Where does retail nepotism occur, and what are the signs that it is occurring?
Retail nepotism will occur among marginalized ethnic groups in a society. When you don’t represent the majority or are a marginalized group or subculture, you actually appreciate the sense of community. This is heightened when marginalized groups are among like-others in a situation where they know they’re in the majority.
For retail nepotism to occur, the service provider must have some flexibility in either pricing or in enhancing service quality. It wouldn’t occur in situations or positions that are completely micromanaged, such as sales cashiers. It most likely will occur in hotels, airlines, bars and restaurants, health care — in other words, retail environments that still have a great deal of personal contact.
How can you prevent retail nepotism from occurring?
You need to bring it to the forefront and talk about it with employees as a form of discrimination. Employees need to understand that financial discounts must be authorized based upon customer segmentation.
You also need to be aware that like-service providers may simply enjoy working with like-customers to make it a win-win situation for both parties. For example, some banks in Germany now have Turk bankers working with the Turkish community. But because there’s a biological component to retail nepotism, where people are motivated to take care of others like them, it’s almost impossible for you to control this 100 percent.
Why is understanding retail nepotism important?
Retail nepotism is a form of marketplace discrimination. Even though the groups receiving it are satisfied and enjoy the benefits, it’s still a form of discrimination. Companies with personnel who engage in retail nepotism could receive bad press and word-of-mouth from disgruntled customers. You could also lose business from the consumers who didn’t receive a discount. The damage that could be inflicted on a company’s brand is staggering. Addressing retail nepotism through formalized employee training programs is more important than companies realize.
Mark Rosenbaum, Ph.D., is a Fulbright Scholar and assistant marketing professor in the department of marketing at Northern Illinois University. Reach him at (815) 753-7931 or [email protected].
