How companies can innovate from within

A study of 158 Bossini shops in six cities finds ‘novel’ service encounters replacing uniform customer service approach

PUBLISHED : Friday, 22 January, 2016, 10:00am
UPDATED : Friday, 22 January, 2016, 10:00am

Almost everyone can tell the difference between a scripted and a natural approach from a shop assistant. Some jump on the customer with catchphrases that reinforce brand messages or offer a set list of options.

From a customer’s point of view, there’s nothing better than a spontaneous, helpful and cheerful approach, without too much pressure. In these situations, you can feel the shop assistant is not so much selling you something as delivering a much-needed solution.

A customer’s first contact with a company crucially affects how the customer thinks about the product, the brand, and the company. The service encounter between a customer and a frontline employee has been referred to as “the moment of truth” in academic research. It is critical to a service company because service, different from a manufactured product, is produced and consumed on the spot.

The trend in retailing industries has been for the service encounter to be micro-managed from start to finish; standardised so that when we enter a shop of a global chain, we can expect to receive the same branded greeting anywhere in the world.

Managed on the mass production principles of predictability, calculability and efficiency, it represents what we call “McDonaldisation” of society. Interestingly, in the past year or so, even the standard product formula of fast food giants such as McDonald’s is changing to allow for individual tastes.

Frontline employees often deliver a consistent brand message but there’s a risk of a backlash. Research has shown that customers can distinguish between scripted and impromptu service at a hotel check-in desk, and customers don’t like scripted service. Other research has shown the effectiveness of an adaptable approach, e.g. a decision by a 7-Eleven part-time worker in Japan to change the lunch offering to cool noodles when the weather suddenly turned warm.

When frontline employees are allowed more autonomy, can they provide a “novel” service encounter to customers? Does this result in innovations that can be flexibly adopted across shops in the company?

READ MORE: Does standardised service fit all?

Several years ago, John Lai from the Chinese University of Hong Kong, Alice Hon from Hong Kong Polytechnic University and I spoke with Hong Kong-based international fashion retailer Bossini about doing research into service innovation.

Bossini has around 1,000 stores worldwide and about 260 directly managed stores in Hong Kong, mainland China, Taiwan and Singapore, so it was an excellent field laboratory to look at how the service encounter works.

The company had just been through a major brand revamp, and invested heavily in employee training. It allowed its employees to work outside the box of rigid, standardised customer service and each outlet had its own customer strategy.

Our study was based on fieldwork at 158 shops in six cities – Hong Kong, Macau, Shanghai, Beijing, Shenzhen and Guangzhou. We looked at what novel, creative service the employees offered and whether these acts were delivering innovation.

We divided the interaction into seven stages: entering the shop; viewing the merchandise; selecting merchandise; fitting; deciding whether or not to buy; paying; and leaving the shop.

We acted as typical shoppers, observing employees and customers for 30 minutes and recording our observations immediately afterwards.

On average, there were 2.19 acts of “novel behaviour” by employees in each shop, with the highest frequency in selection of merchandise. Examples of this included an employee briefing a customer on the latest trends and products, and one who gave “mix and match” advice based on the shopper’s dress style.

Other examples of novel behaviour included tailoring festive greetings to customers, helping customers with shopping bags upon entering the store, providing tips about nearby shopping mall promotions, educating customers on how to store, wash, and iron apparel properly, and providing sandals for customers for fitting comfort.

Staff in vibrant consumer markets such as Shenzhen and Guangzhou, and those in larger shops, were more likely to deviate from a standard customer service script.

For larger shops (with more staff), this may be because employees are less occupied with routine work and have more time to engage in new ideas to improve customer contact.

Shops in Shanghai and Beijing had the fewest novel acts (less than 2 during the 30 minute observation).

The novel service encounter requires frontline employees to identify problems in work tasks, gather new ideas and seek new approaches for solutions. The novel behaviours rarely involved radical changes, but were more likely to be smaller, incremental shifts in better customer service. When they improvise, frontline employees play a key role because they have first-hand information about customers.

The reality is that the employees may know customers better than those at the company headquarters. Employees need to be confident in themselves and know what the brand message is, but companies need to trust their employees to be flexible.

We are not advocating chaos, or a totally hands-off approach for frontline staff. But more task autonomy and empowerment for employees could help motivate them and come up with new ideas to serve customers better.

Too much control can hamper innovation and stop the company delivering the best service to the customer.

While Harrods in London can afford personal shopping for its high-end customers, retailing chains such as Bossini could tap into the minds of their frontline employees and offer their own personalised service.

Steven Lui is an assistant professor at the UNSW Business School’s school of management