GUEST COMMENT Avoid slipping supply chain standards when facing peak trading periods
The festive period is long gone and retailers breathed a collective sigh of relief in January having successfully navigated one of the busiest stretches in the retail calendar. But the year is full of other spending peaks such as Halloween, Christmas and Easter: together these offer both a major challenge and a major opportunity. The spike in consumer demand puts a strain on resources and infrastructure, but also represents a chance to make hay while the sun shines.
In the rush to meet this demand, supply chains are often put under huge amounts of pressure and the chances of standards slipping increase. Globalisation has allowed supply chains to become longer, with a greater geographical spread, but equally more difficult to manage and communicate across. Consequently, quality assurance can be neglected in the rush to get goods to stores, allowing a batch of less-than-perfect products to slip through the net.
During the festive season a particular area for concern in this regard is toys, as retailers increase their stock capacity to make sure children (and their parents!) aren’t disappointed come Christmas morning. With child safety so prominent, and constantly hitting the headlines, it should come as little surprise that toys are the most common consumer good subject to recalls and safety notifications in Europe.
The Stericycle European Recall and Notification Index examines trends in this area by analysing data from the official European recall bodies RAPEX and RASFF. Figures from 2014 show that toys top the list, making up 33% of all consumer notifications in the third quarter. One reason for this is the increasing complexity of supply chains, facilitated by the globalisation of commerce. Another factor in this is the new toy regulations passed by the EU in 2011 and rolled out over the subsequent years, which expanded the definition around toys and harmonised safety procedures.
At Easter there have been concerns around the recall of confectionery products. In 2013 a high profile UK confectionery brand was forced to recall thousands of chocolate bars and Easter eggs during the peak selling period due to concerns about plastic found in the sweets following an incident in the factory.
Consumers may baulk at the high number of consumer products being recalled, but it is, in fact, symptomatic of a more safety-conscious society and awareness on the part of manufacturers that they need to be more proactive when dealing with potential dangers, especially when children are involved. Where previously, toy and sweet hazards might only have come to light in the wake of a tragedy, businesses today are aware that consumers expect more thorough investigation of products and speedier recall processes to get affected products off the shelves.
The internet has been a powerful tool in affecting this sea change. With more consumer choice than ever before, thanks to the power of the search engine, brand loyalty isn’t as strong as it once was. Also, the power of social media means that the mistakes companies make can be very publicly exposed to the world at large, as many scandal-struck companies have found to their detriment in recent times. Most businesses caught in the middle of a Twitter storm will tell you that it takes a lot less time to ruin your reputation than it does to build it.
But by being proactive and initiating voluntary recalls, businesses can avoid a lot of the negativity associated with the process. As demonstrated by a number of successful manufacturers and retailers, those that handle a recall successfully have the opportunity to both enhance their brand as well as protect it. When businesses voluntarily recall a product, they are demonstrating that customer safety is their top priority and highlighting that clear and transparent communication with customers is the key to resolving difficult recall situations. A successful recall can actually create an opportunity for a retailer or manufacturer to build a dialogue with customers and strengthen the brand.
Companies must begin to view a recall as a positive opportunity to engage with customers and provide great service, rather than as a negative situation that needs to be suppressed. People will forgive mistakes, so long as they’re dealt with in the right way. Things can and will go wrong, but it’s the response to and remediation of the recall event which can make or break a brand. Farzad Henareh is European vice president at Stericycle ExpertSOLUTIONS