Mystery shopping is a process by which a company measures its own quality of sales and service,

job performance Job performance assesses whether a person performs a job well. Job performance, studied academically as part of industrial and organizational psychology, also forms a part of human resources management. Performance is an important criterion for o ...

regulatory compliance In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance has traditionally been explained by reference to deterrence theory, according to which punishing a behavior will decrease the viol ...

by having a researcher pose as a customer and report their experience. Mystery shoppers typically mirror common

consumer behavior Consumer behaviour is the study of individuals, groups, or organisations and all activities associated with the purchase, use and disposal of goods and services. It encompasses how the consumer's emotions, attitudes, and preferences affe ...

s to test the consistency of the habits deemed important to a specific brand or industry. Mystery shoppers, who primarily operate as

independent contractor Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any oth ...

s or

gig worker Gig workers are independent contractors, online platform workers, contract firm workers, on-demand workers, and temporary workers. Gig workers enter into formal agreements with on-demand companies to provide services to the company's clients. ...

s, submit detailed reports and

feedback Feedback occurs when outputs of a system are routed back as inputs as part of a chain of cause and effect that forms a circuit or loop. The system can then be said to ''feed back'' into itself. The notion of cause-and-effect has to be handle ...

about their experiences. The method is also used by

marketing research Marketing research is the systematic gathering, recording, and analysis of qualitative data, qualitative and quantitative data, quantitative data about issues relating to marketing products and services. The goal is to identify and assess how chan ...

companies to gather specific information about a market or

competitors Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...

, including products and services. Mystery shopping can take the form of physical visits to business premises, or calling companies to evaluate their customer experience (often called mystery calling or customer experience research calling).

Industries and common usage

Mystery shopping assessments and reports range from simple questionnaires to audio and video recordings. This type of market research can be used in any industry, from B2C and B2B, although B2B is rare. Mystery shoppers interact with and report on a wide range of businesses and services, including gas stations, automotive dealerships, transportation services, real estate and property management firms, movie theaters, health and fitness clubs, insurance products, roadside assistance, health care products and providers for both humans and pets, assisted living facilities, and funeral homes. However, the most common industries that utilize this research method are retail, hospitality and travel, restaurants and fast-food chains, banking, and e-commerce.

Growth

The mystery shopping industry had an estimated value of nearly $600 million in the United States in 2004, according to a 2005 report commissioned by the Mystery Shopping Providers Association (MSPA). Companies that participated in the report experienced an average growth of 11.1 percent from 2003 to 2004, compared to average growth of 12.2 percent. The report estimates that more than 8.1 million mystery shops were conducted in 2004. The report represents the first industry association attempt to quantify the size of the mystery shopping industry. The Independent Mystery Shoppers' Coalition reports there are 1.5 million mystery shoppers in the United States alone. Similar surveys are available for European regions where mystery shopping is becoming more embedded into company procedures. As a measure of its importance, customer/patient satisfaction is being incorporated more frequently into

executive pay Executive compensation is composed of both the financial compensation (executive pay) and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, varia ...

. A study by a U.S. firm found more than 55% of hospital chief executive officers surveyed in 2005 had "some compensation at risk," based on patient satisfaction, up from only 8% to 20% a dozen years ago." In the United Kingdom, a ''Mystery Shoppers Practitioners' Group'' has been established under the auspices of the Market Research Society. Additionally, since 2010, mystery shopping has become abundant in the

medical tourism Medical tourism is the practice of traveling abroad to obtain medical treatment. In the past, this usually referred to those who traveled from less-developed countries to major medical centers in highly developed countries for treatment unavaila ...

industry, with healthcare providers and medical facilities using the tool to assess and improve the customer service experience. A 2011 survey by

American Express American Express Company or Amex is an American bank holding company and multinational financial services corporation that specializes in payment card industry, payment cards. It is headquartered at 200 Vesey Street, also known as American Expr ...

found a clear correlation between a company's attention to customer service and customers' willingness to pay more for good service.

CBC Television CBC Television (also known as CBC TV, or simply CBC) is a Television in Canada, Canadian English-language terrestrial television, broadcast television network owned by the Canadian Broadcasting Corporation, the national public broadcasting, p ...

's news magazine program ''

Marketplace A marketplace, market place, or just market, is a location where people regularly gather for the purchase and sale of provisions, livestock, and other goods. In different parts of the world, a marketplace may be described as a ''souk'' (from ...

'' ran a segment on this topic during a January 2001 episode.

Ethics

Mystery shopping organizations advise that their research should only be used for employee incentive programs and that punishment or firing is an inappropriate use of mystery-shopper data. However, stories of employees being fired as a direct result of negative mystery shopper feedback are not uncommon. The Trade Organization for Mystery Shopping Providers, MSPA has defined a Code of Professional Standards and Ethics Agreement for Mystery Shopping Providers and for Mystery Shoppers. Other organizations that have defined standards for Mystery Shopping are

ESOMAR ESOMAR is a global professional association for market research and insights that was founded in 1947. The name ESOMAR is an abbreviation of their original name, the European Society for Opinion and Marketing Research, which reflects the orig ...

, MRS and MRA. The most widely used set of professional guidelines and ethics standards for the Market Research industry is

ISO The International Organization for Standardization (ISO ; ; ) is an independent, non-governmental, international standard development organization composed of representatives from the national standards organizations of member countries. Me ...

. In the state of Nevada, mystery shoppers must be licensed by the PILB board and work under a company that has a

private investigators license A private investigator (often abbreviated to PI; also known as a private detective, an inquiry agent or informally a private eye) is a person who can be hired by individuals or groups to undertake investigatory law services. Private investigat ...

in order to perform mystery shopping jobs. Unlicensed mystery shoppers may face fines. In June 2008, the

American Medical Association The American Medical Association (AMA) is an American professional association and lobbying group of physicians and medical students. This medical association was founded in 1847 and is headquartered in Chicago, Illinois. Membership was 271,660 ...

's Council on Ethical and Judicial Affairs released a recommendation on the use of "secret shopper patients". The Recommendation: "Physicians have an ethical responsibility to engage in activities that contribute to continual improvements in patient care. One method for promoting such quality improvement is through the use of secret shopper 'patients' who have been appropriately trained to provide feedback about physician performance in the clinical setting." However, in 2009, the council decided to withdraw the report "in light of further testimony heard at the 2008 Interim Meeting f the AMA House of Delegates.

Research

When used in published research, mystery shopping is known as a simulated patient research methodology. The Checklist for reporting research using simulated patient methodology (CRiSP) should be used when reporting these research.

UK examples

The

UK government His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central government, central executive authority of the United Kingdom of Great Britain and Northern Ireland.

Crown Commercial Service The Crown Commercial Service (CCS) is an executive agency and trading fund of the Cabinet Office of the UK Government. The CCS is responsible for managing the procurement of common goods and services, increasing savings for the taxpayer by cen ...

operated a mystery shopper scheme from February 2011 to November 2018, whose remit was to provide a route for suppliers to raise concerns about

public procurement Government procurement or public procurement is the purchase of goods, works (construction) or services by the state, such as by a government agency or a state-owned enterprise. In 2019, public procurement accounted for approximately 12% of GDP ...

practice in England. The service was re-branded as the "Public Procurement Review Service" in November 2018 responding to feedback from suppliers and public bodies that the "mystery shopper" title did not properly reflect the role of the service. Section 40 of the

Small Business, Enterprise and Employment Act 2015 The Small Business, Enterprise and Employment Act 2015, also referred to as SBEE, received Royal Assent in March 2015. Its contents include regulatory reform (part 2), public sector procurement (part 3) and company director disqualification issue ...

created a statutory basis for some aspects of the review service. Trading Standards conducts underage sales testing (mystery shopping tests) on businesses, using child volunteers, to find out which traders are selling age-restricted goods to children. The tests, which are carried out using strict national guidelines, are undertaken to ensure traders are complying with the law. If a trader sells to the child volunteer, an investigation will take place which may involve legal action being taken. Also in the UK, mystery shopping is increasingly used by local authorities, and other

non-profit organization A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...

s such as

housing association In Ireland and the United Kingdom, housing associations are private, Non-profit organization, non-profit organisations that provide low-cost "Public housing in the United Kingdom, social housing" for people in need of a home. Any budget surpl ...

s and churches, to provide feedback on user satisfaction.

References