Business & Customers

New York Times

FEBRUARY 7, 2017

When Do Consumer Boycotts Work?

INTRODUCTION

Last week, protesters gathered outside Uber’s offices in New York. Brendan McDermid/Reuters

Uber, Starbucks, Budweiser. These are just a few of the brands that have faced consumer boycotts for taking supposedly political stances in the past few weeks. Still, it is unclear whether most of these boycotts will negatively affect sales or change company policy.

When does “voting with your wallet” work?

DEBATERS

Social Media Boycotts Succeed When They Reflect a Movement

AMERICUS REED

Americus Reed  is the Whitney M. Young Jr. professor of marketing at the University of Pennsylvania's Wharton School of Business. He is on  Twitter (@amreed2).

Boy, oh boycotts! Do they work?

Trick question. It  all depends  on what you mean by "work."

If the aim is to hurt company sales, boycotts rarely succeed. But if the aim is to undermine companies that stand in the way of a movement, there is a greater chance that a boycott may tarnish a brand.

To get a boycott off the ground, awareness and consideration of the issue must spread. Intent to boycott must be followed up by action. Finally, once a boycott is underway, the leaders of it must find ways to sustain the effort.

That can be hard, considering the number of people involved in a boycott inevitably decreases over time.

Mostly, that's because people have busy lives and plenty of their own personal problems. News of a boycott has to cut through the personal. It has to withstand the constantly changing streams of information on the internet to truly gain traction. And memory fades fast. The accelerated 24-hour news cycle has become a sort of Catch-22 for boycotts: Social media can be very useful for spreading awareness of a boycott — but the hourly nature of the news cycle can bury it within the next day or week.

Even if a boycott stays in the news, strong opinions are not the same as action. It’s always easier for someone to express outrage than inconvenience him or herself. In a world where everyone is a one man/one woman P.R. department on social media platforms like Facebook, Instagram and Twitter, “moral peacocking” — outrage on social media that is not combined with action — becomes convenient and costless.

Outrage comes and goes, and so do boycotts. Companies may suffer short sales dips, but social media boycotts seldom hurt the business bottom line of organizations in the long run.

However, there is a very strong exception. If the ultimate source of a boycott is constantly featured in the 24-hour news cycle — say, because he is president of the United States — and continues to engage in controversial and outrageous behavior, the boycott has an increased chance of living beyond its usual few days.

If the boycott reflects a movement — rather than a moment — it can change the world around it.

Boycotts Force Corporations to Confront Consumer Ideals

JUDITH SAMUELSON

Judith Samuelson  is the founder and executive director of the Aspen Institute's  business and society program . She is on  Twitter (@JudySamuelson).

In the book "The Naked Corporation," Don Tapscott and David Ticoll examine novel business risks that have popped up with the internet. The democratization of free information and rise of social media means business practices can be discovered and scrutinized on a much wider scale.

“You're going to be naked,” the authors warn businesses, “so you'd better be buff.”

At a minimum, that means considering customers and employees beyond tomorrow's profit margin.

As people take to the streets to protest the actions of the new president, C.E.O.s of corporations are being challenged to take a stand — something many have been reluctant to do in the face of market pressures to keep one's head down and focus on the numbers.

But for some businesses, taking a stand is good for the brand. Tech C.E.O.s are  speaking out   forcefully against the visa ban because they depend on the best skills and talent, no matter the nationality. Other tech employees may believe it is morally wrong to turn away refugees and legal residents — or, at least they are confident that their customers feel that way. There’s safety in numbers of course, and its best when corporations can articulate why an issue matters to their business bottom line.

Still, cultivating positive brand identity has become undoubtedly important for consumer-facing companies. Take #DeleteUber. The real aim of the boycott that went viral seemed to be to punish a business — for placing profit over community and/or for appearing to support President Trump's refugee ban on seven Muslim-majority countries. The boycott could not reverse President Trump's executive order, but it did cause Uber’s C.E.O. to drop out of President Trump’s business council.

The power and speed of social media has allowed campaigns to evolve from focusing on the consequences of a product — like the legendary Nestlé infant formula boycott in the 1970s — to labor-related issues that are within the control of the corporation. From there, they have spread to include more complex global concerns like child labor and climate change. Boycotts over an issue like deforestation could require a radical kind of agency from a company if it had to disrupt its entire supply chain to make real progress.

But some companies see real market advantages in this consumer trend. Levi Strauss and Starbucks, for example, have gotten out ahead on issues like H.I.V./Aids and water scarcity to help cultivate positive brand identity. They didn't wait for a protest or boycott: They took a preemptive moral stance.

For mass market brands, like Pepsi and McDonalds, that road can be more treacherous. Still, to address consumer demands — often articulated by a sophisticated NGO working to corral public opinion — companies typically tie their brand to big social issues, like human rights. These initiatives can require real changes for companies, however, including a change in how they source their products.

The challenge today for all corporations is clear: Citizens are looking for leadership on issues of real consequence. These issues are no longer confined to the ballot box. And consumers are aligning their dollars with their ideals.

The answer for businesses may require new forms of association in which courageous C.E.O.s can stand up and be counted.

There is a challenge for consumers, too. They must distinguish between the companies that truly push positive social change and those that just pay lip service to it.

APA Citation

Reed, A. & Samuelson, J. (2017, February 7). When do consumer boycotts work? [digital article]. New York Times. Retrieved from https://www.nytimes.com/roomfordebate/2017/02/07/when-do-consumer-boycotts-work