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Technology recalls surge as regulation can’t keep up with product innovation

(Image credit: Image Credit: Totojang1977 / Shutterstock)

Whether it’s a cutting-edge gadget, an exciting software platform, or an advanced appliance, the latest technologies to hit the market can create a consumer and business buying frenzy. They can fully meet with expectations and they can turn out to be a passing fad, but on occasion, they can also present possible dangers, particularly if they bypass strict health and safety regulations for the country in which they are being sold.   

Where technology is concerned, the speed of development is rapid. Consumers are reliant on manufacturers to work within product safety guidelines and they trust them to do that before bringing a product to market. However, we have all heard the horror stories when technology goes wrong and in an effort to apply exemplary customer relationship management, each stage in the supply chain from retailers and distributors through to manufacturers becomes involved in a highly visible, sometimes damaging product recall.    

One of the issues with fast moving tech innovation is that regulations can struggle to keep up.  Drones, for example, are frequently used for surveillance purposes and like any other surveillance camera system, their use is governed by data protection legislation. The General Data Protection Regulations (GDPR) come into force next May, which will have a significant impact on the use of drones for capturing data, and puts pressure on operators to comply. However, according to the latest information from the Surveillance Camera Commissioner, clear guidance is not yet available and is still being worked on, which means operators are left in doubt as to exactly how GDPR will impact them.     

Potential for recalls   

Any regulatory uncertainty, whether related to drones, wearables, software, operating platforms or kids’ tech toys, could lead to legal action if the technology is at all defective, potentially law breaking, or carries inadequate warning labels. The potential for recalls, therefore, remains as murky as the laws themselves, but manufacturers must prepare for the likelihood of regulations becoming more stringent and possible pitfalls that could result in brand damage.  

An area of technology that is currently gaining interest is low-code and no-code platforms for straightforward app development. According to a 2016 Gartner report, the market will be worth $15 billion by 2020, and these platforms are being embraced by organisations who want to rapidly develop their own apps, against their own business process needs and at low cost. Indeed, we have embraced a no-code platform ourselves in order to build flexible apps for each recall project we handle on behalf of a client, linked directly to our telecoms network. We know from experience that this has had a significant and positive impact on our own CRM system, and added business value. However, whilst most enterprise low and no-code platforms automatically facilitate any industry specific regulations and compliance, there is a danger that the creation of multiple apps that are not processed through IT departments, will lead to a lack of approved security protocols and over time will not be compliant or meet with necessary regulations.    

Understandably, if a manufacturer or any other stakeholder hits upon a product or development that takes the world by storm, they want to make the most of it, so if it falls between regulatory gaps, which often happens with medical devices such as health trackers and wearables, or is simply so innovative that regulations have not kept up, preparation is paramount.   

If the worst should happen 

Even with the most intensive testing procedures, products can slip through the net because of defects or because safety is not being met, as in the case of US pacemakers currently being withdrawn over concerns the devices’ software could be hacked. If this happens, and consumer complaints arise, it is important to investigate them fully. If a product recall is deemed necessary, this can have a long-term impact on a brand, not only from a financial perspective, but also in terms of reputation and customer loyalty.    

In this situation, it’s helpful to plan ahead and outline a product retrieval programme that can inform every stage in the supply chain. Third party recall partners can be on stand-by to help, but there is also no substitute for a contingency plan before an issue arises. A mock recall can be a useful way to test how well a company is equipped to handle a sudden recall situation.   

If the product is one that sells through traditional retail channels, the primary objective must be to retrieve all affected products from shops or eCommerce websites and from the warehouse. Ideally, a field force should be used to pull products off shelves, or directly from consumers’ homes for testing. In addition, to prevent non-affected products from the same manufacturer also being wiped from shelves, it is necessary to work closely with retailers, or implement a field team that can visit distributors and retailers in person, which will help to ensure the focus is only on the affected product.     

When it comes to putting things right, companies must understand the requirements of multiple regulatory bodies – both within and between countries. These rules govern not only the production and sale of the product, but also transportation, storage, and disposal in the event of a recall. If a new smartphone, or tablet for example, is found to be faulty, the regulations regarding retrieval and testing across many different territories must be taken into account.   

Notifying customers during a recall is vital. Specialist contact centres can be set up, confidential data registries established and a multichannel approach taken, which allows important safety and recall messages to reach the maximum number of people, particularly over social media.     

Recall plans can help to quickly locate recalled products and remove them from the marketplace and out of harms way. This can mitigate the financial, legal and brand reputational risks and even increase customer loyalty. The more popular a product, the more consumer, media, and regulatory scrutiny it is likely to receive, so it is crucial that companies understand the implications, adapt as regulations evolve, prevent crises with proactive risk assessments and take action should these rules ultimately result in a recall. Technology is moving at break-neck speed, so manufacturers and developers need to be sure they can keep up if things don’t go according to plan. 

Farzad Henareh, VP Business Development EMEAA, Stericycle ExpertSOLUTIONS 

Image Credit: Totojang1977 / Shutterstock

Farzad is an international recall expert advising global brands on how to manage risk and protect brand reputations.