In an unprecedented move for Japan, Walmart has introduced a ‘satisfaction guaranteed’ policy for fresh foods throughout its entire 374 store Seiyu chain. Previous attempts to introduce what is a standard policy for Walmart overseas floundered due to dismissive store employees, but Walmart hopes the new move will help improve quality standards throughout its supply chain, reduce wastage, and impress the customer all at the same time – even offering money-back on food that has already been eaten.
Japanese consumers have long been conscious of fresh food quality, and Seiyu has now announced a new marketing initiative to try to take advantage. A slow, archaic supply system, often limited in supply source, means that freshness can be a problem at some stores, and the relatively large proportion of fresh food sold in packages rather than by weight doesn’t help. More recently, bigger chains are switching to centralised buying. All the large supermarket operators are taking a firm grasp of their own supply chains, entering into direct supply contracts with growers or even setting up their own farming operations, but for the industry as a whole, this remains the exception rather than the rule.
Seiyu has now upped the ante, introducing the first ever satisfaction guaranteed policy for fresh food. From April 1, the chain began promising a full refund for any complaint about fresh fruit and vegetables, meat or fish – even if the customer has already eaten the item. There’s also no time limit for claims for items purchased after the start date.
Seiyu currently carries around 2,000 SKUs in fresh food, including cut fruits and sashimi. Customers are required to present a receipt to claim a refund and the store is expected to record the customer’s name, address and complaint.
‘Satisfaction Guaranteed’ is a target throughout Walmart’s operations, and by initiating the guarantee on fresh food in its 374 chain in Japan, Walmart-Seiyu hopes to drive awareness to customers and pressure competitors with less able supply systems. Its biggest success since entering Japan more than 10 years ago is the complete overhaul of Seiyu’s supply chain, providing real time monitoring of stocks and sales and integration with suppliers. With so much fresh food still supplied haphazardly through local markets, Seiyu has a genuine competitive advantage, and the guarantee to customers translates this into its marketing.
Such policies are virtually unheard of in Japan. Department stores talk about customers returning dogs and other improbable purchases, but there are few cases, apocryphal or otherwise, of any retailer actually providing a refund except where they clearly made an error themselves. When Carrefour tried a money-back guarantee in 2000, customers simply didn’t believe the policy was for real. Walmart has already tried a similar guarantee on its clothing and other brands, only to find that individual store managers often chose to argue with the customer or even outright refuse to honour the claim, such was the ingrained expectation that all sales are final. Seiyu says it has overcome such problems in staff service through better training.
The guarantee is also aimed at improving Seiyu’s quality levels and cutting costs in the supply chain through awareness of the need for high quality. Seiyu has enhanced its staff education programmes and improved guidelines for in-store and preparation centre procedures to increase product quality, trying to involve employees and suppliers at every stage. It hopes to reduce unsold stock losses through the new system too.
FOCUS: Leading shopping centres upgrade their way to 3.9% jump in sales in 2014-15
November 2015 News in Brief
Rakuten losing in online fashion
Consumer loyalty in Japan: loyalty programmes add value
Seven & I continues major overhaul of GMS and department stores
Lumine plans direct franchises with international brands and retailers
Mobile ads help reach 15 million young women
Itokin and Onward under pressure from changing market
Get a concise monthly update on Japanese Consumer Markets – and a FREE copy of our monthly report.