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The day that Sephora closed all its stores

The world of fashion has become especially sensitive to discriminatory events. From that mishap suffered by the presenter Oprah Winfrey in the Trois Pommes store in Switzerland in 2013, to the sayings that caused the cancellation of the Dolce & Gabbana show in China in recent months.

However, the conglomerate Moët Hennessy Louis Vuitton LVMH has been characterized by supporting diversity in this world of such rigid standards, such as the fashion and luxury sector. “Beauty is diverse and it has many voices and faces,” Sephora’s vice president of marketing, Deborah Ye, said a few years ago.

For this reason, it was surprising that at a Sephora store (a brand that belongs to LVMH) in Calabazas, California, the R & B singer known as SZA was subject to a discriminatory act. The singer said that a store clerk had called security to make sure she was not stealing.

After the event was announced, the company announced that a one-hour workshop on diversity would be given to its 16,000 employees. In the United States alone, Sephora has 10,000 employees, which makes it one of the largest companies that temporarily closes to perform diversity training. However, these types of maneuvers are not new, Starbucks did the same in May 2018 after a similar incident in one of its branches in Philadelphia.

It is worth highlighting two elements of this situation. On the one hand, the complexity of all the people that make up a company know and are trained in the values ​​of the company itself. The companies do not usually give it the importance that it requires that all the organic structure know and act according to the values ​​on which the company was founded. Cases in which workers who are in direct contact with customers are responsible for discriminatory acts are increasingly sound, but this is due to the lack of training in what values ​​represent brands and how to act accordingly.

On the other hand, it is worth asking if a training, whether a day or an hour, are enough to raise awareness among workers about such complicated aspects not only to explain, but to internalize, such as diversity. A one-hour training, on the same day, to all workers, announced through a press release, seems more like a marketing strategy than taking a real commitment against discrimination.

Brands must be aware that information technologies give consumers a lot of power by making companies vulnerable. That is, years ago, an act of discrimination could be ignored, worse today social networks return these viral acts. This inevitably harms the reputation of brands. Thus, brands must commit to true training, not only in the values ​​of their companies, but what those values ​​mean in daily work, whether they are in contact with the public or not. Only in this way can an appropriate crisis management strategy be carried out.

Unfair Competition? The Peñafiel Case

An investigation prepared by Consumer Reports, which analyzed 130 brands of bottled water marketed in the United States, revealed that at least six brands were above the arsenic limit recommended for human consumption. One of the brands on this list was the company of Mexican origin Peñafiel.

The research pointed out that Peñafiel mineral water contains an average of 18.1ppb of arsenic when the recommended limit is 10 ppb. It is known that prolonged exposure to arsenic is directly associated with conditions such as high blood pressure, skin disorders, diabetes and cancer risks.

Keurig Dr. Pepper, the company that owns the brand, sent a statement announcing the temporary suspension of production at its plants in Tehuacán, Puebla, and Tlajomulco, Jalisco, which is where the production that goes to the US market comes from. In addition, he informed that the installation of new filtering systems was being completed to reduce the amount of arsenic in the drink.

Faced with this situation, the Federal Consumer Protection Agency (Profeco) and the Federal Commission for Protection against Sanitary Risks (Cofepris) carried out visits to Peñafiel plants with the intention of determining if the product in Mexico is healthy for consumers. The results were favorable for Peñafiel. The Profeco indicated that, after making the corresponding tests, they concluded that the Peñafiel mineral water meets the standards stipulated in NOM-201-SSA1-2015 for commercialization.

Thus, on May 1, the Peñafiel factory in Puebla returned to normal operations. The company trusts that what happened will be overcome soon. Currently, on its website you can read the following: ” In Grupo Peñafiel we want to reiterate that our main priority is to provide products of the highest quality to each of our consumers. Therefore, we refer to the subject that has been commented in the media about the levels of arsenic contained in mineral water “ followed by the results of the studies carried out in their production plants.

On the other hand, the federal attorney of the consumer, Ricardo Sheffield, commented that it is probable that this situation has originated due to the particular interests of some of the sponsors of Consumer Reports since the arsenic exists of natural form in the water and in other products. In this sense, the Food and Drug Administration (FDA) of the United States did not issue any opinion regarding the product of the Peñafiel brand, so, the prosecutor concludes, it is likely that it was derived from a commercial ploy by the party. of the American competitors.

No figures have been revealed regarding the effects that Peñafiel suffered with these incidents, but it must be recognized that the effective and fast management by the directors helped to prevent this crisis from spreading.

GREENPEACE VS KIT-KAT

In 2010, Greenpeace uploaded a video to Youtube that shows an office worker opening a chocolate package Kit-Kat, from which comes an orangutan finger and begins to eat while blood stains. Its purpose was to generate awareness in the consumer about the death of orangutans caused by the felling of trees for the extraction of palm oil, one of the necessary ingredients for the manufacture of chocolate bars. As part of the campaign, the NGO also denounced Sinar Mas, the then-leading supplier of Nestlé palm oil.
The campaign went viral and Nestlé opted to ask Youtube to withdraw the video, arguing copyright infringement for the use of the chocolate logo, but by the time the video was removed, it had already gone viral. At the same time, they issued a statement denying their relationship with Sinar Mas. Both actions caused Greenpeace to start another campaign, but this time requesting a boycott against all Nestlé products. Thus, Greenpeace began to circulate the video again, but now on alternative platforms to YouTube, in addition to publishing Kit-Kat logos rewritten with the word “Killer” and images of orangutans.
Despite the fact that the censorship strategy against Greenpeace was not well received by consumers, Nestlé continued with the same strategy, threatening – for example – to block Facebook users who continued to make negative publications towards the brand. Afterwards, he asked that users who did not agree with it stop following the Kit-Kat page on Facebook and began to eliminate negative comments. Being social networks a means that can give companies the opportunity to create a more personal link with consumers, it also means a risk since it allows users to maintain greater vigilance over the actions of a company and that they can not simply censor.
Due to the elimination of comments, many users created accounts with the sole purpose of continuing to disparage Kit-Kat. In response, Kit-Kat took a confrontational attitude with users, raising a lot of controversy about how the company answered its consumers. The damage to the reputation of Kit-Kat was greater since the users evidenced the inattentive answers of the company, in addition to the environmental issue that caused the crisis initially.
Eventually, Kit-Kat gave in to the pressure. That is why, in 2013, Nestlé released a statement in which it set a series of environmental objectives to meet before 2020, among which was the use of sustainable palm oil. It is not the first time that a company is affected by GreenPeace activism, for example, in 2014 when Greenpeace launched a campaign against Lego for the trade agreements it had with Shell. Brands should not forget that social networks have made companies more vulnerable by becoming the means by which users ask them to be held accountable for their actions in an organized manner.

Do you think your company may be vulnerable to social media activism? Contact us to make a damage control and containment plan, you can write us at info@riesgospoliticos.com.mx.

 

Photo by Abi Schreider on Unsplash

AIR EUROPE, A DISCRIMINATION CRISIS?

In 2013, a Spanish airline known as Air Europa had an incident with a wheelchair passenger after denying access for not carrying a passenger. The passenger Mara Zabala, of Spanish origin, complained to the employees of the airline for not allowing her to board the plane. The employees of the airline argued that, due to security policy, it was necessary for the passenger to have a companion who could assist her in case of an emergency.
Zabala, who by the way is an expert in social communication, used Twitter to denounce the company that forbade her to travel unaccompanied when other companies do. Under the hashtags “#denuncia #discapacidad #denuncia”, in a short time reached thousands of retweets, so the message of denunciation quickly gained popularity.
The tweet generated many criticisms of the company not only for denying the service to Zabala – when she had previously traveled alone with Air Europa – but also for not having facilities for people with reduced mobility that other airlines offered. The mistake of Air Europa was to ignore the damage to its image that comments on social networks were causing. The company chose to ignore the incident. The most he did was to reiterate to Zabala what his internal policy stipulated about passengers in need of additional assistance. In the absence of a communication strategy focused on mitigating the crisis, comments on social networks continued to escalate. Eventually, a problem in customer service escalated to touch a much larger issue: that of discrimination.
The problem escalated to attract the attention of Spanish legislators and, eventually, the European Commission. The Popular Party of Spain asked Air Europa to hold a meeting to discuss the incident. Given the refusal of Air Europa, the Spanish Popular Party presented the case to the European Commission through the Group of the European People’s Party.
Soon, the European Commission published a report on current legislation that allows airlines to request a passenger in a wheelchair to travel with a companion. The report stated that the legislation helps airlines benefit from forcing users with disabilities to buy another plane ticket. Based on this report, Zabala appealed to various organizations for the protection of persons with disabilities, stating that the legislation is clearly discriminatory. One of these bodies, the Spanish Committee of Representatives of Persons with Disabilities, demanded that Air Europa change its internal policy on its own initiative, since the current regulation does not guarantee them. For its part, the European Commission announced that the regulation of airlines in terms of security would be reviewed in order to address problems such as Zabala, but to date there have been no changes.
The case of Air Europa demonstrates that the omission of a problem is a problem in itself, sometimes just as damaging to reputation as making an equivocal decision about it. Starting with a tweet, the magnitude of the crisis escalated to reach the halls of national and supranational governmental instances. A strategy of silence before the problem contributed to increase the crisis since, for many users, it seemed that the company was not doing anything to solve the problem.

Do you have doubts about how to handle reputation crises? Write to info@riesgospoliticos.com.mx to provide you with the advice you need.

 

 

Photo by Doug Maloney on Unsplash

EXXONMOBIL, LESSONS TO TAKE ADVANTAGE OF THE CRISIS

Since the Energy Reform of 2013, the oil sector in Mexico has been opened to private investment, both domestic and foreign. One advantage that this reform presents to investors is that of logistics. Companies can sublease Mexican pipelines – which saves them considerable transportation costs – and Pemex, in turn, gets a steady stream of revenue.

Thanks to this scheme, the large foreign oil companies have managed to occupy 30% of the hydrocarbon market in Mexico. However, according to a Forbes report, 95% of them directly buy Pemex oil products that, once processed, trade and sell directly to users. However, if a company depends on Pemex’s infrastructure for its own operations, it also absorbs its risks. Anticipating this situation, ExxonMobil decided to invest in its own logistics network, hire independent carriers and import fuel extracted from the United States. Thus, it is clear that a central part of ExxonMobil’s strategy in Mexico is not to depend on Pemex’s infrastructure, which adds value to its services.

ExxonMobil transports fuel via train from Texas to El Bajío. In this region the fuel is stored since that is where most of its gas stations are located. Subsequently, it is distributed to each locality through independent transporters. In addition, Exxon plans to diversify its supply network by sea instead of increasing ground transportation.

It is worth noting that a fundamental part of ExxonMobil’s business strategy in Mexico is the Demand Response Team, whose mission is to manage risks in the country and mitigate problems arising from Pemex’s operations. Thus, the Demand Response Team was created to deal mediately and operationally with the damages of a crisis, but strategies were also proposed to mitigate the damage in anticipation of a crisis. This team is part of the risk unit of the oil company called Operations Integrity Management System and was essential to overcome the crisis that caused the closing of pipelines of Pemex for the combat the ” huachicoleo “.

This risk management group is made up of 40 people, with operations in both Mexico and the United States and, in this case, had the task of addressing the interruption in the supply of fuel in Mexico as quickly as possible. Thanks to crisis mitigation strategies and the fuel logistics network sold by ExxonMobil stations in Mexico, the oil company increased its sales in the Bajío, a region in which most Pemex-dependent gas stations ran out of fuel.
Before the shortage, ExxonMobil moved to its Bajío storage centers enough inventory to continue operations for 20 days. In the same region, Pemex only had inventory for less than three days.

During the shortage, one of the gas stations of ExxonMobil published a tweet that said the following: “Shortage? In Mobil stations we do not have that problem, “with an image of a pipe filling the gas station. Given the sense of panic in the general population, this type of communication favored that various media presented to ExxonMobil under headlines such as: “The company that is saving Guanajuato from cases of shortage” or “Keeps Exxon constant supply”, which positioned the mark remaining in the mind of the users who did not find fuel in the stations of the competition.

Do you need help to organize a risk unit in your company? We help you, write to info@riesgospoliticos.com.mx .