30 June 2014

Tourists disillusioned with Singapore shopping, loyal locals love their telcos

The Institute of Service Excellence (ISES) (卓越服务研究院) at the Singapore Management University has identified a decline in customer satisfaction with retail and info-communications in Singapore.

In the 2014 first quarter (Q1) Customer Satisfaction Index of Singapore (CSISG) results for the retail and info-communications sectors, the university noted that customer satisfaction for the retail sector fell by 2.5 points (or 3.5%) year-on-year to 69.6 points on a 0-to-100 scale. The info-communications sector also dipped, but by 0.9 points (or 1.3%) year-on-year to 66.8 points.

Satisfaction with eight aspects of retail were measured, of which only supermarkets improved: 
  • Departmental stores dropped by 6.9 points, a 9.1% fall
  • Petrol service stations dropped by 1.4 points, a 1.9% fall 
  • Motor vehicles dropped 2.5 points, a 3.4% fall
  • Fashion apparel went down by 2.3 points, or 3.2%
  • Furniture stores tumbled 8.2 points, representing a fall of 11%
  • Jewellery stores flopped 2 points, a 2.8% decrease
  • Clocks & Watches were 4.4 points, or 6.0% down, while 
  • Supermarkets actually improved by 1.1 points, a marginal increase of 1.6%. This was the sixth year-on-year increase for the subsector, giving it supermarkets a record satisfaction score of 71.1 points in 2014.
Puma store window display in a mall in Singapore.

The ISES notes that 
tourist respondents were significantly less satisfied this year, compared to last year, with all of the subsectors that took into account tourist responses, namely Departmental stores, Fashion apparel, Jewellery stores, and Clocks & Watches, taking a hit.

Caroline Lim (林晓玲), ISES Director (总监) said, “While both local and tourist respondents were less satisfied with these four subsectors compared to 2013, the difference in magnitude of the changes for each group was quite stark, with tourist satisfaction falling 9.7 points (12.2%) while local satisfaction dipped 1.4 points (1.9%).”

Further analysis showed that all three drivers of satisfaction, namely customer expectations, perceived quality, and perceived value, fell significantly year-on-year for tourist respondents. However, in contrast to tourists’ declining perceptions of value in these four sub-sectors, perceived value for local respondents improved significantly year-on-year. Locals’ expectations and perceptions of quality did not change significantly.

Lim added, “Satisfaction levels will fluctuate year to year, but company leadership should maintain a long-term outlook to progressively raise customer satisfaction. Using this quarter’s Departmental stores data for example, a highly satisfied customer would have spent 23.3% more at the store over a one year period than a less satisfied customer. This link between improved satisfaction and increased spending is compelling and worth tracking.”

Within the info-communications sector, the mobile telecoms sub-sector dipped 0.85 points (1.3%) to 67.2 points, while the broadband subsector fell by 2.2 points (or 3.3%) to 65.3 points. The CSISG added two new subsectors this year: pay TV, scoring 66.5 points, and Wireless@SG, the free nationwide wireless network, which scored 61.5 points.

A significant difference in satisfaction and loyalty levels between new customers, defined as those who had been under two years with the telco, and re-contract customers, those who had decided to sign up again with the same telco after their 2-year contract had expired.

The ISES notes that re-contract customers have greater levels of customer satisfaction and loyalty as compared to new customers. Re-contract customers also had much smaller gaps between their levels of expectations and the perceived quality of their telco, compared to new customers.

Assistant Professor of Marketing (Practice) Marcus Lee (李德发), Academic Director (学术总监) of ISES said, “It is important for service providers to try and meet the ever changing expectations of their customers. Our analysis shows that satisfaction goes down when the perceived quality of the product or service does not live up to the expectations of the customer.

“And for the most part, our telcos seem to be doing a good job of this with their longer tenured customers. In fact, the latest findings show that although expectations of re-contract customers were significantly higher than new customers in the broadband and pay TV subsectors, the telcos were also seen to be delivering an equally high level of quality,” he remarked.

*Face-to-face interviews were conducted with 9,250 resident and tourist respondents between January and March 2014.