Why Consumer Boycotts Fail
Do boycotts really work?
Most boycotts have a narrow shelf life because people lose interest
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.
Short-Term Boycotts Can Have a Long-Term Impact
Consumers can decide to stop purchasing products or services from a specific company because they disagree with a new policy. But many people also have fickle commitments, so most boycotts don't last very long. However, if the goal is to create a negative financial impact and the movement is widespread, a boycott can result in the loss of billions of dollars in sales.
Poll Question
The Real Purpose of Boycotts
The goal of a boycott usually has a two-fold purpose. The first is to create awareness about a company's unpopular 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 protest signs. 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.
Gender Self-Identification in Public Restrooms
In April 2016, a national retailer announced a new bathroom policy for their 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 'our stores'."
The retailer boldly decided that a person's gender identity was more important than the gender or physiology they were born into. Gender identity had become more important than the safety of women and children that use the retailer’s restrooms or fitting rooms.
The retail stores could have built separate bathroom facilities which could have created a positive PR campaign around the decision. However, the organization remained steadfast about their inclusive gender identity policy, and minimized the fear that women expressed about sharing a bathroom with men.
Boycotts can reduce revenue by billions of dollars
I have boycotted this retail company since they announced this policy and have not spent a penny since April 2016. I believe strongly that women and children should not be forced to share the restroom or fitting rooms with men. Many other consumers joined the boycott, and by March 2017, the company had lost $15 billion in revenue.
Politics and Retail: Nordstrom's Customers Versus the Trump Brand
After Donald Trump was elected President, people who 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 removed the Ivanka brand from their inventory.
Nordstrom did remove the Ivanka inventory but claimed 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.”
How Executives Can Respond to Boycotts
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.
When leaders fail to understand their customers' needs or care about how they are doing in a tough economy, they deserve to fail. Hiring refugees may have sounded like a good idea, but turning a deaf ear to the communities that support your brand is a bad idea.
Uber Riders Delete the App
Uber managed to create a series of issues that produced a thousand paper cuts. However, for this article, I will focus on the issue 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. However, when Uber riders noticed the surge in pricing, they chose other forms of transportation.
Either Uber leadership didn't understand customers' preference for Uber drivers over taxi drivers, or they failed to understand that their riders would be angry when they learned the truth about surge pricing.
Uber riders felt like they had been taken advantage of, and they were angry. A hashtag, #DeleteUber, was created 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 advantage because the rider can view the trip on the driver's phone or their smartphone or tablet. Before the days of smartphones and mobile apps, a taxi driver could literally take a rider out of their way if the rider wasn't familiar with the area.
The Reason Boycotts Quickly Fizzle Out
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.
Leading By Consensus Does Not Work
Leading by consensus is not leadership, and can have devastating consequences. If a company remains tone-deaf and persists in the current direction, they will learn about the consequences.
It is impossible to appease everyone. Trying to please special interest groups that are a small fraction of their overall consumer base is not an effective strategy. It is better for a company to admit their mistake and offer to change course rather than to continue in the same direction.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2017 Michelle Orelup
