Special report



Why was this audit so important?

2012 was a tipping point, and 2013 is the year of consolidation for the luxury market in China, the old rules have changed, and new ones now apply. Service in China’s luxury stores has typically been lower than many other places in the world for many reasons, but it could easily be improved and used as a differentiator in a more difficult market.

In this report we set out to determine the current level of luxury service in Shanghai, the city we would expect to have the most demanding customers, and some of the best stores in the country.


Management summary

This report summarises the findings of the first ever, independent multi-brand luxury store audit carried out in Shanghai across the Watches & Jewellery, and Fashion and Accessory sectors. 39 stores belonging to 39 individual brands were audited over a two-week period by the same audit team, using consistent audit criteria to ensure repeatability of the data gathered.

The purpose of the audit was to benchmark luxury retail service in what is regarded as China’s most cosmopolitan city that is home to many of the most sophisticated and experienced luxury shoppers in the country. Luxury retail service has for many reasons not been the highest priority for luxury brands in the past, but after the significant change in market dynamics experienced in H2, 2012, brands operating in China have begun to adapt and change their operational strategies, and we aim to assess retail service in this context……continued


What did Chinese consumers actually say to us about their luxury service experiences?

“I enjoy walking around stores to find the latest products and appreciate their windows. If the shop assistant has the right attitude and good communication skills, it would trigger me to make purchase. I think those luxury store staff focus too much on customer’s appearance, but lack the skills to identify potential customers. I was once treated disrespectfully, which reminded me that I should dress up when go out shopping! I spend most weekends outside the Mainland therefore I hardly shop here for luxury goods any more. What impresses me most are some independent designer shops,the retail experience there is much better”. Female in her 40’s

“The service is bad, basically no service! Hardly anyone greeting you when you enter the store. No staff offered any recommendations, and after I finally choose the products, I have to find the staff in order to make payment. Once you ask for their opinion or a recommendation everything is good, and they are only interested in selling you the expensive items. The real luxury consumers in China are men and they won’t travel overseas just for cheaper shopping. Therefore, the shop assistants need to learn to make good recommendations”. Male in his 20’s


The audit process

  • 39 luxury stores were individually audited by the same team over a two-week period
  • 20 retail service performance criteria were assessed
  • 18 Fashion & Accessory and 21 Watches & Jewellery stores were visited, all operated by different brands
  • Assessment was made across four criteria
    • Retail staff and customer interaction
    • Retail team interaction
    • Retail staff attitude
    • Retail staff etiquette and behaviour


A snapshot of the report findings

Note: The actual performance results of the stores audited for this report remain anonymous within it, and performance data shown graphically is for comparative purposes only.

Exhibit 1 below shows the average score for each of the four audit criteria categories and both luxury sectors. The figures at the top of each column indicate those above and below average in each case.


How did stores perform?

Exhibit 2 and 3 below demonstrate how individual stores in both luxury sectors performed across all the audit criteria. The 0% line is the transition line between basic retail service, and ‘standard’ luxury service, the expectation is that every store should attain a full score on the lower part of the graph as the criteria that were used are those we would expect to find in more common and less expensive retail environments.

Above the transition line, the audit assessed performance against criteria to be delivered in all luxury stores that was not necessarily likely to be found in non-luxury stores. Accepting that staff are human and perfection is not always possible, stores that were performing acceptably should attain an overall score of 90% to 100%.

  • No store met all the criteria below the transition line
  • The highest scoring stores in both sectors delivered overall performance’s of 75 to 80%
  • The worst performing stores in both sectors attained scores in the luxury service criterion of a little over 10%

Table of Contents



Why read this report?

Chinese luxury consumers have become savvier in the past year in many ways, one being their understanding and expectation of luxury service standards. Many have travelled internationally and experienced luxury retail service that has established a benchmark in their minds, and a feeling that they are paying more and getting less overall from luxury brands in China.

In this report find out exactly where luxury service is failing customer expectations, and where it can be improved and used as a differentiator in todays more competitive market. The report identifies the areas of weakness of the stores audited and provides additional observation and commentary to the quantitative measurement results.



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