Bruce Whitfield: Lessons from the Woolworths fiasco
- Woolies is building a reputation for treating entrepreneurs' ideas as a free crowdsourcing service.
- Its fight with a Cape Town entrepreneur left it red faced (again).
- But there is a way to stop it happening and could be a win-win.
If you went to your local Woolworths, filled a trolley and exited without paying, they’d call the cops on you. You would be prosecuted and end up with a criminal record.
So, what makes Woolies think it can do the same thing with the ideas of others?
By now you probably know about the latest hijacking of an entrepreneur’s intellectual property (IP). Woolworths is developing an unfortunate reputation for treating the IP of others as a free crowd-sourcing service.
Read more: Oops Woolworse, you did it again!
For a company that gets so much right, when Woolworths gets it wrong, it does so spectacularly. It needs to make amends. I have an idea I would suggest they implement. Read on.
I could berate the R60bn Goliath for its unconscionable behaviour, but that just adds to the noise.
Let’s rather learn how Shannon McLaughlin, the savvy entrepreneur who accused Woolworths of nicking her baby carrier design, built her case against the retailer, giving it no way out, other than to back down.
Ever since I busted Woolies for copying Frankies six years ago, I have been inundated by a mix of claims, some real, some dubious and some from outright chancers looking to embarrass the company.
One genuine claim came from a food manufacturer who told me how they had pitched their product line to Woolworths and six months later found a copy of their product on Woolworths shelves.
How did they know, I asked? Woolworths had repeated the typo the entrepreneurs had made on their label, on their own. It was blatant, but the small company was reluctant to pick a fight as it wanted to maintain the distribution it had via Woolworths.
McLaughlin, when she discovered her product lookalike on the Woolworths website in mid-December, had no such qualms.
She did the right thing. She raised the issue with the company and got a standard “we’ll investigate and get back to you” fob-off. She set the company a deadline. When the company missed the deadline, she struck. And she did it elegantly.
She laid out her case clearly and succinctly on her blog and then relied on her community to spread the word. The comments beneath her blog piled up. There was even one from the Frankies founder Mike Schmidt which suggested she contact me. But she didn’t. Her community alerted me to the blog which spelled out exactly how she had gone about building a case against the retailer.
It wasn’t just an allegation. She’d done a forensic investigation into her sales and discovered that two women working in procurement had each ordered one of her carriers and had them delivered to Woolworths head office. She detailed the similarities, acknowledging the minor differences in design but asserting that her IP had been lifted by the corporate.
All hell broke loose on social media and within 48 hours a besuited executive was in her shop for a cordial chat. She turned down an invite to go into the lion's den, but got the firm to come to her. Classy. An apology was issued and the next day came the withdrawal of product.
If you’ve ever tried to go to sleep with a mosquito buzzing round the room, you know just how hard it can be to ignore the little guy.
It was a victory. Of sorts. McLaughlin forced the giant to backtrack, raised her own profile and became a poster-woman for standing up to corporates, but it was a fight she should not have had to have.
Woolworths needs to make amends. And could do so elegantly and might even benefit by living the promise of its “good business journey”.
Here's what I propose:
In its flagship stores (or at least stores of a certain size), Woolworths needs to dedicated a prominent space to local product and local design.
They could in eight to ten stores nationwide make shelf space available for say a month, maybe two, even three, to showcase great local design.
It would boost the profile of local entrepreneurs and build a relationship with them.
If sales exceed expectations, the relationship could be cemented. If disappointing, then that space could be cleared for another local product offering.
Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster.
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