Dilute Retailer Schadenfreude Charitably

Schadenfreude means delighting in the misery of others. The word made it into a “The Simpsons” episode where Ned’s business is failing. Homer is overjoyed. When Lisa defines schadenfreude, Homer replies, “Those Germans have a word for everything.” Early last year, Ford and GM may have been said to demonstrate schadenfreude when reacting to the large-scale automobile recall by Toyota Motors. The companies offered $1,000 bonuses to consumers who wanted to trade in their Toyotas.
     A Bloomberg Businessweek article about the reinsurance industry applies the concept to business customers: Reinsurance is insurance for insurance companies, helping the companies pay for the sort of unusually high number of claims filed in the face of severe disasters.
     The Businessweek article recounts a conversation from 1998, at a time that the market for the product was soft. “What we need is a good catastrophe,” said one staff member. It’s reported that after Hurricane Andrew hit Florida in 1992, eight reinsurance firms launched business, seeing that there would be a booming demand from insurance company clients. This schadenfreude thread also showed up in an e-mail I received from a reader of my September 1 blog posting about Hurricane Irene. “We love Irene,” the retailer wrote in response, sending me evidence of a gigantic jump in store sales because of the storm.
     The deaths of about forty people have been attributed to the hurricane, the total for the countless millions in property damage is still being tallied, and thousands of people were displaced. The “We love Irene,” like the “What we need is a good catastrophe,” might charitably be seen as cynical humor.
     If we’re to take a charitable tack, though, let’s suggest the retailers dilute their joy at profitability by themselves being broadly charitable in their thinking. Psychologists at University of Kentucky say schadenfreude comes from envy. Psychologists at Flinders University in Adelaide, Australia say schadenfreude is rooted in resentment. The sort of resentment which can follow Toyota claiming to be the unsurpassable model of quality and then appearing to fail to walk the talk.
     When applied to retailers, a third explanation for schadenfreude is tunnel vision. The humor distances us from tragedy. Calling a catastrophe a “loss event,” as the reinsurance industry does, serves the same distancing function. The risk is that the retailer fails to stay tuned to the human dimension which distinguishes merchants who end up profiting most in life.

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