The Success and Failure of Consumer Boycotts
Do boycotts really work?
Many Consumers Are Brand Loyal
Consumer boycotts happen for a variety of reasons. People may disagree over branding, product, services, hiring practices or they may have political motivations and want to force a company to change what it is currently doing. Companies like Coca-Cola can make small brand changes such as introducing "New Coke" in 1985 which was supposed to be sweeter than the original formula. Coke lovers were outraged. They hated the new product and demanded that Coke return to the original formula. Jesse Meyers, the publisher of Beverage Digest, stated, "This has got to be the boldest consumer products move of any kind of any stripe since Eve started to hand out apples." He was right, and consumers won that battle to reinstate the Coke they knew and loved.
Consumers can decide to stop purchasing products or services from a specific company because they disagree with a new policy. But they also tend to have fickle commitments, so most boycotts don't last very long. The financial impact of a boycott can result in the loss of billions of dollars in sales.
Have you participated in a long-term boycott, that caused a company to change a policy?
The Purpose of Boycotts
The goal of a boycott usually has a two-fold purpose. The first is to create awareness about the company's decision, and the second is to hurt the company financially. The only real way for a boycott to impact a company's bottom line is for consumers to stop buying goods and services. If consumers are truly serious about getting the company's attention, the boycott will last until they get the type of change that will make them comfortable about spending money with that company again.
These days, social media is the leader and communicator of consumer boycotts. People join boycotts for a variety of reasons but rarely commit to a long-term boycott. The reasons for this vary due to proximity, resources, they stop caring about the issue, or they never truly understood the issue, and they just want to get back to normal.
The Corporate Response to Boycotts
Executives understand that they are beholden to shareholders, and those shareholders have a lot more power than the Board of Directors. They also understand that boycotts no longer consist of a group of people marching in a circle, holding signs of protest. They know a consumer doesn't have to get off the couch to boycott a business. They also understand the power and influence of social media, and just how quickly a story can become viral.
The best way to end a boycott is for the company to admit poor judgment and offer ways to rectify the decision. Failure to address consumer concerns will not be forgotten, and the longer a company ignores their customer, the longer a customer will withhold their checkbook.
This sign does not include men
Target Chose Transgenders and Self-Identification Over the Physical Safety of Women and Children
In April 2016 Target announced a new bathroom policy for brick and mortar stores. This was an opportunity to demonstrate inclusion, diversity, and love for everyone. The new policy stated; "We welcome transgender team members and guests to use the restroom or fitting room facility that corresponds with their gender identity. Everyone deserves to feel like they belong. And you’ll always be accepted, respected and welcomed at Target."
Target boldly and foolishly decided that a person's gender identity was more important than their physical appearance. Gender identity at Target became more important than the safety of women and children that use Target restrooms or fitting rooms. Target could have built separate bathroom facilities in their stores and created a positive PR campaign around the decision, and that would have been the end of the discussion. But for the past year, Target has remained steadfast about their new gender identity policy. They are in love with a decision that is hurting their bottom line, but they don't seem to care.
I have boycotted Target since they announced this policy. I have not spent a penny at Target since April 2016 and will not until they recognize that women and children should not be forced to share the restroom or fitting rooms with men. Other consumers also maintain the boycott, and in March 2017, it is reported that Target has lost $15 billion since the announcement. Target's response to the massive drop in consumer spend is to redesign their stores and parking lots, but not their bathroom policy. Target has stubbornly refused to address the elephant in the room, and it might just crush them.
Trump is hard to ignore
Politics and Retail: Nordstrom's Customers Versus the Trump Brand
After Donald Trump was elected President, people that opposed him soon found a way to oppose his family. Trump's daughter, Ivanka had a clothing and accessory line in Nordstrom's retail stores. Anti-Trump consumers decided to boycott Nordstrom's until they remove the Ivanka brand from their inventory. The company did remove the Ivanka inventory but claim that it was based on low sales and brand performance, not because of a boycott. Wall Street analyst, Bridget Weishaar stated, “Something like this is noise.In the long term, this is not going to change whether this is a company that has a sustainable competitive advantage or not.”
In 2015, Nordstrom's faced a similar boycott led by anti-Trump activists. Co-President Pete Nordstrom distributed an employee memo that read, " “This is a sharply divisive subject. No matter what we do, we are going to end up disappointing some of our customers. Every single brand we offer is evaluated on their results—if people don’t buy it, we won’t sell it.” This was an appropriate and respectful response to a highly partisan topic. Pete Nordstrom nipped the conversation in the bud and went about his normal business. That is the right response, and it came from the top of the organization.
Starbucks Did Not Understand Their Customer Base or the Economy
On January 29, 2017, Starbucks CEO Howard Schultz announced his commitment to hire 10,000 refugees from around the world. The shocking decision to hire refugees instead of unemployed Americans, during a recession was met with shock and disgust. Consumers began to boycott Starbucks in social media, and they gave up their daily latte, chai tea, or regular coffee. On twitter, @StockMonsterUSA posted the following, "Black American Unemployment is double the national average but Anti-USA Starbucks wants to hire refugees #BoycottStarbucks #MondayMotivation.
So, who is running the store and why don't they understand the needs of their customer base? How could they make such a nonsensical decision without knowing that it would cause consumer outrage?
Uber Riders Delete the App
Uber has managed to create a series of issues that are leading to death by a thousand paper cuts. However, for the purpose of this article, I will focus on one issue, and that is surge pricing. Many Uber riders deleted the Uber app from their phones and joined the boycott when the company announced the end of surge pricing. Surge pricing is a way to punish demand for lack of supply. In other words, Uber would increase the fare during 'peak times' to ensure that Uber riders will have a ride in their area when they need one. The announcement about ending surge pricing was preceded by taxi drivers at JFK airport that stopped working as a protest against the new executive order on immigration, by President Trump.
Uber leadership either didn't understand their customers, who preferred Uber drivers over taxi drivers, or they failed to understand that their riders would be angry when they found out the truth about surge pricing. Uber riders had been taken for a ride, and they were angry. A hashtag was created, #DeleteUber and was fed by the fire of social media. According to The Atlantic, 200,000 Uber riders deleted the app.
It's one thing to find out that you were overcharged, and there is no recourse. It is yet another to go back to the old way of doing things, like going for a ride in the back seat of a taxi. Uber riders are accustomed to the comfort of Uber cars and trust the drivers won't take them for a ride, because the rider can view the trip on the driver's phone, or their smartphone or tablet. Before the days of smartphone and mobile apps, a taxi driver could literally take a rider out of their way if the rider wasn't familiar with the area. Consumers that boycotted the company and deleted the app must decide if an outdated pricing model versus riding in a taxi matters in the long run.
The Impact of Boycotts
Boycotts are usually short-lived, non-violent consumer protests that are a valid way to draw media attention, and impose change within a company. Smart leadership will respond to the issue and offer a path forward, and perhaps offer an apology for using bad judgment. If there is no change, then the likely cause is poor leadership. If a company persists in their current direction, it may be because they are caught up in leading by consensus. They are trying to appease everyone, and that is impossible. They may be trying to please special interest groups that are a small fraction of their overall consumer base. Leading by consensus is not leadership, and tends to have devastating consequences. Failure to change will be kept alive in social media, will cause a drop in consumer purchase and consumer distrust. It is better for a company to admit their mistake and offer a change in course than to continue down the same beaten path.