The Retail Sector is Vulnerable to Reputation Risks
When it comes to the retail sector, reputation is everything. Your companies reputation is what will drive customers to your store. Unfortunately, this can be quite difficult for a retailer to control as there is third party businesses involved in the supply of goods to their customers. Some companies damage their reputation through their own negligence but in the retail sector the uncontrollable reputational risk that’s out of their hands is most common.A perfect example of this would be during Christmas time when retailers promise Christmas delivery if consumers complete their transaction by the 23rd of December. Of course the retailers believe this to be a promise they can keep, but unfortunately the third party logistic companies can run into their own problems and thus the products may not always get to the customers on time.Unfortunately in this type of situation, it’s the retailer in the line of fire as the customer now blames them for making a promise that they couldn’t live up to.
Thanks to social media, customers now have a louder voice and an audience that wants to listen which often results in these dissatisfied consumers posting negative and sometimes unfair comments about their unfortunate experience with the retailer which can greatly damage the companies brand reputation. This type of problem is best dealt with as swiftly and efficiently as possible by getting to the bottom of the issue and doing the utmost to rectify it.Another reputational risk to the retail sector is malicious rumours spreading and going viral online. A perfect example of this type of case would be the bath salts scare a few years ago. Even though bath salts weren’t actually the recreational drug that was causing violent outbreaks the malicious rumours and horror stories misled alot of consumers and they avoided buying bath salts completely, out of fear. The best way to deal with a situation like this in the first instance would be organising a favourable press release before the rumour spreads. Have a read of the interesting article below on the cost of rectifying the damage of a malicious rumour.
Reputation risk can be difficult to prepare for no matter what industry you’re business resides. If a risk does pop up, it is important to respond as quickly and as appropriately as possible. This will help mitigate the threat. New tools such as social media can often be the catalyst for brand horror stories, however, they can just as easily be used by companies to discover potential reputational threats and address them before they spiral out of control. One-off issues are easily resolved and won’t impact your business reputation in the long term. Yet, if a business continues to make mistakes by just handling complaints incorrectly and not consistently monitoring their online presence and brand mentions, they will eventually lose all credibility.