CommonWealth Magazine’s 2017 Golden Service Awards have been announced. In eight out of the 24 categories, last year’s industry bellwethers lost their top spots to competitors that were faster and more agile in sniffing out industry trends and customer expectations.

The survey results also show what customers value most when it comes to evaluating services, i.e. “service attitude,” “efficiency” and “service environment,” closely followed by “distinctiveness” or “innovation.” The surveyed companies clearly scored lower on distinctiveness and innovation. In other words, service enterprises have plenty of room to set themselves apart by developing a broader range of innovative, one-of-a-kind products and services.

Trend No. 1
Creating Opportunities to Engage Customers

Swedish furniture house IKEA took the crown in the lifestyle retailer category this year, dethroning reigning champion Muji from Japan. The transnational company also won third, ninth and sixth places in the rankings across all sectors for competitiveness, distinctiveness, and innovation, respectively.

In its campaigns over the years, IKEA has constantly spread the message that it is giving people the opportunity to make their homes more beautiful. IKEA Taiwan spokesperson Nancy Wu points to the typical Ikea megastore experience where customers can not only see and touch furniture but also feel the atmosphere created by different room floorplans and furniture arrangements. “[The showrooms] give customers more ideas and make them think that it is important to take action and make changes,” Wu points out. Electronic commerce cannot create this kind of immersive customer experience.

Despite the success of its stores in Taiwan, IKEA has designed another marketing strategy that centers on “creating opportunities to make the customer experience part of everyday life.”

In late 2015, the Ikea House opened in a refurbished 40-year-old row house next to Huashan 1914 Creative Park in Taipei. The white façade of the four-story building features window frames in seven bright colors, while the interior is furnished and decorated with IKEA products.

A coffee shop on the ground floor serves drinks and snacks. Patrons can venture upstairs with their trays to the “apartment”, which boasts a living and dining area, bedrooms and a large kitchen. In contrast to the megastores, customers are expected to feel more “at home” at the Ikea House, just as if they were visiting a friend. Customers can hole up in a quiet corner for coffee or have lunch with their friends. “They can look around and get some inspiration from the furniture layout,” explains Wu.

The trend to use food and beverages to reinforce a brand image and immerse the customer in the brand’s essence is fast becoming mainstream. France-based cosmetics retailer l’Occitane has also jumped on the bandwagon.

In the drugs and cosmetics sector, l’Occitane stole the crown from the much larger Cosmed chain. While the market penetration of l’Occitane, which mainly sells fragrances and natural body care, is not high, its outlets scored high with consumers on distinctiveness, environment, attitude and innovation, leaving the competition in the dust.

L’Occitane, which also sells its product online, has meanwhile opened cafés in Taipei and Tainan that offer bistro-like fare in a décor reminiscent of Provence in southern France, where the brand originated.

As non-food and beverage brands open signature coffee shops to deepen customer attachment, the established coffeehouse chains continue to thrive. Among the chain stores, Louisa Coffee deserves particular attention. Although the company came under fire earlier this year for plans to switch to a food scandal-tainted milk supplier, it more than doubled the number of its stores to over 200 last year, greatly expanding its customer base. Thanks to improved brand and service quality, Louisa Coffee made it into the Top 5 in the coffeehouse chains category for the first time this year.

The finance and banking sector is also eager to reach more customers, and forging alliances with other industries has as a result become common practice.

CTBC Bank managed to topple E.SUN Commercial Bank, the longtime industry champion, this year thanks to a greatly increased market penetration.

CTBC Bank targets online shoppers through continued cooperation with the three largest B2C e-commerce platforms under Yahoo! Kimo while also aggressively pushing mobile payments. Late last year, the bank launched a co-branded credit card with Line Corp., thus gaining access to the large user base of Line Pay, the mobile payment service of the popular messaging app Line. The bank went even further early this January by striking deals with 7-Eleven and Family Mart, which account for more than 80 percent of the island’s convenience stores, that enable convenience store customers to pay through Line Pay, WeChat Pay and other mobile payment apps by registering their credit cards.

Trend No. 2
Selectiveness + Distinctiveness = Novelty Factor

Competition in the supermarkets/hypermarts sector remains tough as home-grown brands and multinational brands wrestle for market share and online players keep joining the fray. Against this backdrop, a distinctive, unique “experience” is key to attracting customers.

COSTCO, the unchallenged No. 1 in the supermarkets/hypermarts category, prides itself on its "selectiveness" or the ability to pick the best deals for its customers.

Jasons Market Place, a high-end imported food supermarket chain, has moved up in the Top 5 to rank three, up from rank five, which it held for the past two years. Sarena Chou, head of sales & marketing, says, “In Taiwan, buying any kind of product is extremely convenient. Only products that are special and rare easily attract the eye of the consumer.” The supermarket chain, which hails from Singapore, thus focuses on exclusive sales of imported foods and popular products from Europe and North America, Japan, South Korea and Southeast Asia. Among its selection, customers can find produce and wines from British food retailer Waitrose, which also supplies groceries, wines and liquor to Queen Elizabeth and Prince Charles.

Jasons supermarket in Taipei 101 reopened after renovation in late March. It sets itself apart by selling distinctive, imported brand foods.

With outlets mainly based in department store food courts, Jasons began to set up individual outlets last year, opening six street-side shops and neighborhood stores. It is also diversifying its offerings beyond the sale of goods. In late March, the revamped Jasons flagship store in the Taipei 101 building offered high-end steak freshly grilled onsite for takeout.

In the airline business, Emirates Airline, which only began to fly to Taiwan three years ago, also relied on its “distinctive" luxury image to squeeze out rivals. While the Dubai-based airline snatched rank two last year as a dark horse, it managed to grab the top spot this year, relegating Taiwan’s Eva Airways to second place. It was the only airline to make it into any Top 10 across all sectors, scoring ranks ten, four and two for competitiveness, distinctiveness, and innovation, respectively. (Tables 1, 2, 3)

On top of touting its “luxury in the sky” experience, the airline operates a vast route network and has a young fleet of Airbus A380 aircraft featuring plenty of in-flight entertainment devices. With its hub, Dubai International Airport, conveniently located midway between Asia and Europe, Emirates is popular with travelers who like to take advantage of stopovers in Dubai for shopping or short holidays before they travel on to Europe and other destinations. Last year, passenger volume on Emirates flights from and to Taiwan increased 42 percent.

Trend No. 3
Expansion, Niches as Opportunity

The Chinese Internet giant Alibaba Group last year announced “globalization” as its major strategy. Alibaba Group CEO Daniel Zhang said at the time that Tmall Global, a cross-border marketplace that allows Western vendors to sell online in China, and g.tabao.com, which helps Chinese consumers get to know foreign brand products, will play key roles. “We are going to build our business around the two brands, in order to raise awareness among customers and offer optimal user experience,” Zhang said.id.

In Taiwan, Zhang's bold declaration seems to already be bearing fruit. As a dark horse in Taiwan’s online retailing sector, Tmall Global benefitted from its "double eleven” Global Shopping Festival on November 11, which generated record sales. While the online retailer's market penetration in Taiwan is low, it made it into the ranks of the Top 5 at the expense of Yahoo! Taiwan. American online retailing behemoth Amazon.com, which last year made the Top 5 for the first time, became the runner-up this year.

This proves that cross-border electronic commerce is thriving. In a survey of Taiwanese online consumers published last month by the Market Intelligence Center under the Institute for Information Industry, 85 percent of respondents said they would continue to shop on cross-border e-commerce channels or try to do so in the future.

Other service enterprises are responding to globalization by diversifying into niches.

The vertical e-commerce platforms saw a newcomer this year. Pinkoi, a curated marketplace for independent designers in Asia, soared straight to the top of the sector’s Top 5, as well as clinching the crown of the Top 10 across all sectors for innovation. (Table 3)

Launched in Taipei six years ago, Pinkoi differs from other e-commerce platforms in that it endeavors to create linkages between Asian designers and artists, and mainly sells handmade products. It has also successfully branched out into Thailand, Greater China and Japan with localized websites, while it reaches design lovers internationally with its English-language website.

Even in Japan, a market with mature design products, Pinkoi has attracted considerable consumer interest. “We want to proceed like David, who defeated Goliath,” notes CEO and co-founder Peter Yen. “What we brought [to Japan] is an international outlook, international products, designers and a community. For them [Japan], this makes for a novel touch and experience.”

The department stores/malls sector has seen a major reshuffle due to new entrants and improved public transport that brings more shoppers to certain places. The TaiMall Shopping Center in Taoyuan and the newly opened Mitsui Outlet Park in New Taipei City’s Linkou District are both first-time entrants into the Top 5, kicking out Breeze and the Hanshin Arena Shopping Plaza. TaiMall and the Mitsui Outlet Park pulled away from their rivals thanks to distinctive services and their service environment.

The TaiMall complex covers a large area and includes a department store, cinema, sports and entertainment facilities that draw more than 10 million visitors per year. “For modern people, consumption is not going shopping for a single purpose, but is about looking after the various functions of your life,” observes TaiMall General Manager May Miao. “There are not many shopping places around Taipei City, New Taipei or Taoyuan that meet all the requirements of good dining, good entertainment, strolling around and good shopping. Now that the shopping area is well connected, the competitive edge of TaiMall has come to the fore,” remarks Miao, alluding to the recently opened new subway line between downtown Taipei and Taoyuan International Airport.

Competition in the Chinese-style chain restaurants sector is also fierce, forcing operators to develop new niches. Easy House Vegetarian Cuisine, which was founded in Taichung, has expanded to nine outlets island-wide. While the chain continues to focus on healthy, light cooking, it also strives to develop a broader, more diverse selection of vegetarian dishes.

 “We incorporate different national cuisines and cooking methods. Our dishes must be healthy and tasty. Food presentation, garnishing and colors differ from the traditional approach,” says Easy House founder and Chairperson Lisa Huang.

The five-star Hi-lai Harbour buffet seafood restaurant chain, which originated in the Hi Lai Hotel in Kaohsiung, for the first time joined the Top 5, grabbing rank three, even ahead of Eatogether, another high-end restaurant chain. Service environment and distinctiveness were key to Harbour's good performance.

As Harbour General Manager Sophie Lin points out, from the environment to the ingredients, everything must be geared toward providing a surprise factor to patrons, “We must see to it that customers always feel it’s an interesting dining experience and keep coming back.”

The chain’s Dunhua branch in Taipei, for instance, features eight differently themed seating areas so that returning customers enjoy a different dining experience each time. While seafood accounts for 60 percent of the dishes served, seasonal variations to 30 percent of the menu ensure a novelty factor. On top of that, guest chefs from around the world are hired to show off their skills at the various branches, tantalizing patrons’ taste buds with an even broader variety of dishes. The branches may also develop their own signature dishes. In Taipei, for instance, homesick southerners can find solace over a bowl of Tainan beef noodle soup.

Trend No. 4
Personalized Consumption

Among the five-star hotels, the Fleur de Chine Hotel won the top spot for the first time, deposing Hotel Royal Chiaohsi, the reigning champion for four consecutive years. The Fleur de Chine Hotel prevailed due to its high score in innovation.

The hot spring hotel, which overlooks Sun Moon Lake in central Taiwan, emphasizes considerate and innovative service. “We make our customers feel that they are being looked after all the time,” declares Winifred Chen, the hotel’s general manager.

As soon as a customer books a room, hotel personnel begins to collect information to make sure that the guest are treated with a personal touch. They will inquire about the purpose of the stay and recommend meals or activities. One day before the guest’s arrival, the weather forecast is sent to their mobile phone. And sometimes there will even be a special surprise. Once, when a group of employees of Din Tai Fung, the famous dumpling restaurant chain, stayed at the hotel, they were greeted with a cake made in the shape of xiaolongbao or steamed dumplings. “We help create beautiful, unforgettable moments for everyone,” says Chen.

Last year, the hotel embraced the increasing trend toward mobile travel booking, joining Agoda, booking.com and other online booking platforms. Hotel management will reply to online reviews within three days. Last year, a new bus tour around the lake was launched after such suggestions from guests.

In the original brand auto services sector, Mercedes-Benz defended its top spot, but BMW moved up one spot to rank two, defeating Lexus, achieving its best-ever survey result. BMW is the only car brand that made it into the Top 10 for innovation across sectors.

In its campaigns, the German automaker has always emphasized the “joy” of driving. Pan German Motors. Ltd., BMW’s Taiwanese agent, also strives to highlight the brand’s longtime core value in its marketing events and product portfolio.

Tu Huang-hsu, executive director of Pan German Motors, once told CommonWealth Magazine that his company imports most new BMW models, despite the fact that Taiwan’s domestic market for luxury cars is not big, because customers want variety and novelty. “We need to build an image or else customers will feel that the model line-up is too boring,” Tu says.

Such considerations are important today as people demand personalized consumption. “We make sure that these products are imported to reach every single person,” says Tu.

What doesn’t change in the changing consumer world is that people are attracted by novelty and a personal touch offered by products and services. Enterprises need to listen closely to keep track of what their customers want in order to build an enduring attachment to their brands.

Translated from the Chinese by Susanne Ganz

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Click here to view: 
♦ Top 10 Companies for ‘Competitiveness’ across Sectors
♦ Top 10 Companies for ‘Distinctiveness’ across Sectors
♦ Top 10 Companies for ‘Innovation’ across Sectors
♦ Top 5 Golden Service Award winners in each category