LULU GARCIA-NAVARRO, HOST:
There's been a backlash against Home Depot after its retired billionaire co-founder said he'd donate to President Trump's reelection campaign. A boycott was then launched on social media. Trump criticized the boycotters, calling them vicious and totally crazed in a tweet. Yet, he himself often deploys boycotts. Last month, he floated the idea of an AT&T boycott as a way to put pressure on CNN. He's not a fan of the network's reporting.
Companies and brands face intense pressure these days from the right and the left over social and political issues. Starbucks, Chick-fil-A, Hobby Lobby have all had at least one #boycott. We wanted to get a sense of how effective these consumer campaigns really are. And so joining us now is Americus Reed II. He's a professor of marketing at the Wharton School of Business.
AMERICUS REED II: I appreciate it - great to be here.
GARCIA-NAVARRO: So for companies and brands, how damaging are these kinds of social media-led boycotts? Are there any long-term effects?
REED II: Well, for short-term effects, there are quite a few. They're little blips in the radar when brands have these crises. The long-term effects are much less prevalent because it's - these sorts of things just don't last that long.
GARCIA-NAVARRO: Yeah. I mean, Nike, I think, had a 3% drop initially when there was a backlash over its signing of Colin Kaepernick. But they're doing well now, right?
REED II: Oh, absolutely. They're playing the long game. They've made the decision that, we are going to invest in the brand. And we are going to tell the world these are our values. And you're either with us. Or if you're not with us, that's fine as well. But we're going to be very clear as Nike, speaking to the consumers, that, this is what we stand for. Jump on board or not.
GARCIA-NAVARRO: I guess what I'm hearing you say is that brands target their marketing maybe to specific groups. So they decide to talk to certain people and not to others.
REED II: And that's 100% correct. Mass marketing is out the door, Lulu. Right now, what we, as marketers, do is target marketing. For example, with Nike, we're going to say, hey. We're OK if you burn our shoes. We're OK if you, you know, express moral outrage on Twitter. We believe that there are enough consumers out there who stand behind these same values, that they're going to frequent and buy our stuff. And we're going to, essentially, you know, go after them. And we're OK with losing people who might not agree with that political ideology. That's a very bold thing to do, by the way.
GARCIA-NAVARRO: That's what I was about to say. Is it a gamble that's paid off?
REED II: It's a huge gamble. And by the way, don't bet against Nike. For them, this is win-win. They get to actually make a value statement, be a very powerful brand and, perhaps, align themselves with the younger generation's Muhammad Ali.
GARCIA-NAVARRO: And just finally, what hasn't worked? What have you seen sort of flop when companies try and wade in these very turbulent waters?
REED II: Yeah. I think you mentioned Chick-Fil-A in your intro, Lulu. That's a great example. S. Truett Cathy basically stepped out there and said, hey. I believe marriage is between a man and a woman. We have very strong Christian values. We are closed on Sundays - yada, yada, yada. And what they realized, when they took a closer look at the economics, Lulu - was to realize that - wait a minute - the LGBTQ community has almost $1 trillion in disposable income. And they had the quick realization - the aha moment that, well, that's a lot of chicken. And do we really want to kind of impose our values when we could be talking to that community? And they made a quick decision to say, hey. We're not going to back off of our Christian values, but we do want to sell chicken to the LGBT community because it doesn't make sense to take that off the table because our Christian values don't really have anything to do with the chicken. And so they backed off of that statement. And now everybody's happy.
By the way, they're killing it. They are one of the top fast-food, quick-service restaurant companies out there. They're crushing KFC. But they made a decision to not get involved in the political ideology, and it has paid off for them as well.
GARCIA-NAVARRO: That's Americus Reed II, a brand identity theorist and a professor of marketing at the Wharton School of Business.
Thank you so much.
REED II: I appreciate it, Lulu. Thank you very much.
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