It’s Called Credibility
When Norman Mayne, CEO of the three-store Dorothy Lane Market in Dayton, Ohio, got the word that his stores had been selling Coleman Natural Beef that may have been contaminated with E. coli, his first instinct was to make sure that everybody knew.
So pretty much the first thing that Mayne did was to pull together a group of staffers who had the responsibility for calling 10,000 customers in the company’s database, a task that was achieved in 72 hours. Mayne even made some of the calls himself.
You read that right. 10,000 calls. 72 hours.
It doesn’t surprise me that Dorothy Lane Market would do that, because that is the kind of operation that Mayne always has run. He puts his customers first, always—and runs about as transparent an operation as I can imagine. There were, in fact, people in the industry who advised him not to make those phone calls, not to talk about the issue, to batten down the hatches and try to ride out the storm with as little communication to the outside world as possible. That would, of course, have been an enormous mistake for anyone, but especially for Mayne, who never has run that kind of business.
Good lesson for any other retailer dealing with these kinds of problems. It is called credibility. Some retailers have it. Some don’t.
The E. coli issue that Mayne confronted is an extreme kind of problem that, as of this writing, still hasn’t been resolved. What we know is this—a company called Nebraska Beef, with a long history of food-safety violations and what could generously be called a contentious relationship with the U.S. Food and Drug Administration (FDA), has been implicated in the sale of beef that was contaminated with E. coli. Coleman Natural Beef got involved when it arranged to have some of its meat processed in a Nebraska Beef facility that apparently was using substandard practices; that’s what led companies such as Dorothy Lane and Whole Foods to start recalling beef that, until that time, they’d been fairly confident was safe. (Kroger had similar problems with beef processed at the plant, but it knew that the processing was being done by Nebraska Beef.)
Now, I don’t really expect Whole Foods to start calling all of its customers in the same way that Dorothy Lane Market did. It is a much bigger company with a much bigger customer base, and that kind of attention probably isn’t possible.
However, my observation would be that there was a vast difference between how the two companies handled the issue that had little or nothing to do with size or scale. I read some of the Whole Foods press releases, and they sounded to me like they’d been written by public relations people, edited by lawyers, and then rewritten by spin doctors. And they sort of took the blame without shouldering the responsibility, at least in my reading of these documents.
A retailer has no choice but to accept both blame and responsibility, even if it isn’t the retailer’s fault. The simple fact is that no matter who or what is responsible, the consumer doesn’t know from Nebraska Beef or even Coleman Natural Beef. The shopper knows that he or she bought the food at Whole Foods or Kroger or Dorothy Lane Market or wherever. That’s where the buck was spent, and that’s where the buck stops.
That’s what makes the Dorothy Lane example so important. Mayne took both the responsibility and blame, and in doing so, I believe, he actually bolstered his credibility. It may be too early to tell, but so far the retailer has gotten almost no negative publicity in the communities it serves and, in fact, the company is likely to come out at the other end in almost better shape than how it started.
It is called credibility. Some retailers have it. Some don’t.
I am reminded of how, many years ago, there were food-safety questions in Ireland, and questions were raised about whether beef being sold in that nation’s stores was safe to be consumed. Questions, that is, about every retailer other than Superquinn. Feargal Quinn, the CEO of the company, had long championed a system that not only traced all the beef being sold in his chain of stores, but also featured signs in the various departments of his stores that highlighted who and where his suppliers were. It was transparency before that word became popular within the supermarket business, and it gave Superquinn credibility. And so, as pretty much everybody else’s meat department sales declined because of consumer concerns, Superquinn’s meat sales went up.
It’s called credibility. Some have it. Some don’t.
I was shopping for hamburger meat recently and it suddenly occurred to me that I didn’t know where it was from. So I grabbed an assistant manager who was walking by and asked him point blank: “Is your ground beef from Nebraska Beef?”
“Not a problem,” he responded. “That’s only at Whole Foods.”
Not exactly, I replied. And I pointed out that he hadn’t actually answered the question.
He told me where the beef was from—Kansas—which left me satisfied about the hamburger but not entirely pleased with his attitude. So I suggested to him that maybe a sign in the meat department that would reassure customers would be in order.
He looked at me aghast. “No, no, no,” he said. “You don’t want to draw attention to it either way.”
Which in my estimation was the worst comment he could have made. Either way. And certainly not the kind of comment that anyone at Dorothy Lane Market would have made.
It’s called credibility. Some have it. Some don’t.
Staples partners with Blackhawk for gift cards
PLEASANTON, Calif. Staples has announced an exclusive partnership with the Blackhawk Network, the largest third-party provider of prepaid gift-cards, to carry Blackhawk’s Signature Gift Card Mall, currently found in grocery stores such as Safeway. Blackhawk’s Gift Card Mall features over 300 branded gift cards across categories such as fashion, tickets, electronics, home and sports.
“Consumers love buying and receiving gift cards, and putting the Gift Card Mall in Staples stores will make it easy and convenient for our customers to buy a wide variety of gift cards,” said Mark Mettler, senior vp and gmm at Staples.
“Staples is a valuable retail outlet for us because of its understanding of the B2B aspect of our business,” said Don Kingsborough, ceo of Blackhawk Network. “Working with Staples, we will reach small business owners and give them the ability to purchase prepaid gift cards for their employees in the same place they buy office supplies.”
Staples is the first office supply store to carry Blackhawk gift cards.
RadioShack appoints new chief marketer
FORT WORTH, Texas RadioShack announced the appointment of Lee Applbaum to the position of evp and chief marketing officer. Applbaum will be responsible for advertising, brand management, customer relations management and marketing and will report to chairman and ceo Julian Day. He will also serve as a member of the office of the chairman, comprised of Day; Bryan Bevin, evp of store operations; Jim Gooch, evp and cfo and Peter Whitsett, evp of merchandising.
“Lee’s joining us at RadioShack represents another significant step in strengthening our senior management team,” said Day. “Lee’s background and successful track record position him well to add value to our brand.”
Applbaum began his career at Lederle Consumer Health, a division of American Cyanamid Co., shortly after earning his MBA in 1994 from the Isenberg School of Management at the University of Massachusetts at Amherst. He has also worked at The Coca-Cola Co., Schlotzsky’s, Footstar and The David’s Bridal Group, a division of Federated Department Stores. Immediately prior to joining RadioShack, Applbaum was the chief marketing officer for The Schottenstein Stores Corp.