Beware the ROI Focused Merchant in the Era of COVID-19

History tends look unfavorably upon those who take advantage of others when the world is at its most vulnerable.  We’ve already seen this play out numerous times in the last couple months as the COVID-19 pandemic has gripped the world; a Tennessee man who tried to take advantage of market conditions by hoarding nearly 18,000 bottles of hand sanitizer with plans to sell them at extreme markups had a change of heart once the backlash and threat of legal action grew, and he decided to donate his supply[1]. Phishing scammers have had a field day preying on those looking to take advantage of potentially free items or aid wherever available[2].  The worst possible stance for a business to take during this time would be to structure or promote a new consumer-facing marketing or loyalty effort that has the guise of benevolence and is later found out to be quite the opposite.

Discount for whom exactly?

Grubhub, the large food delivery and ordering company, began a promotion in early April called “Supper for Support” that offered those using their platform $10 off an order of $30 or more placed between 5 and 9pm.  From a consumer facing perspective, it appeared that Grubhub was allowing consumers to help their favorite local restaurants AND secure a nice discount on their order.  However, Grubhub came under fire once details revealed that they expected restaurants to cover the $10 discount themselves, in addition to paying a Grubhub commission on the original order total.[3] 

Grubhub has since offered to fund a paltry $250 towards the discount for each participating restaurant, which will likely continue to draw the ire of consumers and restaurants in this time where many restaurants find themselves on the brink of survival.  The net impact to Grubhub may find consumers searching for alternate ways to order their favorite delivery and takeout, and potentially abandoning their platform altogether.

Limit your motives

Consumers now, more than ever, are looking for something beyond some CRM text explaining how they are conducting business differently and how “we’re all in this together” (while CRMs have an opt-out feature, COVID-19 does not.  We are all in this together whether we choose to be or not).  People are looking to their favorite brands for something tangible beyond a message, and companies like Nike (free premium workout at home access) and Levi’s (concert series every weekday at 5:01pm PST to raise funds for charities) have been up to the task. 

If there is anything this pandemic is teaching the world, it’s about shared humanity and the shared experience we are all having now.  Companies establishing their motives beyond generating pure additional revenue will emerge from this pandemic with even stronger consumer relationships.

For further discussion, contact tradway@wcapra.com


[1] https://www.marketwatch.com/story/tennessee-man-donates-his-almost-18000-bottles-of-hand-sanitizer-after-furious-backlash-2020-03-16

[2] https://www.poynter.org/fact-checking/2020/fact-checkers-around-the-world-see-phishing-scammers-taking-advantage-of-the-covid-19-crisis/

[3] https://www.theverge.com/2020/4/2/21206019/grubhub-restaurants-250-discounts-coronavirus