and truly satisfying consumers’ needs is what sales associates in Japan strive for. Excellent customer service is a matter of professional pride. Thus, if excellent customer service is one of your USP’s in your home market – do not rely on the generally excellent service culture in Japan. You need to think about going the extra mile! You need to make a difference, and to distinguish your service level from the already high service level of the competition.

Turkish vintage store customer service (Photo: Radiokafka Shutterstock)

Turkish vintage store (Photo: Radiokafka Shutterstock)

In Turkey, on the other hand, you will often feel that once you enter a store, sales associates almost jump on you in order to make you buy. They follow your every step in the store to make sure to be right there should you require assistance. While unnerving, not only to foreign customers, this is vital to sales associates. Typically, they have a very small base salary and only earn money if they get you to buy something. This does not make it more pleasant to shop in this kind of store, but helps to better understand and tolerate it.

All those differences and specifics will have an effect on how to select, train, educate, motivate, pay and manage your sales staff in a new market.

Store Staff

Considering different opening hours and different salaries belongs to the basics when planning your staffing for a new market!

Staff Planning

For calculation and planning purposes a lot of companies use the “manning factor”. It expresses the average number of FTE on the sales floor at any point in time. Others use an “FTE per x sqm” – KPI. And some use “Sales per staff hours” in order to plan and calculate staffing.

I have not yet met many companies that really take footfall patterns into account when planning their staffing (number, hours, share of FTE/part time/temps, merchandise handling vs. sales staff etc.). Entering a new market without being aware of the footfall or turnover history, of course, makes it difficult to properly plan for peak times in footfall and shopping. Whichever method you use, your staffing does not only need to consider different opening hours, but different service levels, educational levels and conversion rates as well.

Shopping Mall in Gujarat (Photo: ingujarat.in)

Shopping Mall in Gujarat (Photo: ingujarat.in)

In countries where window shopping and mall visits are a popular way of spending leisure time (e.g. India), it is crucial to identify browsing consumers (who just want to window shop) from consumers who have the money to afford buying.

Staff Turnover

Staff turnover differs enormously between countries as well. Are you experiencing a 20% annual staff turnover in your home market? Plan 50 % for markets like the Middle East or India, and up to 60% in China. For Japan, on the other hand, 20% is already a huge number and staff loyalty is high if people feel appreciated and payment is competitive. Staff loyalty in the Middle East, in China as well as in other Far East countries is low. People go where the pay is best.

Staff Training and Education

This has a substantial effect on your training program, schedule, frequency and tools. And it will affect the salary and incentive system you offer in order to remain attractive for experienced, motivated and top-performing sales staff that is not easily lured into new jobs.

Plan to double or even triple your training efforts – not only due to higher staff turnover. Education levels in developing and emerging markets differ enormously as well. You need to consider this when planning your staff training.

Think about using mobile devices for sales staff and customers. It helps both to find information on products (e.g. information about fabrics, functionality, fit, fashion and color trends, styling tips and complementing items), product availability (in other stores or online), product alternatives and services (e.g. tracking pick-up availability for online orders, arrange home delivery services …)

Customer service pay day (Photo: Shutterstock)

Pay day (Photo: Shutterstock)

Salary and Incentives

Knowing what competitive salaries mean in a new market is a basic. Additionally, you should invest in attractive, performance-driven incentives. This not only gets you top staff that outperforms others but also helps reduce staff turnover.

For the majority of store staff in emerging markets, it is far too expensive to have lunch in the food court of the mall. Learn about their break, lunch and diet preferences. Think about granting a lunch/snack allowance or arrange special terms or discounts with a local food supplier. This will help your staff concentrate on their job rather than organize affordable lunch options. And it adds a low-cost incentive that might increase staff loyalty and decrease turnover.

Customer service motivation (Photo heathervalentinO)

Motivation (Photo: heathervalentinO)

Other Staff Motivation

Offering career opportunities is not only important in a new market. Fortunately, it is easier to execute in a market with expansion potential. Use this proactively to keep top staff motivated and staff turnover at a minimum.

Managing sales performance and educating staff about retail KPI’s is a challenge everywhere. In some markets, however, it just won’t work to explain to staff how retail dynamics work. Nor, even more importantly, how retail dynamics manifest in KPI’s such as Conversion Rate, Unit per Transaction, Average Ticket Value, Average Sales Price or Footfall Utilization Index.

This means that you need to translate and visualize your expectations. McDonalds Japan, for example, uses Anime videos in order to visualize what they expect from staff. The videos show in a funny way how they want their staff to react in a range of situations.

Experienced, top motivated and top performing staff are a crucial success factor in retail. Understanding what it takes to motivate staff to outperform the competition and to stay loyal to the company pays off. Not only, but especially in new markets!


About the Author:

Heike Blank has worked for big organisations such as VF Europe and s.Oliver but also for niche brands such as Ecko Unltd. and Zoo York in top executive positions. Opening and managing own retail, partner stores, concessions and shop-in-shops in 23 countries in Europe, the Middle East and Asia gave her a deep understanding of the importance of a brand specific balance between customising and standardising the business model when conquering a new market. Please feel free to email her for further discussion of these topics. Or for more about her see here.

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