The retail sector has faced unprecedented change in recent years and although the latest ONS data pointed to continued growth in the online channel, it’s clear that the internet offers not only just huge opportunities for retailers, but significant threats when it comes to reputation management.
A strong brand is arguably a retailer’s best asset and if it is very strong, it can provide a powerful competitive advantage. If it isn’t protected properly, or taken for granted, brand equity can quickly fall and an organisation can, as a result, quickly lose customers and market share.
A clear and recent example of both the impact that the internet can have in this area, as well as the importance for organisations (big and small) to live their values, is Wayfair.
US staff at Wayfair, the online furniture retailer, walked out because they discovered the company had sold furniture to detention centres on the US-Mexico border.
In today’s social media-driven world, businesses have to be very careful not only how they communicate to the outside world, but they also need to make sure that they have all of their ducks in a row internally as well.
Ten years ago, this kind of story may never have seen the light of day. The employees may have signed a petition (or maybe not), but with social media reigning, employees, customers, distributors and the market at large have a very loud and important voice.
Companies that build a brand have to live the values of that brand. It’s trite, but it’s very true that building a brand can take years and damaging it can take just seconds.
The moral of the story is that businesses must know the worth of their brand, and their core values, and make sure they live and breathe these values.
Your brand and reputation are invaluable so don’t forget about the importance of them in the quest for profits, as you may see your profits fall as a result.
If something happens that has the potential to damage your reputation, don’t ignore it and take positive action.
Being the subject of defamatory comments is an example of how a reputation can be quickly damaged and if a disgruntled customer, competitor or supplier has defamed your company online, there will be a long list of things that will need to be done.
One of the first things that you will want to do is remove the online content. It can be done but it’s not always straightforward, especially if you have a defendant that is not playing ball. It’s sometimes possible to make the ISP and website operators responsible for defamatory publications online so going to the publisher direct can be the best way to remove content, that is truly defamatory, and limit damage.
Prompt action is vital if this happens. It might sound obvious but the quicker lawyers are on board, the more effective the action they may be able to take.
As the business, you can also take your own immediate action, particularly in relation to gathering the evidence – If you’re dealing with adverse or defamatory comments online, make sure that you screen shot the posts including the date of publication. If you want to take legal action we’ll need the evidence.
Pick your battles though and coolly assess what real damage could actually be caused, and whether it’s worth taking action.
If your reputation is being attacked because your organisation has done something wrong, show what you are doing to rectify the situation. You will need to show that you understand the gravity of the situation and it may be necessary to apologise for what has happened.
Despite what some people may think, lawyers don’t always say no to saying sorry. In fact those that work in the reputation management space know that it can be effective if the risks of doing so – or not doing so have been fully weighed up.
Sometimes it is an organisation’s employees who spot a crisis first and then worry about the effect the content may have on them.
Provide clear guidance about what to do, what not to do, and work on effective internal messaging in a crisis. This process can be time-consuming and the trust required will not be built overnight. My advice if you haven’t done so already, start this work straight away.
Being prepared is crucial and it is vital that online retailers have an up to date crisis plan. Rather than keeping it on a shelf, test it regularly and make sure employees are fully aware of their obligations.
A crisis plan is something that many businesses don’t have, but it’s something that they should have to ensure they are fully equipped to deal with a crisis (of pretty much any nature) when it arises.
One thing that I’ve learnt over the years is that, if a crisis hits, there’s very little time to decide who is responsible for making decisions, who needs to be in the meetings and where the passwords are for the social media accounts. By the time all of that’s been decided you’re into damage control, rather than managing a situation.
Therefore, put a written plan into action and make sure that all of the key people know where it is. Ensure that the plan includes:
- Who’s on the crisis team (HR, IT, your MD or your FD – or both, in house legal (or external legal) and is their contact information up to date?
- Who are the decision makers?
- Who needs to be kept up to date about how the crisis is being managed i.e. employees, customers, distributors, the general public?
- Make sure that your employees know who to contact in a crisis. They are often your first line of defence and if they flounder, then precious time has been lost.
- Who is in control of the social media accounts? Do you actually know? Who has the passwords? Make sure that the passwords are in the plan and the plan is kept up to date
- What are the company’s values and, bearing that in mind, what sort of tone does the company want to set when dealing with a problem? Make sure that’s decided when the sun is shining.
- Bearing in mind the tone that is being set, who do you want to be your spokesperson? Perhaps there should be a few people lined up for that job, depending upon the situation? Are they trained?
- Identify certain scenarios that may occur in advance. The simple task of running through what may happen will make the situation feel less overwhelming when it does happen.
The internet offers retailers huge growth opportunities, along with the possibility to build a really strong brand.
At the same time, it has the potential to damage brands and in order to ensure that you’re properly prepared, make sure you have a fully tested crisis plan and the support of specialist reputation management lawyers who understand the retail sector and can help management teams take the right decisions at the right time.
Emma Yates is a specialist lawyer in the reputation management and IP team at Irwin Mitchell
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Author image courtesy of Emma Yates/Irwin Mitchell