Interactive Retail and the impact of hoarding, obsessive
collecting, shopping binges and compulsive over spending.
By Budd Margolis June 27, 2011
There is a growing movement of conscientious consumers
who believe that the impact of their activity can be guided to shape how
companies deal with the environment and social issues. Green retailing is more than a trend and the
recession has shaped peoples purchasing behaviour significantly. Today, the retail that still believes selling
more in a world that wants
less and less waste is going to fail.
Conscientious retailing is not just
about sustainable habits or programmes but about care for the planet, its
resources and its people. A growing
number of companies are giving back and getting involved in their communities
and this is a healthy, even holistic approach to building successful companies,
communities and employees.
There are super customers who have
an annual spend of tens of thousands of dollars and then there are compulsive
shoppers. What is at issue are those who
spend beyond their limits and thus the quality of their, and their families
lives. What is the responsibility of retailers in identifying and then dealing
with those who have disorders?
“A 2006 Stanford University study has
concluded that compulsive overspending or over shopping is a legitimate
disorder that affects approximately 6% (17,000,000) of the U.S. population and
that men and women suffer about equally” (Shulman, 2008).
Some people are hoarders and could
be classed as part of Obsessive/compulsive
Disorder (OCD) but there is very little research available on the
subject. It is estimated that 1-2% of
the population are hoarders while fewer than 5% are ever discovered or treated.
There are as many reasons and opinions as to why people have this or that
disorder as there are potential cures or treatments.
Every retailer has “issue”
customers some may try to defraud or have a high return rate. This is part of the cost of conducting
business but what this article focuses on are those customers who either have
difficulty or can not control their disorders.
Counting statistics for all other retail consumer behavioural disorders,
I think it is fair to say that as much as 10% of those buying from you may have
Just because someone collects
items does not mean they have a compulsive disorder or are hoarders. But many people are deluded in the belief
that their activity is leading to wealth creation via eBay or that they have a
healthy hobby. It is up to companies to make sure that they do not sell
unhealthy messages to their consumers. That takes a level of respect in the
corporate to consumer “trust proposition.
Television shopping and eCommerce
have been publicised as potentially dangerous places for compulsive
spenders. Mail order and home delivery
does have one unique benefit and that is that this activity is carried out
anonymously although companies do spot unusual trends.
Tobacco companies have to issue
warnings on their packages because there is a serious health threat to the use
of such products. Gambling and alcohol
also carries serious warnings but retail is usually a necessary activity and we
can not regulate and “nanny” hyper-manage every human activity from obvious or
Shop channels and web sites
regularly improve anti fraud measures and should be conscientious of unusual
purchase activity to identify potential problems. There should be plans ready to implement in
order to deal with such issues.
Retail therapy or shop till you
drop references are often seen as humorous tags of an unhealthy or
inappropriate behavioural activity in our consumerist society but there is much
truth here. There are many emotions that
are triggered with the acquisition process and possession of goods. Most of what we buy we do not really
need. The pity is some of what we buy
does not do what it purports and in some cases causes a negative impact on our
health or the environment.
I do not think regulating this
area to extreme levels, as has been tried in some countries, will help solve or
treat the disorder, but I do feel that companies should be more aware of and
state their policy towards compulsive purchases. It is a delicate area as your MVC or “most valued
customers” are a small but very powerful and vital group of any retailers
business. Any harm to this group can
backfire and cause a tsunami effect on your revenues.
In a democracy, people have the
right to behave as they wish as long as it is within the law and does not cause
harm to anyone including themselves. And our society is only as strong as its
weakest link so looking after the weakest provides many benefits for all of
us. It is only a small percentage of the
consumer pool that has issues but they are as deserving of help as anyone with
a disability whether it is physical or mental.
Credit rating is one way to
analyze a consumer’s credit health but there should be a list to identify
consumers with retail disorders as well. One can either place limits or alerts
or try to manage the problem in another clever way. Cutting someone off so that they can continue
their abuse with another retailer is not a solution for that individual or the
Profiling customers so that
potential problems can be identified, confronted and hopefully avoided is a
serious and important task. We must be aware of our rights to privacy and treat
our customers with respect but showing concern is not a weakness and promotes a
I recall a shop channel that
celebrated its best customer with free flights, first class hotel
accommodation, wonderful hospitality, gifts, meets with the presenters and tour
of the channel only to realise later on that this customer may have bought the
most but also returned the most and actually cost them a great deal of money!
They spent thousands celebrating a customer that cost them thousands.
We know that geographic data
exists so that the general wealth or income of a person can be determined by
their geographic location. Adding in
credit rating and purchase history we can build metrics to indicate potential
Another topic is the potential of
convergent technology which provides ubiquitous access. But with more access we also create new
opportunities for fraud. Trusted loyal
customers will be higher valued in the future and should be treated as the
By helping customers we can build
greater trust and loyalty and that leads to higher spend, revenues, and if we
manage efficiently, profits.