Learn more about ADA (www.ada.gov).
all suppliers to sign a code of conduct that underage labor is not used. Hannaford Bros.’
pledge sums up the role of a socially involved retailer:
Our business depends on the people who shop at our stores and the people who work for us. When we help our communities, the places where our customers and associates and their families live and work become better, healthier, and more prosperous. Each year, Hannaford donates about $4 million in charitable donations and sponsorships within the communities we serve. With the help of customers and associates, Hannaford also raises hundreds of thousands of dol-lars through in-store fundraising programs. These funds go to community health programs and programs dedicated to families and children. Every year, Hannaford gives millions of pounds of groceries to hunger-relief programs, through regional food banks and donations to soup kitchens and food pantries.25 Consumerism
Consumerism involves the activities of government, business, and other organizations to protect people from practices infringing upon their rights as consumers. These actions rec-ognize that consumers have basic rights that should be safeguarded. As President Kennedy said nearly 50 years ago, consumers have the right to safety (protection against unsafe conditions and hazardous goods and services), the right to be informed (protection against fraudulent, deceptive, and incomplete information, advertising, and labeling), the right to choose (access to a variety of goods, services, and retailers), and the right to be heard (consumer feedback, both positive and negative, to the firm and to government agencies).
Retailers and their channel partners need to avoid business practices violating these rights and to do all they can to understand and protect them. These are some reasons:
䉴 Some retail practices are covered by legislation. One major law is the Americans with Disabilities Act (ADA), which mandates that persons with disabilities be given appropriate access to retailing facilities. As Title III of the Act states: “Public accom-modations [retail stores] must comply with basic nondiscrimination requirements that prohibit exclusion, segregation, and unequal treatment. They also must comply with specific requirements related to architectural standards for new and altered buildings; reasonable modifications to policies, practices, and procedures; effective communication with people with hearing, vision, or speech disabilities; and other access requirements. Additionally, public accommodations must remove barriers in
Are Retailer Loyalty Programs in Sync with Their Customers?
Even though a large proportion of retailers have loyalty pro-grams, many firms neglect to concentrate on the natural loyalty that is generated by treating their customers well.
According to some analysts, a loyalty program that offers free merchandise at the expense of old-fashioned excellent service may backfire. Retailers also need to rethink the notion that their regular customers are loyal, when they may shop there only because the store locations are convenient.
Fred Reichheld, an expert on loyalty programs, believes that there are four basic behaviors of loyal customers: They come back for more, they increase their purchases, they bring their friends, and they invest their precious time for free. Thus, retailers need to distinguish between artificial and genuine loyalty.
There several ethical issues to keep in mind with regard to loyalty programs. For example, some institutions—such as airlines and hotels—have awarded so many free miles or points that it is extremely difficult to use the earned credits during the times requested or on a direct flight. This is especially true for popular destinations dur-ing peak periods. Most airlines have also increased their mileage requirements or discontinue members’ total mileage credits if an account is inactive for a given time period.
Sources: Joan S. Adams, “The Do’s and Don’ts of Loyalty Programs,”
Supply House Times (May 2008), pp. 24, 26; and Steve McKee, “The Problem with Loyalty Programs,” www.businessweek.com/
smallbiz/content (August 14, 2008).
ISBN 0-558-55519-5
existing buildings where it is easy to do so without much difficulty or expense, given the public accommodation’s resources.” ADA affects entrances, vertical transporta-tion, width of aisles, and store displays.26See Figure 2-12.
䉴 People are more apt to patronize firms perceived as customer-oriented and not to shop with ones seen as “greedy.”
䉴 Consumers are more knowledgeable, price-conscious, and selective than in the past.
䉴 Large retailers may be viewed as indifferent to consumers. They may not provide enough personal attention for shoppers or may have inadequate control over employees.
䉴 For some shoppers, the increasing use of self-service causes frustration.
䉴 Innovative technology is unsettling to many consumers, who must learn new shop-ping behavior (such as how to use electronic video kiosks).
䉴 Retailers are in direct customer contact, so they are often blamed for and asked to resolve problems caused by manufacturers (such as defective products).
One troublesome issue for consumers involves how retailers handle customer privacy.
A consumer-oriented approach, comprising these elements, can reduce negative shopper feelings: (1) Notice—“A company should provide consumers with a clear and conspicuous notice regarding its information practices.” (2) Consumer choice—“A company should pro-vide consumers with an opportunity to decide whether it may disclose personal information about them to unaffiliated third parties.” (3) Access and correction—“Companies should provide consumers with an opportunity to access and correct personal information that they have collected about the consumers.” (4) Security—“Companies should adopt reasonable security measures to protect the privacy of personal information.” (5) Enforcement—“The firm should have in place a system by which it can enforce its privacy policy.”27
To avoid customer relations problems, many retailers have devised programs to pro-tect consumer rights without waiting for government or consumer pressure to do so. Here are examples.
For almost 100 years, J.C. Penney has adhered to the general principles of the
“Penney Idea”:
To serve the public, as nearly as we can, to its complete satisfaction; to expect for the service we render a fair remuneration and not all the profit the traffic will bear; to do all in our power to pack the customer dollar with value, quality, and satisfaction; to continue training ourselves and our associates so the service we give will be more intelligently performed; to improve constantly the human factor in our business; to reward men and women in our firm by participation in what the business produces; and to test our every policy, method, and act—
“Does it square with what is right and just?”28 FIGURE 2-12
Understanding the
Americans with Disabilities Act
ISBN 0-558-55519-5
FIGURE 2-13
Voluntary Product Testing at Target Stores
Source: Reprinted by permission of Target Stores.
Target’s Responsibility
At Target, toys are an important part of our business. We want the toys you buy to meet Target’s and the U.S. Government’s high standards of quality, value, and safety.
Therefore, we abide by all U.S. Consumer Product Safety Regulations. Target also utilizes an independent testing agency. They test samples of all toys we sell to help ensure your child’s safe play.
All toys sold at Target are tested to be certain they are free from these dangers:
Broken toys can expose dangerous points.
Stuffed toys can have barbed eyes or wired limbs that can cut.
Electrical shock
Wrong toys for the wrong age
Toys that may be safe for older children can be dangerous when played with by little ones.
Propelled objects
Projectiles and similar flying toys can injure eyes in particular. Arrows or darts should have protective soft tips.
Electrically operated toys that are improperly constructed can shock or cause burns. Electric toys must meet mandatory safety requirements.
Noise-making guns and other toys can produce sounds at noise levels that can damage hearing.
Small parts
Tiny toys and toys with removable parts can be swallowed or lodged in child’s windpipe, ears, or nose.
Sharp edges
Toys of brittle plastic or glass can be broken to expose cutting edges.
Poorly made metal or wood toys may have sharp edges.
BANG! Loud noises
Sharp points
About 40 years ago, the Giant Food supermarket chain devised a consumer bill of rights (based on President Kennedy’s), which it still follows today: (1) Right to safety—Giant’s product safety standards, such as age-labeling toys, go beyond those required by the government. (2) Right to be informed—Giant has a detailed labeling system. (3) Right to choose—Consumers who want to purchase possibly harmful or hazardous products (such as foods with additives) can do so. (4) Right to be heard—A continuing dialog with reputable consumer groups is in place.
(5) Right to redress—There is a money-back guarantee policy on products.
(6) Right to service—Customers should receive good in-store service.29
A number of retailers have enacted their own programs to test merchandise for such attributes as value, quality, misrepresentation of contents, safety, and durability. Sears, Wal-Mart, A&P, Macy’s, and Target are just a few of those doing testing. See Figure 2-13.
Among the other consumerism activities undertaken by many retailers are setting clear procedures for handling customer complaints, sponsoring consumer education programs, and training personnel to interact properly with customers.
Consumer-oriented activities are not limited to large chains; small firms can also be involved. A local toy store can separate toys by age group. A grocery store can set up dis-plays featuring environmentally safe detergents. A neighborhood restaurant can cook foods in low-fat vegetable oil. A sporting goods store can give a money-back guarantee on exercise equipment, so people can try it at home.
ISBN 0-558-55519-5