When the going gets tough, the tough get transparent

Source: Rothy's
May 21, 2019
Allison McGuire

The sustainable shoe e-tailer, Rothy’s, recently started a marketing campaign to launch a new shoe design. Rothy’s sent out a teaser email and a vague Instagram post that had customers buzzing and pledging their readiness to make their next shoe purchase.

On the day of the big launch, however, Rothy’s sent out an “Ouch” email sharing they had made the tough decision to cancel the launch due to production quality. The company even allowed itself a humble brag that it took pride in “making the right decision — even when it’s really hard.”

Rothy’s, which surpassed Tod’s $88 million in sales in North America in 2018, is obviously still suffering growing pains within the organization. It seems unimaginable to start a marketing campaign three days before a product launch and not be 100 percent secure that your product is ready for market.

Everyone deals with setbacks and crisis management. Think about the recent news blunders with Uber, AirBnB, and even KFC. I think what sets all these stories apart from damage control done in years past is that honesty and change are now a requirement in the aftermath.

Most Millennials say they care more about what a company stands for than their latest advertising gimmick. No business is perfect, and while we try to do our best, mistakes happen. And now it seems, we can be easily forgiven with a heartfelt apology and a roadmap for change.

These examples represent companies that have great PR agencies to help them navigate the recovery process, but there are still many businesses going the old school route by remaining silent. In the age of social media and instant communication, a business that wants to sustain its growth must be transparent with their customers, even during the tough times.

DISCUSSION QUESTIONS: Are you seeing a change in how companies deal with crisis management? Is the new trend towards truthfulness and transparency the best way to handle crisis management issues or is there another process that is more effective?

Please practice The RetailWire Golden Rule when submitting your comments.
"Successful retailers must be honest and transparent to win today’s consumer. "
"My grandmother always told me as a child that the truth will always come out one way or another."
"Now that customers have access to information from almost unlimited sources, it is imperative that brands and retailers commit to transparency. "

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13 Comments on "When the going gets tough, the tough get transparent"

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Art Suriano

Unfortunately, today companies have become so large they have numerous communication breakdowns with one department not staying in touch with other departments. In the case of Rothy’s the marketing campaign will be remembered as an “oops” but that doesn’t help fix the problem. The company needs to examine what went wrong and to prevent it from happening again. However too many companies today just move on, continuing the same practices with the right hand not talking to the left hand, and that only causes more problems. Today we have too much movement at the top at many companies, and that also creates issues such as long-term growth getting interrupted as new leadership comes in and changes course.

The solution is that companies today need more stability, better communication between leaders and their departments and strategic plans that remain in place no matter who takes over. Then in time, changes should be made as needed and not merely because they are wanted.

Phil Masiello

I think customers are well aware that mistakes happen. It is how a company deals with the mistake that reinforces trust. Truthfulness and transparency are always the best way. Let customers know what happened, why it happened and what you are doing about it. However, I would refrain from patting oneself on the back for doing the right thing. It should be expected.

Cathy Hotka

Now that customers have access to information from almost unlimited sources, it is imperative that brands and retailers commit to transparency. Rothy’s customers (including the Duchess of Sussex) are loyal, and will appreciate the company’s forthrightness.

Bethany Allee

Exactly right, Cathy. There’s no point in not being honest and the Rothy’s following is extremely loyal. Being a brand with humility is part of their attraction, this move is in alignment with their brand.

Georganne Bender

I think Rothy’s did the right thing in handling this situation. Sure, it would have been better to have the product ready before moving forward with a marketing campaign, but that didn’t happen.

With social media being what it is, companies have no other choice than to come clean. When a company remains silent people come to their own not-always-good conclusions, sharing and commenting all over online. That leads to the next step in crisis control. Transparency at the very beginning is critical to future success.

Brandon Rael

My grandmother always told me as a child that the truth will always come out one way or another. Trust and transparency are everything in today’s commerce world. Companies have to proactively inform, educate, and build the necessary trust with their customers in all aspects of their business.

This remains a fundamental way of doing business, especially in our relentlessly digitally connected world, where companies are now grilled on Twitter for any missteps. While all kinds of social media publicity may help, negative viral posts could be toxic.

Rothy’s was wise to proactively admit their mistakes, take a very transparent approach, and continue to commit to providing an outstanding customer experience.

Lee Kent

Absolutely! Successful retailers must be honest and transparent to win today’s consumer. Damage control after the fact still works too but it’s best to yank the product before the damage sets in. Mistakes do happen. For my 2 cents.

Rich Kizer

This is a no brainer. Stuff happens in all businesses that causes havoc. Honesty with customers? People will long forgive, and respect, any business that makes mistakes and blunders (when they are legitimate) and confesses apologetically. On the other side, try to pull the wool over customers’ eyes and you will lose big time. Even the best in business have times of sorrow and mistakes. Welcome to retail! Hats off to Rothy’s!

Cynthia Holcomb

Corporate perfection is a myth. If the IPOs of today can gain billion dollar valuations without earning a penny, engage workers into low wages resulting in strikes, while all the while selling off our personal data, Rothy’s is a standout! Imagine being transparent about a production problem. Public tolerance seems to be high for orchestrated (one eye shut) responses to massive breaches of personal information. Quite refreshing to see a crisis of production!

Ken Morris
Ken Morris
Retail industry thought leader
7 months 30 days ago

Being upfront, honest and quick is the only way to deal with a crisis such as what Rothy’s experienced. The longer a company waits to tell the whole truth the worse the repercussions. Transparency is the only truth here. Customers have many choices today. Why would they shop someone who is less than forthright? The communication needs to be quick, truthful and include a pledge to change the people, the process or the technology that created the crisis.

Sterling Hawkins

It’s always best to tell the truth in the long run. Although I don’t know how Rothy’s was so close to the launch before realizing quality was an issue, growing pains are natural. Consumers are ready, willing and understanding of things that don’t go as planned as long as we’re open and honest (and have a plan to make it better).

Craig Sundstrom

Like most people (who responded), I think the answer is (some degree of) “more transparent today,” but the question lacks context: companies are transparent because they have to be. Decades ago, we didn’t have twitter or a billion-and-one bloggers spreading information — and misinformation — and press releases went out only to a few members of the media. There just wasn’t that much to be “truthful” about. That’s just not true today … and I don’t think it ever will be again.

Shikha Jain

It goes back to your target consumer and what drives value for them. In the case of Rothy’s, differentiation is about comfort and being socially conscious through the recyclable and washable/durable aspect. There is likely a little bit of anti-big corporation sentiment for their target consumers. This also means that this target consumer cares about the straightforwardness and transparency which Rothy’s handled well. Like so many comments below have noted, consumers are more willing to forgive companies that own up to their mistakes. There are so many brands that have messed up in much bigger ways and recovered without a hitch — think Pepsi 2017. Think about all the food that gets recalled or baby products that are recalled. While it is unfortunate, it is usually not the end of a brand and the hope is that they learn every time.

"Successful retailers must be honest and transparent to win today’s consumer. "
"My grandmother always told me as a child that the truth will always come out one way or another."
"Now that customers have access to information from almost unlimited sources, it is imperative that brands and retailers commit to transparency. "

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