Brands wield enormous influence over popular culture and whether they are pursuing core social values or trying to preempt boycotts, brands are finding it harder to ignore social, environmental and political issues.
Boycott culture has grown since Donald Trump emerged as a candidate in 2015. Trump has repeatedly used his office to advocate boycotts as have anti-Trump advocates. Earlier this year Trump called for a boycott of Goodyear after company guidelines were leaked that instructed employees to avoid wearing politically affiliated attire including MAGA hats.
Goodyear issued a nuanced statement that read as follows, “we ask that associates refrain from workplace expressions in support of political campaigning for any candidate or political party, as well as similar forms of advocacy that fall outside the scope of racial justice and equity issues”.
Trump’s attack against Goodyear is but the latest in a long line of proposed boycotts emanating from the Oval Office. Even when he was on the campaign trail in 2016 Trump called for boycotts against Macy’s Inc. and Oreo cookies. Other companies that have been the target of his wrath include GM, Merck, Amazon, and T-Mobile. Trump has also attacked news outlets that share unflattering truths about him, this includes CNN, The Washington Post, The New York Times, HBO, CNBC, NBC, MSNBC, CBS, Rolling Stone, The Oklahoman, The Dallas Morning News, the Arizona Republic, The Wall Street Journal, Vanity Fair, and USA Today. Trump’s first salvo of corporate bullying started with his attacks against Boeing, Carrier, and Ford.
Initially corporate America pushed back against Trump. They began building business coalitions that publicly opposed the president’s policies. Only three weeks after Trump’s inauguration businesses including Tesla, SpaceX, Apple, Facebook, Google, Microsoft, Uber, Reddit, Netflix and Dropbox sued the administration over the Moslem ban. Corporations are also wading into congressional politics. Companies including Land O’Lakes and Purina rescinded their support for Iowa’s Republican Representative Steve King due to his racist remarks. In response to public pressure CVS Health, Dow Chemical and Southern Company said they would stop donating to pro Trump organizations
Corporations played a role in the 2018 midterms. Patagonia actively encouraged their employees, patrons and stakeholders to vote with the planet in mind. They directly challenged Trump’s decision to eliminate protections for public lands like Bears Ears National Monument in Utah in a campaign titled “The president stole your land“. Patagonia is also part of a coalition of companies that filed a lawsuit against the Trump administration designed to protect the monument. The outdoor apparel company even helped to elect Democratic Senate candidates Jacky Rosen in Nevada and Jon Tester in Montana.
However, this early corporate resistance soon gave way to fear as business leaders fell silent. However, in the same way that Republicans will wear the stain of their support for this mendacious presidency, corporate leaders and the brands they represent may also have a hard time finding their way back to some consumers. Consumers are increasingly holding brands accountable. Well known brands like Coca-Cola Co., PepsiCo Inc., Starbucks Corp., Nike Inc., Uber Technologies Inc., Under Armour Inc. and Kellogg Co. have all been targeted by or threatened with consumer boycotts.
Soon after Trump’s inauguration consumers began organizing boycotts of the Trump family brand. Less than a month into the Trump administration Kellogg’s withdrew their advertisements on Breitbart News citing their cooperate values. In 2017 the Democratic Coalition Against Trump posted a free “Boycott Trump” app that helped people to avoid the dozens of businesses that are connected to Trump. Retailers like Nordstrom, T. J. Maxx, Marshalls, Neiman Marcus, Belk, Jet, ShopStyle and Kmart dropped the Trump family’s clothing lines out of concern that they could be hit by a consumer backlash. Trump even saw his name removed from some prestigious buildings and companies that supported Trump like LL Bean were swamped with complaints.
Some brands oppose Trump because they are seeking reputational benefits, while others are trying to preempt boycotts. For equality focused brands like Nike and Adidas social activism makes sense, while others are more cautious. Each company has to weigh the risks and benefits. Although there are considerable benefits associated with social advocacy., they cannot afford to ignore the fact that 70 million Americans voted for Trump, With median incomes well above state averages, Trump supporters have considerable spending power.
However, there are potentially serious adverse repercussions attached to being associated with the Trump brand just as there are dangers associated with trying to play it safe. Many companies remained silent due to concerns about potential financial impacts associated with speaking out. However, there is reason to believe that these concerns may be overblown. The evidence suggests that Trump’s attacks have no significant impact and in some cases they appear to have contributed rather than detracted from some brand’s fiscal well-being. His call for a boycott against Goodyear appears to have helped rather than hurt the company (Goodyear’s stock values hit a six month high at the end of November and early December). After being attacked by Trump in 2017 Nordstrom’s stock also soared. Patagonia is another company that reaped tremendous economic benefits from opposing Trump. This suggests that at least for some, there may be brand value and stockholder benefits associated with challenging malfeasance, even if it comes from the president.
At the end of the day most corporations are beholden to consumers and they are increasingly expecting that the companies they buy from reflect their values. While this cuts both ways, corporate decision makers need to appreciate the stark difference between those that support Trump and those that oppose him. Corporate leaders need to ask themselves where they want to position their brands. Silence in the face of this administration’s anti-environment actions and racism is a dangerous strategy. What seems like a shrewd strategy may quickly turn into a failed strategy. Corporate leaders that once feared being labeled an activist brand may find that it is an unavoidable competitive necessity.
As Cone Communications pointed out all the way back in 2013, the failure to adopt CSR risks a consumer boycott. The more recent Weber Shandwick survey suggests that executives have to figure out how to walk the tightrope. Their results show that 41 percent of shoppers and 46 percent of executives say companies should express an opinion or take action on controversial issues. Forty percent of consumers say they regularly or frequently talk about how honest and ethical companies are. Slightly more than a third (34%) of consumers say they’re buying more from companies or brands that share their values. Overall the results suggest that there is an ever growing percentage of consumers who expect companies to take a stand, or at the very least they expect them not to be silent.
As illustrated by Under Armour brands have been punished for supporting Trump. The brand was downgraded by an analyst at Susquehanna International Group after CEO Kevin Plank called Trump a “real asset” to the U.S. DoneGood is advocating a boycott and they have published a comprehensive list of companies associated with Trump.
Business owners donated disproportionately to Trump’s reelection bid (compared to Biden) so there are many exposed companies who may need to rethink their political support. Those who support Trump and even those who are trying to straddle the fence need to remember that inaction is an action that could be held against them. Corporate leaders need to understand that the decisions that they make (or fail to make) will stick to their brands long after the political cycle changes.
Although some believe that Trump will be a kingmaker, there is ample evidence to suggest that his brand is already fading and will fade even more once he leaves office. If corporate leaders cannot marshal the courage to do the right thing, then perhaps they can be inspired by the facts. At the very least they need to understand that being obsequious or a sycophant is not a viable strategy. More and more data is emerging that shows taking a stand is not only good for connecting with consumers, it is good for shareholder value. So rather than being a risk, corporate activism is becoming an imperative.
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