The slapstick gymnastics by Coles on the plastic bag ban will harm the reputation of the company more than most other crises, including food contamination.
With salmonella outbreaks, customers understand that the problem is usually at the source, sometimes many thousands of kilometres away. The Coles plastic bag fiasco is all its own work.
The triple somersault with cartwheel and pike has left customers confused and bewildered. Anti-waste groups will forever question the authenticity of Coles’ self-proclaimed green credentials.
And activists will be emboldened to use social media to pressure Coles on everything from Australian-made to the political values of certain food suppliers.
The supermarket chain’s initial idea to ban plastic bags was a smart PR move before formal bans by the Victorian and NSW governments. But from there, it was all downhill for Coles.
No companies do more market research on consumer preferences and how to influence them than big retailers like supermarket chains.
Such research determines product placement, shelf height and even the type of background music played in certain areas. In the biggest retail business of all, a slight shift in consumer habits can mean millions to the bottom line.
The Coles plastic bag disaster is an abject failure of consumer research. It is difficult to imagine a more damaging thing to say about a supermarket chain.
When the plan to phase out plastic bags was announced, Woolworths gave their customers much more effective notice than Coles, using prominent point-of-sale notices weeks in advance. Many customers were bringing in their own bags well in advance of the reusable plastic bag ban.
Coles customers were not prepared, not ready and not happy, Jan, when the ban was introduced on July 1, and they were told they would have to pay 15 cents for thicker, re-usable bags.
So then it gave the thicker bags away for free in four states to give customers time to adjust.
The free bags were set to stop on Wednesday, but then Coles announced it would continue to offer free bags indefinitely. And then (are you still with us?) yesterday, Coles said the free bags would end on August 29.
So for the next four weeks, Coles is handing out heavy plastic bags said by green groups to be even worse for the environment than the single-use bags because they break down more slowly, and Coles is providing a disincentive for re-use by giving them away for nothing.
This is what is known as reputational no-man’s land, a twilight zone where nobody is happy.
Sixty years ago, President Kennedy stated incorrectly that the Chinese word for crisis is made up of two characters – threat and opportunity. Over six decades, the statement has become a business meme to illustrate how a great company can use a crisis as an opportunity to emerge even stronger. That is, if they handle the crisis superbly, doing everything a reasonable person would expect – and then some.
Coles could begin by admitting how badly it stuffed up and then perhaps start distributing carrots in the form of cash discounts at the register for 12 months for people who bring their own bags. That should help get them into the habit. Coles could use the savings it will make from stopping production of plastic bags.
And one more thing: another PR misstep by Coles managing director John Durkan was using the most cringeworthy cliché of the year this week when he said putting customers first “is in our DNA”.
Apart from the gross overuse of the term, it should be remembered that DNA is capable of grotesque mutations.
Michael Smith is a former editor of The Age and CEO of Inside Public Relations, which specialises in management of issues, crises and reputations