PR and social media observations on the demise of Ferrit

Posted by: Thom James

The news that Telecom is folding its online retail outlet Ferrit has come as little surprise to most commentators. In the pick of the blogosphere’s musings on the story, Lance Wiggs lays out the reasons he believes Ferrit has failed. I agree in particular with his third point about Ferrit’s poor business case. From a consumer’s point of view, it was always a somewhat confusing proposition, while to retailers it will have seemed a rather questionable channel to opt for - a commissioned intermediary over direct trade with the customer.

From a PR perspective, Ferrit was persistently dogged by negative coverage which gradually eroded the brand’s credibility. General Manager Ralph Brayham consistently found himself defending Ferrit’s performance in the media, which would have had a self-perpetuating effect on the number of customers using the site. Ferrit also made some fundamental mistakes with its social media presence. I wrote a piece in mid-2007 for the Marketing Association’s DLB magazine on online client retention, citing the damage done by the Ferrit fake comments furore. Employees wrote product reviews disingenuously in the guise of Ferrit customers, which led to coverage in The New York Times, of all places. The perceived lack of transparency will have further compounded Ferrit’s diminishing credibility in the eyes of consumers. It’s small wonder Telecom chose the New Zealand summer media lull to wind up the failing venture.