Fri, April 12, 2024

The Cost of Cutting Corners

 

Don MacNeil is the former Marketing Director of Windsor Jewelers and long-time on-air radio professional.

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Is it just me, or…

The Cost of Cutting Corners

Have you had groceries delivered to your home lately? If you have, have you also come to the conclusion that home delivery – especially to the house-bound – has become a dumping ground for expired, near-expired and damaged goods?

When free grocery delivery suddenly swept the supermarket industry not long ago, I immediately imagined a CEO rolling his eyes when first advised that they now had to offer this. Nightmare…in an industry already operating on razor-thin margins.

What happened next is pure conjecture, but the evidence is widespread and compelling. Either in the highest company suites or down at store level, an upside to delivery became obvious: pass on past-prime product to delivery customers on the bet that recipients will accept what’s delivered with minimal protest. Grocery-worker substitutions – when specific requests weren’t in stock – provided a further way to keep the final tab up.

And this passing on of defective goods has not been confined to food.

Internet search this phenomenon and you’ll notice that Amazon is having the same problem with a large percentage of its third-party vendors. How would you ever police such practices among your thousands of sellers if you’re Jeff Bezos?

By hiring an army of checkers using a combination of artificial intelligence and manual processes to monitor over 20 million pieces of customer feedback received weekly, using the threat of vendor de-listing to ensure compliance. Grocery companies, vulnerable to being sued, have, until the proliferation of home delivery, been fairly good about keeping product fresh.

The legal ramifications? Apart from dairy products and baby food, there are stunningly few regulations regarding the sale of past-dated produce, and none regarding damaged non-food items beyond the usual return policies. In fact, these “Use by” kill dates, which we all have assumed were science-based are actually wholly subjective, company-invented shelf-life guesses calculated to both reassure us and guarantee product turnover.

A recent survey revealed a 78% rate of dissatisfaction with the grocery product being delivered. That’s a business model that isn’t working. What struck me in researching this was the litany of wide-eyed, naïve testimonials wondering why this was happening. Only a few pointed out that it was occurring at far too high a rate to be accidental.

How is this a cautionary tale for you? Every business harbors an array of ways to cost-cut at the expense of customer experience. When your performance – no matter what you do – falls short of expectation, it damages your customer’s faith in your brand and the work you put into building that reputation. No amount of happy-faced advertising on your part is going to reverse the simmering resentment you may be leaving in your community.

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