Tag Archive | "Aftermarket business"

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THE LEGAL PITFALLS OF DISCOUNT MARKETING


Discounts aren’t just for the high street – but should be treated with care

In early 2019 the owner of jeweller H Samuel was fined for providing misleading pricing information online. The case highlights what retailers can do when it comes to posting prices and promotions in light of a new national and international drive towards the enforcement of consumer protection laws.

Torfaen County Borough Council’s trading standards team pursued a prosecution over the ‘misleading pricing’ of a range of diamond rings on the H Samuel website. The charges related to the practice of using reference price promotions, where retailers show consumers a higher price at which the item has been offered for sale.

H Samuel’s website had failed to inform consumers that items had previously been offered at lower ‘intervening’ prices, so they were unaware whether they were receiving a genuine bargain. Signet Trading, the owner of H Samuel, cooperated with the council’s investigation and pleaded guilty to what the judge accepted were system failings as opposed to deliberate attempts to mislead customers. Whilst credit was given for that, H Samuel was fined £60,000 in respect of the sale of rings (which had brought in £6,500) and was ordered to pay the council’s costs of £13,382.

It’s clear from this case that retailers must be very careful with reference pricing not to mislead customers into thinking they are getting a good deal.

THE LAW

The Consumer Protection Regulations prohibit businesses from engaging in unfair commercial practices such as giving false or misleading information or exerting undue pressure on consumers. You should take time to read the entire 31-item schedule.

Crucially, consumers are not only people who actually buy from a business – they also include prospective customers, so anyone who saw the promotion in an advert or the shop window could complain.

The consumer rules require businesses to be proactive. They impose a duty to disclose material information that a consumer needs to make an informed decision. A common trap for the unwary is that liability for misleading by omission cannot be avoided if the retailer does not know what it should know and has taken no reasonable steps to find out.

If a retailer faces prosecution, it may be able to raise a defence that the offence was committed because of a mistake or cause outside its control; but only if all reasonable precautions were taken to try to avoid the offence.

However, there is no defence if a retailer knowingly or recklessly allows its employees’ conduct to fall below honest and professionally diligent standards at any point.

PRACTICAL STEPS

There are, however, some practical steps that retailers can take to avoid consumer protection offences. Following these should also provide retailers with evidence to support a due diligence defence if any complaint, investigation or prosecution is brought.

Firstly, it’s important to provide training to all staff involved and retain evidence of that training.

Next, taking care that all information presented to customers (potential and actual) is accurate, fair, not deceptive or misleading. Having safeguards in place as to the accuracy and security of all such information is key. Policies, as in any other part of a business, are essential. It’ll help a retailer if it maintains a comprehensive audit trail of all these efforts.

THE FUTURE

Earlier this year, the European Commission called for online shopping websites to give customers clearer information about pricing and discounts after finding that some 60 percent of websites showed irregularities regarding compliance with consumer protection laws. This was particularly so in relation to the advertisement of pricing promotions, and the failure of traders to provide an easily accessible link to the ‘online dispute resolution’ platform which is required under law.

This area is definitely one to watch and retailers should note that this new focus on compliance with consumer protection laws is likely to result in increased scrutiny at a local, national and even international level, of their online and marketing practices.

Gwendoline Davies is a Partner in the Retail Group at Walker Morris LLP

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PEOPLE NEWS: JIM MAZZA JOINS PDP BUYING GROUP

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PEOPLE NEWS: JIM MAZZA JOINS PDP BUYING GROUP


Buying group Parts Distribution Partnership has announced that Jim Mazza will be joining the Group’s management team with immediate effect. Working with the members, he will assist in every aspect of the groups development.

Jim Mazza will be best known to CAT readers as the former Managing Director of AAG’s trading groups in the UK. Prior to that, he enjoyed a successful career at plumbing and builder’s merchant Wolseley UK.

PDP Chair, Alastair Whatmore commented: “With consolidation in the market showing little signs of slowing down, we recognise the need to change, to grow and to develop a group that is well positioned to take advantage of the opportunities that undoubtedly exist for independent motor factors and suppliers. Jim has an impressive track record in the automotive aftermarket and brings to our group a wealth of experience and buying group knowledge which will undoubtedly help us achieve our objectives”.

Jim Mazza added: “A decision to join the PDP team was not taken lightly and having spent some time looking at what the PDP does and its hopes and aspirations, I came away convinced that the group presents exciting prospects to grow and develop initially for the benefit of the existing membership, but ultimately for those motor factors looking for safe harbour in turbulent times”.

“PDP is undoubtedly a platform to build on, and I am looking forward with relish to working with the group, its members and its supplier partners and helping PDP achieve its ambitions”.

 

 

 

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THREE WAYS TECH COULD BE KILLING BUSINESS

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THREE WAYS TECH COULD BE KILLING BUSINESS


Technology can help businesses achieve their growth objectives, but it can also create problems. Is your business suffering?

It’s certainly an exciting time to be working in the automotive sector as the various takeovers, mergers and private finance deals in these pages will testify. However, change brings challenges as well as opportunities. Technology can help businesses achieve their growth objectives, but it can also create problems. In fact, your organisation could already be suffering from some potentially fatal issues that aware of. As tech moves at such a pace, it is almost impossible to keep track of every problem.

A piece of software, for example, may no longer be operating properly, but the faults go unnoticed because no one uses it regularly. This can go on for years and, all the while, you’re still paying for it.

If you want to ride out the wave of profitability hitting the industry, you need to identify any existing technology problems within your business – from how digital is influencing workplace culture to more specific IT infrastructure issues – and sort them out fast.

Here are three of the most common issues affecting organisations operating in the aftermarket and beyond, as well as some suggestions on how you can solve them quickly and cleverly.

WORKBOOK
The fear of missing out (known in horrible management jargon as ‘FOMO’), plagues many workplaces and across all industries. People need to stay constantly in the loop and this is made possible with easy access to mobiles. Unfortunately, employee productivity suffers in the process. According to a phone insurance company, the average Brit spends 23 days a year using their smartphone – which is more than most annual leave allowances!

Some businesses react strongly to this problem and ban the use of personal mobile phones or social media platforms during work hours. The downside of such an extreme policy is that it damages an employer’s reputation and good workers will soon start to look elsewhere for job opportunities.

The truth is, where there’s a will, there’s a way. A social media ban is almost impossible to enforce and will require many more resources to manage. Instead, take a more strategic approach and encourage your employees to use these platforms to build better relationships with customers. More and more salespeople are using Twitter, LinkedIn and Facebook to successfully reach customers. This tactic is known as ‘social selling’ and it involves sharing business-relevant content to attract leads and engage directly with existing and prospective customers.

DATA SILOS
Data ‘silos’ are the death of business intelligence. If your marketing, finance, HR and sales departments all use different software systems to house and manage their data, then you have a serious silo problem. This separation of customer and company information within one organisation inhibits collaboration and creates a disconnected customer experience.

When departments are working against each other, it’s impossible to achieve common business goals.

An example of this sort of inefficiency is when the sales team can’t access the marketing team’s campaign results to identify new lead opportunities. Or, when the marketing team contacts a prospective customer with irrelevant material because they can’t view the sales pipeline.

Data silos are very bad for business and, unfortunately, very common. Your business needs one system and a uniformed process to manage its data. As soon as any information is updated, the change must be immediately visible to all internal stakeholders.

A consolidated information ‘bank’ improves collaboration and efficiency, and ensures that all departments have access to correct data.

Your company is very likely gathering significant amounts of new information daily. This data is a valuable commodity, but the longer you leave it stored in silos, the less it’s worth. Fresh data doesn’t stay fresh forever. Make sure you have a master system in place when you de-silo your data. With unique identifiers for each account, data integration will be painless and important information will remain rich and relevant.

OUTDATED SOFTWARE
Technology could be described as ‘here today, gone tomorrow’. Many popular devices and software systems are outdated within a year or two. The only way businesses within the aftermarket can keep up is to audit their technology regularly. The market moves quickly and some of your competitors are just as fast – a good spring-clean will help you stay one step ahead.

You may be surprised to learn that some of the systems you run have been discontinued and therefore no longer qualify for update or maintenance support. Employees may also have stopped using certain packages that are no longer relevant – yet you’re still paying for them.

Outdated or irrelevant legacy software puts your business at risk and increases running costs. The longer you delay updating your software, the more expensive it becomes to maintain, improve or expand the technology. Experts like to stay up-to-date with new systems, so old software is made more cumbersome by the lack of people who understand how to manage it.

Take time to review your current software and hardware. Assess your company’s technologies and determine what works and what doesn’t. Find out what processes are improving efficiency within your organisation and which ones aren’t. To really work out how technology is helping or hurting your business, you also need to get input from all your staff, especially the end-users.

To prevent technology from killing your business, you need to make it work for you. It’s no good just adopting the latest software packages every time they’re released – what technologies will help you achieve your objectives best? In a highly competitive market like the automotive aftermarket, the right technology can keep your employees engaged and motivated, and help you improve your profits and productivity in the process.

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