THE boss of mystery shopping company Douglas Stafford has spoken of the sadness he feels at having taken the decision to close the company in the new year.
The Portsmouth-based business, which celebrated its 30th anniversary in 2019, is shutting up shop with the loss of 50 jobs. Here, managing director Nigel Cook, pictured, explains why.
I FOUNDED the business in 1989 in Northampton. Having been a general manager in the motor industry for many years, my plan was to become the best mystery shopping specialist in the automotive sector and that is what we achieved.
Working with most of the automotive manufacturers over 30 years, including BMW, Mercedes, Honda and most of the others, including many dealer groups, we became the specialist in the industry. The go-to company.
Douglas Stafford has been a prominent player in the industry and as a consequence, we have been the main target for competitors.
The result of this is that they have been buying business to achieve their overall objectives. This is not good for our sector, the industry as a whole or our clients.
We have arrived at a place where we are paying our video mystery shoppers the same as we were 10 years ago and charging our clients 30 per cent less than we were 10 years ago. Margins have diminished and the projects have got more complicated. We are also dealing with reduced budgets, projects being scaled down and in some cases cancelled altogether. The end result is a business model that is no longer sustainable for us.
GDPR has made the job of video mystery shopping more challenging. We are not just filming the person who has agreed to it, we are filming others, including some customers. The whole practice is being questioned by many.
The sourcing of addresses needed to facilitate the mystery shopping is a big GDPR issue. There are limited numbers of video mystery shoppers in the UK, so they have to travel the length and breadth of the country, and they are not local to the dealership. The European report based model is to use local people to do local shops.
I think video mystery shopping is coming to the end of its lifecycle in the UK. GDPR and other factors will continue to have an impact on this.
It saddens me to have to close after 30 years; I started the company in my back bedroom in August 1989. The past few years have been very challenging and this has been very detrimental to our bottom-line and cash-flow, leaving me no option but to close.
We have a great team, who have done a great job of supporting the business through these difficult times.
Fifty employees are going to lose their jobs. Some have been with us for 20 years, many for over 10 years. The time of the year makes it even more upsetting. We are doing everything we can to support our team, including organisations that are looking for staff visiting our office to meet with some of them.