retail news in context, analysis with attitude

The Harvard Business Review has a good piece about how businesses, which used to shy away from the issues of the day as well political activism and advocacy because of concerns that any sort of public posturing would alienate a sizable percentage of their customers, now are embracing the opportunity to take up causes - in part because they have to, and in part because it is in synch with their brand identities.

"The change started with the corporate social responsibility movement of the 1980s, when more companies began considering the impact their practices had on society and the environment," the Harvard Business Review writes.  "There was advocacy, but it was about products and processes, not politics. No one could take umbrage at a company that produced hormone- or BPA-free products or whose supply chain banned firms that employed abusive labor procedures. These were rooted in ethics as opposed to political ideologies."

And it isn't just on one side of the aisle or the other:

"As society became politically polarized, companies became more activist. With a 24-hour news cycle and social media fanning polarization, it’s more problematic for organizations and their CEOs to remain neutral. Consider what’s happened in the past decade: Hobby Lobby — a chain of craft stores that challenged a federal mandate stating companies pay for insurance coverage for contraception — took their case all the way to the Supreme Court and won. Nike featured the controversial athlete and social crusader, Colin Kaepernick, in an ad campaign. Retailers like Walmart and Dick’s Sporting Goods stopped selling certain weapons in response to tragic mass shootings nationwide."

That's not to say that all people view political activity the same way.

In a survey, the Harvard Business Review presented a fictional case of a company taking political positions - but half the participants were told that they were conservative positions, and half were told that the company was liberal.

"Participants who were told the company had conservative values viewed it in a significantly worse light. Their opinion of Jones Corps dropped 33%. The company was not only seen as less committed to social responsibility and its community, but also as less profitable. Participants were 25.9% less likely to buy its products and 25.3% more likely to buy from a competitor. In addition, job seekers were 43.9% less likely to apply for a position there.

"Because conservative activity was viewed so poorly, the reverse seemed likely for liberal activity. That wasn’t the case. Participants who were told the company had liberal values viewed it as neither good nor bad. There was no significant change in any opinions or intended behaviors."

Also interesting, the Harvard Business Review wrote, was a general lack of cynicism about these political positions:

"We asked participants whether political advocacy was genuinely held by companies — our fictitious one, as well as a few real-world examples — or whether it was designed to build loyalty among like-minded customers. We thought the answers would be mutually exclusive — that advocacy would be viewed as either genuinely held or designed to build loyalty. But overall the political beliefs of companies were seen to be both genuinely held and designed to build loyalty by the majority of participants.

Overall, these results reveal a societal shift about what is and is not acceptable for companies to endorse.

"The fact that participants viewed engaging in liberal advocacy as neither good nor bad suggests that they thought doing so was merely normal business.  This lack of cynicism, frankly, perplexed us. We live in an age where trust in fundamental institutions — be they church, state, or business — is steadily waning, especially among millennials (which was 75% of the sample).

"Perhaps this can be explained by our supposition that political advocacy has been absorbed to the extent that it is seen as a natural extension of a business model. Further, participants generally acknowledged that political advocacy is both a way for companies to connect with customers and promote their brand. Using advocacy to advertise to target audiences isn’t seen as manipulative pandering. Rather, it’s seen as common practice."

You can read the HBR analysis here.

https://hbr.org/2020/02/how-do-consumers-feel-when-companies-get-political

KC's View:

I do think that companies have to be somewhat calculated about how they embrace issues.  Not cynical, but calculated in that they need to know that the positions they take are in synch with their brands and their core customers.  Also transparent - and willing to accept the fact that sometimes they are going to lose customers as a result.