12 May 2020

Ethics and Big Data can help retailers in times of crisis — experts at GSOM SPbU consider

The crisis that has developed in the world in connection with the coronavirus pandemic has launched irrational consumer behavior programs — people began to buy food and goods in reserve. Experts at the Graduate School of Management at St. Petersburg University (GSOM) researched what ethical problems businesses face in times of crisis and what tools can help determine the conditions for the sale of scarce goods.

 

“Previously, common sense would be the only tool for making the right decision, but nowadays retailers have one more tool — Big Data”, authors of the article “Panic deficit and retailers” —   a visiting professor at GSOM, vice president of the Association of Business Ethics and CSR (RBEN) Maxim Storchevoy and GSOM Master student Abdul-Kadir Ameyao consider. In their opinion, it is Big Data that can help retailers determine the ethical conditions for setting value and assess the availability of goods.

Many networks have consumer discount cards and can track consumer purchases. This information can give them the opportunity to assess the number of people in the family of each client, as well as the rate of purchase of a product for each.

For “crisis” products, the shortage of which is inevitable, the retailer can set the norm based on its idea of ​​a fair distribution of the available stock. At the same time, it can establish an increasing price scale for purchases in excess of the norm. This will help both to provide everyone with a minimum amount of crisis product, and create motivation for market participants (including the retailer) to satisfy this deficit as quickly as possible.

"For example, a retailer can sell the first 10 masks at a price 50% higher than normal, and masks over this amount at a price of 400% of normal. This price discrimination will limit the unethical accumulation of scarce goods and create additional funds for faster replenishment", said Maxim Storchevoy.

At the same time, the retailer must assess the ethical limit for price increases, because its mission is not only to maximize profits, but also help as many families as possible to buy the necessary minimum.

The Association of Business Ethics and CSR (Russian Business Ethics Network) is a professional community of leading Russian experts in the field of business ethics and corporate social responsibility, as well as business representatives who share the values ​​of the Association and are interested in its work. The association is a member of the European Business Ethics Network — the European network of national associations in the field of business ethics.

Ассоциация этики бизнеса и КСО (Russian Business Ethics Network) это профессиональное сообщество ведущих российских специалистов в области этики бизнеса и корпоративной социальной ответственности, а также представителей бизнеса, разделяющих ценности Ассоциации и заинтересованных в ее работе. Ассоциация является членом European Business Ethics Network – европейской сети национальных ассоциаций в области этики бизнеса.