According to Saunders (2000), there are two main sections when it comes to observation: Participant and Structured. The method employ used for the observation of Bottoms Up will be ‘participant’. This provides a qualitative analysis of the workplace and those who work within it.
By immersing oneself in such an environment, ‘this enables the researcher to share their experiences by not merely observing what is happening but also feeling it’ (Gill & Johnson, 1997 p.113).
For such a retailer as Bottoms Up, it becomes difficult to blend into the background and the purpose of visit to be kept undisclosed – this is due to the fact that suspicions arise of your presence. Therefore, using the ‘Observer as participant’ method, it became viable to ask questions directly, and act as a spectator. Making notes as events occurred meant that little was missed; this also provides more time to concentrate on discussion with participants.
When observing competition, it was discovered that concealing ones identity proved to be effective as a fast, comprehensive observation could now take place as the process had been repeated several times.
The SERVQUAL framework, integrated with the ‘total visual merchandising process’ (McGoldrick, 2002) provides the foundation of the observation used. Through these techniques a review of in-store communications and marketing can take place. The SERVQUAL framework can be valuable in detecting and diagnosing gaps between perceived performance and customer expectations.
All the elements used in the framework have been analysed to the appropriateness of the target market (McGoldrick, 2002).
- Threats to validity
There are obviously threats to the reliability of an observation process, and these must be stated. There are supporters and backers of SERVQUAL, and over the years there have been refinements to its use, and how it is implicated. However, ‘in spite of its critics, SERVQUAL has been very widely used, in original or modified form, since its inception’ (McGoldrick, 2002 p.531).
- Perhaps there is too much emphasis focused on customer dissatisfaction, therefore the observer misses the positive aspects of an observation, such as the store décor, customer service or the promotions on offer.
- The time scale that was spent within the retailer was minimal, so whatever perception is recorded is only a snapshot of the whole timescale.
- The greatest threat to reliability would be ‘observer bias’. It is argued that perhaps our own perceptions colour our interpretation of what we believe to be ‘true’ (Saunders, 2000).
- Why does the shop do it this way?
Through the observation methods employed and with the results gained, one can see the reasoning behind Bottoms Up’s in-store communications.
9.1 Customer Service:
Relationship marketing is beginning to play an ever increasing role in customer service. As Gummeson (1996, p 32) states, there has been ‘a shift away from goods and services to an emphasis on customer value’. It is the features of the offering or exchange that extend beyond the ‘core’ product or service that customers are looking for nowadays.
In special relation to the observation undertaken, Christopher et al (1991, p4) back up the notion that customer service levels are being determined by research-based measurement of customer needs and competitor performance and in recognition of the needs of different market segments.
Through the observations of Bottom’s Up, Customer service was of good quality, although staffing levels were low. Staff were well informed of the variety of wines on offer, and could advise wines according to the occasion it was being drunk for. There is a training scheme employed to educate staff, however staff in this store were either keen followers of wine or had years experience in wine sales. There is a ‘need for investment in proper customer-focused staff training to enhance different skills such as industry knowledge, customer service, communications, presentation and teamwork’ (Lindgreen & Crawford, 1999 p.235).
As a result of staff becoming more educated and knowledgeable their morale should increase. This becomes noticeable to customers in-store and should also increase productivity levels among employees.
The aim of quality customer service is not only to keep the customers in a positive frame of mind, but to make sure they return again and again. This is known as customer retention. The building of bonds to ensure long term relationships is essential if both parties are to gain a mutual advantage (Egan, 2001).
9.2 Store ambience:
Store ambience is the ‘experience’ or ‘feel’ that the retailer wishes to convey to the customer. The atmosphere and design of store are key elements to a retailer such as Bottoms Up.
The store itself is large and spacious, with ease of access to most products allowing the consumer to feel comfortable, and that they are not being rushed. The sales tills are placed directly opposite the entrance, which pleases the consumer as there is always staff present to help you with any enquiry.
Total silence is all too rare in retail settings, most have music playing in the background, usually chosen by the retailer’s assessment of what their target audience preference is. Bottom’s Up chose an up-to-date pop CD of the latest chart music, popular among students, especially females. The music was relatively loud, which can reinforce a stimulating, vibrant atmosphere that deliberately sets out to excite the customer (Brassington and Pettitt, 2000).
Lighting affects mood and perceptions of products and can help to highlight particular items or ranges or draw customer’s attention to more remote parts of the shop (Brassington and Pettitt, 2000). The lighting in-store was very bright, probably used so that consumers can easily read labels on wines and thereby making their choice easier. The brighter store lifts spirits of customers, which many would consider important for an alcohol retailer.
It was noted that the temperature within Bottom’s Up was high. During the winter, when consumers are wearing coats and jackets, they become hot and anxious in the store. As a result, the time customers spend in the store is decreased, meaning that all promotion activities and trouble spent getting them in the store are almost put to waste. The longer the consumer can remain in the store, the more likely they are to purchase a larger amount.
9.3 In-Store Communication:
The majority of communication with a customer takes place in-store. This is where the exchange takes place, and many factors can affect the decision making process.
Sales promotion has the ability to communicate with the customer in ways that advertising would find hard to emulate. Sales promotion, can for instance, actually place product samples into people’s hands so that they can judge for themselves the quality of the product. ‘Learning by one’s own experience is so much more powerful and convincing than taking the advertiser’s word for it’ (Brassington and Pettitt, 2000 p.650). Bottoms Up offer wine sample testing if a new promotion is being launched, and this is available to all customers – through this method, consumers can decide first hand (pre-purchase) whether the product is right for them.
Bottoms Up promotes a large amount in-store, and they employ several methods so that the customer becomes educated of their offers. Through the entrance on the store, directly on the right hand side as one enters the lagers and beers are stacked on the floor for immediate view. This selection of a wide variety, including Fosters, Stella, Carling and Carlsberg (the top selling canned and bottled beers) – is covered with promotional signs. These include ‘Buy one crate, get the second ½ price’, and ‘Reduced by £6, now only £12.99’. As observed, the majority of promotions are kept to beers and lagers: this may be done as stock levels are high (so wish to reduce costs), or they seek to lure consumers to what they perceive to be a good deal. Spirits in a retailer such as Bottoms Up, Wine Rack, Threshers and Unwins tend not to reduce costs of products such as spirits and liqueurs as they are more costly, so by cutting price levels, then revenue may be lost.
- Customer Satisfaction:
Through customer satisfaction, Bottoms Up seek customer retention, and keep a competitive advantage over their nearest competitors. McGoldrick (2000 p.523) argues that ‘while customer satisfaction may not alone be sufficient to ensure loyalty, it is usually the first step’.
Only through customer complaints and observation can problem areas be detected. It is the feedback gained from consumers that allows problem solving to occur. By fixing any problems, the retailer can focus on the customer directly, providing a more personal service. This too is important in retaining existing customers.
The diagram below illustrates how the performance levels of staff affect customer satisfaction. Bottoms Up therefore, by ensuring customer service levels are high, and the in-store communications are effective, it would be viable to assume that sales should increase, whilst building up a strong customer loyalty base.
Diagram 1.
11.0 Possible Recommendations From Other Retailers:
Many different retailers stock and sell alcohol, and all employ a variety of techniques
to maximise sales. Tescos, as well as other FMCG stores, has an extremely high turnover level, so can afford to cut prices (especially on spirits) and use different deals to keep its competitive advantage over retailers such as Sainsbury’s or Asda. It would be unwise to recommend cutting costs such as the FMCG retailers, as Bottoms Up is a specialist wine retailer, and by holding the premium costs, it keeps a strong brand identity.
The majority of other off-licences visited had a large amount of fridge space (in relation to store size) where chilled wines and beers were kept. However, Bottoms Up only uses 2 fridges, one for cheap white wines, and the other for ‘alco-pops’. For such a large specialist wine store, it seems peculiar that there is so little refrigerated storage space.
It was noted that not only in the FMCG stores, but other smaller more compact off-licences, that shelving was not as high as in the Bottoms Up observed. These shelves usually contain the more expensive, luxury wines, yet these cannot be seen without difficulty. By placing products within view of the customer’s eye, it is likely sales would increase.
12.0 What should Bottoms Up do? – Recommendations!
With any recommendations made, it is important to state the cause and effect that they will have on the retailer.
- With reference to the temperature level being too high in store it should be recommended that an air conditioning unit is installed to control a comfortable atmosphere in which the customer would feel relaxed and content all year round. Increased time would be spent in-store, thereby increasing sales.
- During the busiest hours (usually between 5pm – 9pm), the FMCG stores are full of customers, so Bottoms Up could offer a discount on products between these hours. Not only would this take customers from Tescos, which is the nearest rival, but the increased sales revenue should cover costs lost from the promotional discount. Although Bottoms Up may lose revenue in the short term, the increased sales over time will result in increased profit levels in the long-term.
- With the possible deregulation of licensing laws, Bottoms Up should prepare staff, security and increase stock levels to compensate for the late night convenience of alcohol take-home shopping. Costs would increase, however the sales increase over a longer period throughout the day would mean increased revenue to cover these costs.
- The high shelving leaves a lot of wines and some spirits out of sight for many of the consumers. It is therefore recommended that the top level be taken down by two shelves so that there is clear vision of wine names. As a result, shelf space would have to be reduced – this could mean that the extra wine would have to be kept in storage, or that rearranging shelf space would be necessary. The least selling wines (or the least profit making) could be removed or placed on special offer – so that their shelf space can be filled with the more luxury, expensive wines. The overall standard of store layout would therefore improve, result
- It had been observed that competition distribute leaflets providing information of new promotional offers. It is advised that Bottoms Up launch a Christmas and New Years flyer campaign. These flyers would be placed around Cowley Road, and in the University bars. Not only this posters be put up in the shop window educating passers by: this can be subconscious (Brassington & Pettitt, 2000) or may even tempt customers into the store.
13.0 Evaluation of recommendations:
- The idea of continuing ‘mystery shopping’ would be an effective means of evaluating the success of the recommendations. This could occur on a bi-monthly basis where the shopper observes any alteration made by the store to layout, promotions and staffing levels. The observations recorded would then be fed back to management, who would ultimately decide on any forthcoming changes.
- It is also advised that Bottoms Up should scan the competition, and review their latest promotions and offers. This is essential if Bottoms Up were to retain a competitive advantage over their rivals. Mystery shoppers could be used for this, but it is more cost effective for an employee to undertake this research.
- The most reliable and accurate form of evaluation would be to review sales levels. This could be done so that one can see how well those items on promotion did on sales, as well as the store in general. Figures can be gathered and put together to form trends of what sells best and when, this provides the retailer with an opportunity to either promote those not selling so well or to maximise sales on those that are.
14.0 APPENDICES I
Below find the layout of the observation framework, which was used in the study of Bottoms Up. It uses the SERVQUAL and ‘Total Visual Merchandising Process’ (McGoldrick, 2002) – the components within the framework allow a detailed observation process to be administered. Please see the results sheet on the final page for details.
15.0 Bibliography:
McGoldrick P. (2002) Retail Marketing, McGrow Hill
Brassington F., and Pettitt S., (2000) Principles of Marketing (2nd Edition), Pitman Publishing
Saunders M., Lewis P. & Thornhill A. (2000) Research Methods for Business Students F.T. Prentice Hall
Gummesson, E. (1999) Total Relationship Marketing: Rethinking Marketing Management from 4Ps to 30R’s. Oxford: Butterworth Heinemann
Egan, J (2001) Relationship Marketing, F.T. Prentice Hall
Christopher, M., Payne, A. and Ballantyne, D. (1991) Relationship Marketing. London: Butterworth Heinemann
Mintel – ‘Take Home Industry’, October 2001
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