Thursday, May 14, 2009

Customers are predominantly honest!

In continuation of one of my previous post about shrinkage and in defense of customers, I would like to share this interesting incident.

Going back to my favorite period of reminisces, the early days of Foodworld, we were constantly trying to figure out why customers still preferred the neighborhood kirana store as compared to the air conditioned and more convenient supermarkets. After talking functional issues like pricing, the preferred quality of groceries, home delivery, etc., we were still unearthing some interesting insights.

One such insight was the comfort level that the housewife has in being able to send back stuff she is not happy with. In one of my earlier articles, I have mentioned how shopping is a habit, especially given the fact that we do not have adequate inputs for making truly rational purchases. In that context, the comfort that the store would take back/ replace something is a significant cushion for the housewife. I can’t say that the same holds true of today’s consumers. But that is another story.

A program was initiated to popularize the replacement policy, wherein anything excepting razors n similar personal items could be replaced/ returned with a defined number of days. No questions asked.

Surprisingly, the resistance to the program came internally from the store team. At the briefing meeting they were vehement in their protest and the biggest argument was how this would be grossly misused by customers. And so a pitched battle ensued between marketing and operations.

Finally the then head of Foodworld stepped in and mandated that the program should be given a chance. But, to be fair to the operating team we would meet again in a month and review.
The program was rolled out. Lots of banners all over the place, posters at the store, shelf edge material, etc. Basically, no customer could miss that message.

A month went by quickly and we were reviewing this initiative. I had not heard of any major incident of the program having been misused. But, I had also not heard any positive feedback of acceptance from the store team and was looking forward to what would be mentioned.
Finally when we discussed this program, it was a bit of an anticlimax. If I remember correctly there had been a few cases of misuse including a lady who brought back a half eaten can of cheese with fungus on it!

When compared to the total number of customers, the percentage of such instances was miniscule and the benefits of creating this kind of trust far outweighed the few cases.
Having said that, in most countries where retail is mature customers also evolve. Or rather people who want to misuse the systems and processes also evolve and therein lies the challenge for a retailer today.

To trust or not to trust!

Will leave you with this experience of mine at Makro, UK. While at the customer service desk I was aghast to see the lady staff accept a supposedly defective hand drill for return/ replacement. When I pointed out that the drill could be working, the lady drawled in her Manchester accent, “It could be working, luv. But if I were to check and got a shock the company would pay far more than what the drill costs. Also luv, why would anyone want to return a working drill”!! Is it any wonder that we get to read how some people purchase a nice dress on Friday and return it on Monday, after the weekend party!


Sandra said...

What a fun to read your articles! Interesting and entertaintment, pretty good mix!

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