draft

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TABLE OF CONTENTS

1. Project Scope 3

2. Executive Summary 5

3. Introduction 6

4. Problem / Opportunity Statement 7

5. Developing The Evidence Base 9

6. Potential Solutions 11

7. Business Case 13

7. Return On Investment Analysis 15

8. Risk Management 15

9. Implementation Requirements 16

10. Stakeholder Management 17

11. Conclusions & Next Steps 18

12. References 19

“As a brand, we’re creating more and more
space for our customers to express

themselves as individuals. What better way to
self-express than through the playfulness of

beauty,’’ says Mike Elliott, Edgars CE.

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PROJECT SCOPE

1. PROBLEM STATEMENT
Do we Edgars, as a retailer, truly understand our customers’ needs when it comes to
service

 What are customers looking for?
 Does this vary by category of shop?
 Does service create loyalty?
 How does Edgars’ beauty service compare to key competitors?

2. FUNCTIONAL /ORGIANIZATIONAL CONTEXT
NPS Feedback suggests that staff freindliness and helpfulness is a weakness within the Edgars
beauty space.

Aim to research the type of customer service needs across, location, age, race and
gender and how to implement into the Edgars beauty space (across both current
customers as well as non-users)

3. MACRO ENVIRONMENT AND COMPETITOR LAYOUT

The study should include reference our Competitors’ service offerings as well as
market best practice.

 What is customer perception of competitors’ service offering?
 What services are offered by retailers locally and globally?
 What is best practice?
 Who is winning in this space?
 Are there any non-beauty focused retailers who offer a service model that could be

applied to beauty?

4. SPECIFIC DELIVERABLES
 Actual customer research across age, race, gender segments – minimum 500
people
 Benchmarking exercise against competitors
 Mystery shops across multiple competitors in different locations (including Edgars)
 Recommendations on service models across Edgars’ business.

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What will the project team be trying to answer?
What type of service is a customer looking for across, location, age, race and gender
and/ or LSM if relevant and how we can create a service solution that covers all our
customers’ service needs
What will the project team not be answering?
Anything non-service focused i.e. product, promotional activities etc.
What will the project team not be answering?
A synthesized report with clear and implementable solutions that can be tested and
implemented.
A rational and commercially minded solution (i.e. simply adding staff cannot be the
answer)
The measures of success
Sales increases, customer feedback and NPS scores – feedback on beauty service

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EXECUTIVE SUMMARY

This report provides context to the challenges faced by the Edgars Beauty division that are
causing continuous decline in market share. It explores tools and methods that can be utilized
in order to improve consumer loyalty and ultimately increase Edgars Beauty market share.
Through the use of market research surveys, beauty consultant questionnaires, interviews with
industry experts and online research, a common problem is identified that leads to a plausible
solutions that can be implemented.

The Survey and Interview results draws attention to the fact that Edgars Beauty consumers are
discontent with the level of customer service received from Edgars Beauty consultants. The
main concern centers on the Consultants lack of knowledge and lack in crucial beauty training.
This factor, coupled with changing consumer needs and spending patterns, appears to be the
major causes of market share decline.

Through understanding the service needs of Cosmetics/Beauty consumers, a solution is
identified, to address the skills shortage in beauty consulting. The selected solution, which is an
interactive Training App that has gamification and multimedia elements, will ensure that Edgars
Beauty Consultants engage in continuous training to keep up with latest trends. This app does
not only seek to educate but also provide a fun and interactive platform that will inspire,
recognize and reward talent.

This report further explores the financial feasibility of the chosen Training App and determines
whether there is merit or quantifiable financial gain for Edgars. A high level projected Return on
Investment (ROI) is outlined in this report, as well as Risks involved from a financial, legal or
employee relations aspect. Though it excludes relevant Stakeholder inputs, it analyses
stakeholder management to ensure effective use of our resources.

The report is concluded with the outline of next steps and additional resources required in order
to see the project from implementation through to completion.

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INTRODUCTION

Edgars Beauty & SA Cosmetics Industry

The South African Beauty/Cosmetics industry is estimated at R27.35bn at retail level
with an estimated compound annual growth rate of 4.6% and contributes 1,0% to the
gross domestic product (GDP). The beauty industry is known to be impermeable to
economic recessions. Retailers compete primarily through price, location as well as
target demographic markets. In an industry where consumers can be easily persuaded,
Customer Service is critical to profitability. It is still very possible to gain customer
loyalty and increase market share through customer service.

Edgars Beauty generates R2.4bn turnover and contributes to 30% of Edgars Chain
sales. It is currently the leading beauty-retailer in South Africa showcasing the biggest
internationally recognized makeup, fragrance and skincare brands. Edgars Beauty has
captured the South African market with coveted exclusive international brands, housed
within the most inviting, well-organized store format maintained by product
consultants.

Macro Environment & Competitor Layout

 Edgars Beauty competitors vary from other Retailers, Cosmetic Specialists,
Outliers, Supermarkets and independent agents. Clicks and Dischem are seen
by Edgars Beauty customers as the biggest competitors.

 Though pharmacies with a slightly differentiate target market, Clicks and
Dischem carry a broad and affordable range of Beauty products. They also offer
great promotions and discounts with the ability to earn membership points.

Advantages and Disadvantages of Edgars Beauty

 The advantage Edgars Beauty has over its competitors is that it offers a wider
variety of categories of quality brands, with well laid stores that are easily
accessible.

 Beauty Consumers sadly rank Poor service as Edgars Beauty’s biggest
weakness that keeps Edgars Beauty from gaining market share traction over
fierce competitors. It is therefore imperative to look into uplifting staff through
training in order to revive customer service and rejuvenate customer experience.

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PROBLEM/OPPORTUNITY STATEMENT

PROBLEM: Edgars Beauty is continuously losing Market Share

. SURVEY RESULTS: 500 NPS DETRACTERS, 160 WALK IN CUSTOMERS & 30 SEcRVICE
CONSULTANTS

49% 19% >50% 39%

Of Edgars Beauty customers Complained there was Would recommend Edgars Of Surveyed Beauty
complain about poor nobody to assist on the shop Beauty to friends and Consultants do not have
customer service primarly floor or the available Service family despite being Edgars generic Beauty School
due to Service Consultants Consultant was assigned to Account holders or frequent Training and are not
who lack product knowledge. a specific Brand. shoppers. comfortable providing beauty
advise to customers.

CHALLENGE SOLUTION EXPECTED BENEFITS

 Edgars does not fully  Improve our customer  Increased staff confidence
understand how to service service by instituting due to gained product
the beauty customer effective staff monitoring knowledge
effectively. measures
 Better customer interaction
 Consumer confidence in  Amplify staff training through improved staff
the Edgars brand has initiatives in order to equip morale
declined them to provide exceptional
customer service  Superior customer service
 Millennial and Gen Z’s and overall customer
imply the brand’s housed in  Formulate a unique experience.
Edgars lack relevance service solution/model to
improve sales and market  Improved Sales
 Customers experience an share
absence of trust due to
brand’s lack of credibility.

Formula for Success

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DEVELOPING THE EVIDENCE BASE

What do customers think about our service?

To try and understand what our customers are looking for in the area of service, 3
different surveys were conducted across:
1. Existing Edgars Beauty walk in customers,
2. Beauty Service Consultants,
3. Potential Customers who currently don’t shop Edgars beauty

30 660 30
SERVICE EXISTING NON BEAUTY
CONSULTANTS BEAUTY CUSTOMERS CUSTOMERS

The aim of these surveys was to better understand our customers’ viewpoint on the
current service offered by Edgars and understand how that view point varies from that
of our Service Consultants.

Survey were conducted across ALL 9 Provinces of South Africa

Segments: Standard, CBD, Premium, Super Premium, Concept, Rural and
standalone
Age: 18 to 55
Race: Black, Indian, Colored and White
Gender: 20% Male & 80% Female
Income levels: R 5000 - +R25 000
Category: Fragrance, Skincare & Color

More than 50% of the survey response comes from the Gauteng and KwaZulu Natal
Region. With 70% received from Standard, Premium and Super Premium store
segments.

DEVELOPING THE EVIDENCE BASE 9

SURVEY RESPONSES BY PROVINCE SURVEY BY STORE SEGMENT

2% 2% EASTERN CAPE
3% FREE STATE
1% 13% 8% GAUTENG 20% 15% 5% CBD
16% 44% KWAZULU NATAL Concept
6% LIMPOPO 23% Premium
MPUMALANGA 30% Rural
5% NAMIBIA Standalone
NORTH WEST 7% Standard
NORTHERN CAPE Super Premium
WESTERN CAPE

 More than 50% of the survey response comes from the Gauteng and KwaZulu Natal
Region. With 70% received from Standard, Premium and Super Premium store
segments.

RESPONSES BY GENDER AGE GROUP

20% FEMALE 15% 16% 18-25
80% MALE 23% 25-35
36-45
46% 46-55

 80% of the Survey responses came from females between the Age Group 36 – 45,
proving that Edgars is not the preferred Retailer for Millennial and younger
consumers.

 The low percentage of Male participants could be seen as an opportunity to probe
more on the service and product needs of the Male Consumer in Beauty

PREFERRED COMPETITORS

15% 31% Clicks
8% Dis-chem
8% Other
Truworths
38% Woolworths