Should retailers weigh in on social or political issues?

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Yes, retailers need to take a stand.

This article was originally published in December’s Inside Retail magazine as part of RETAIL DEBATE.

Australian retailers are facing increasingly tough competition from international powerhouses, dominant local players and market disrupters. Coupled with the challenge of attracting and retaining today’s astute customer; who have a plethora of shopping options to choose from, the market has presented challenging times.

If this wasn’t enough, the polarising social and political backdrop played out online and in the media, leaves a dividing movement only a couple of clicks’ away. With issues such as marriage equality, climate change, the Trump administration and asylum seekers at bay, our community are faced with concerns on each and every screen.

In this challenging environment, what role should a retail business play in the social and political arena?

Whether or not to weigh into social affairs is a conscious decision that every business must make; the rewards are high but so are the risks if not done with careful consideration. The decision should be made with strategic intent, and ultimately align back to their brand values and beliefs. In some cases sitting on the fence poses a much larger risk than weighing in, as the brand may be seen to have no heart or purpose. The customer may become indifferent, or worse, boycott and turn to a competitor with a voice.

According to recent research from public relations firm Edelman, 57% of consumers are more likely to buy from (or just as equally boycott) a brand where they agree or disagree with its social or political views. In addition, 57% of belief-driven buyers will not buy from a brand when it stays silent on an issue they feel it has an obligation to address.

Why? Customers want to buy from brands they connect with. The majority of Millennials, our future customers and leaders, are belief-driven buyers. In addition, the top quartile of earners over-index as belief-driven buyers. Customers who believe in the brand they are buying from will pay more, be loyal advocates, and purchase purely on a brand’s’ standpoint on a certain topic.

The customer is buying into something bigger than just the functional benefits or a product or service (price, convenience). They may be buying into a brand that gives them a sense of confidence in the future, that protects the environment or gives back to the community, or that helps them stand out in the crowd. Whatever the reason, it’s important for the retailer to understand this, and act accordingly. To not only to recognise a customer’s view of the brand’s role in society, but to also consistently deliver on this perception.

For brands who take a social or political standpoint, they can easily find common ground with the customer, as well as demonstrating authenticity and transparency — two factors which have been of rising importance this year.

Done well, a sound opinion on an issue humanises the brand, increases customer and employee connection, and ultimately drives revenue. One of the best examples is AirBnB and the vocal stance taken on diversity with the line “acceptance starts with all of us.” Inadvertently criticising Trump.

On the flip side, done badly or insincerely, fires are sparked. The Pepsi/Kendall Jenner catastrophe is an example of this. However, although the backlash ran for weeks, interestingly following the incident a survey asked Americans how their perception of Pepsi had changed after watching the advert. 44% of people had a more favourable view of Pepsi after watching the ad, while only 25% had a less favourable view. The survey also revealed that 32% of respondents said the ad made them more likely to buy Pepsi products, whereas 20% who were less likely. With these findings, it’s apparent we are in polarising times that can be difficult to navigate.

If a decision is made to weigh in on a political or social issue; the key questions to consider are;

1. Does the commentary align with your brand beliefs and values?

Understand what you stand for, and ensure any standpoint or commentary reflects this.

2. Is it a stance that you want to make known externally, or is it best communicated internally? 

Do the research on the topic, and be measured in your approach.

3. Will your audience expect this, and be receptive? Is the messaging authentic?

With the amount of data and our ability to draw insights to predict customer behaviour, what’s missing is the context. One of the easiest ways to understand this is to speak with them and sound out your commentary.

4. Will it offend? 

Racist, sexist or anti-LGBTQ commentary is not acceptable. Even when a brand is non-offensive in its commentary, respect must be shown to the other side of the argument.

Prior to joining in on any conversation, it’s vital that time is taken to think through the response. What is more risky, is simply ignoring the call to respond.

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Image credit: Nendo x COS at Salone del Mobile

Emma SharleyComment