Retail, like much of the rest of corporate America, is entering an era of corporate political activism. In the wake of last week’s seizure of the Capitol building in Washington, DC by pro-Trump supporters, Fortune 500 heavyweights are now weighing in. JP Morgan Chase and Goldman Sachs are pausing all political contributions to both Republicans and Democrats for the next six months while others, such as the Blue Cross and Blue Shield Association are going a step further by are suspending political contributions to all lawmakers who objected to the certification of the electoral college results. Best Buy will also cut off campaign donations to the Republicans in Congress who objected to counting all of the electoral votes for the presidential election. And according to Reuters, other corporations making similar promises this week include Dow Inc., AT&T Inc., American Express, Airbnb Inc., Hallmark and Mastercard.
[callout]A corporate Chief Geopolitical Officer would ensure that corporate external messaging, HR communications, supply chain and affiliate ethical due diligence, branding, political contributions and philanthropy were all aligned around a coherent set of ideologies.[/callout]
Twitter’s recent decision to put a lifetime gag order on President Trump, suspending his @realdonaldtrump account, the sixth most followed Twitter handle in the world was an overtly political decision no matter how the company characterized the move.
All of this comes on the heels of increased consumer activism. No longer able to stay above the political fray, many consumers – particularly millennials and Gen Z –often choose where to spend their income based on philosophical and ideological alignment with or against a company’s public stances on the most salient political issues of the day.
The Irrevocable Wake-Up Call
Obviously, it wasn’t always this way. The permafrost that traditionally kept major U.S. consumer brands and retailers from interjecting themselves into the social and political movements of the day have been on a steady thaw ever since the 1980s, when reports began trickling into the news cycles that certain brands were engaging in variety of tawdry practices, from relying on overseas factories that used child labor, to manufacturers that were wantonly polluting freshwater lakes and rivers. These news reports stoked public outcry, forcing CEOs and their boards to begin assessing the impact that company policies were having on human welfare and the environment – even if the immediate impact was halfway around the world. This move towards “corporate social responsibility” was proudly reflected in glossy new sections within company annual reports, dedicated to the themes of corporate responsibility, sustainability, and “giving back.” And this was how it was until the mid-2010s – almost always more about products, processes and corporate ethics than it was about politics per se.
The election of Donald Trump as President in 2016, of course, was a breaking point and changed everything. Suddenly, there was highly divisive figure on the main stage, dominating nearly every 24-hour news cycle, prodding political tribalism in a way America hadn’t seen in over a century. Brands like Nike were among the first to really lean into social justice issues, such as a 2018 equality campaign featuring high profile TV spots with black-listed NFL Quarterback Colin Kaepernick. Nike’s bet paid off in a big way – both financially as well as the kudos it received from much of the public – and in doing so, laid track for others to dip their toes into political hot-button issues. Walmart and Dick’s Sporting Goods announced they were stopping the sale of AR15-style firearms following a mass shooting in Parkland, Florida. Patagonia doubled down on its stance on the environment and climate change. Soon, it seemed, many of the most well-known brands – everyone from Levi’s to Starbucks – were taking a stand on something overtly political.
Conflict of Interests
The challenge, of course, is that no major brand or retailer – especially those with a vast physical footprint – has a revenue model that was ever designed to sell to only half (or even 70 percent) of its customer base. The move towards political activism begged a question that has vexed many CEOs and corporate boards: How can big brands navigate the dangerous political terrain and beyond without losing customers who are increasingly looking for like-minded corporate citizens in the brands they support?
The leaders of many consumer-facing businesses had hoped this was just a phase – a reflection of the highly contentious Trump era, a temporary fix for a nation at edge. For big brands and retailers, staking out political stances is an uncomfortable exercise. Oftentimes, boards and CEOs may harbor personal political ideologies at odds with where its consumers would like to see the company positioned. Consumer backlash from betting on the wrong horse or turning off too many on the opposite side of an issue is always a risk, as well.
But then came 2020 – a year of political, economic, and social upheaval unlike anything we have seen in, well, since ever. As an already highly divisive national political environment collided with an emboldened Black Lives Matter movement and a global pandemic, big brands had no choice but to begin to take sides. Lily Zheng, writing in The Harvard Business Review, summed it up: “Consumers and employees are now looking for more than Corporate Social Responsibility — they’re looking for […] Corporate Social Justice.”
This much is now clear: Brands that opt to stay mum on major progressive social issues risk endangering their foothold with younger and urban consumers who will, at best, label such brands as “inauthentic,” and at worse, will call for accountability. The reality is that leaning in on particular social issues is now a requirement for all big brands, including retailers. But doing so adroitly takes focus, political savvy, marketing and communications chops, and a certain degree of cultural wokeness.
Social Justice as Table Stakes
I’m not sure anyone knows exactly what will unfold with the emerging Corporate Social Justice Movement, but I feel I am qualified to venture a few educated guesses. For nearly a decade I worked alongside former New York City Mayor Mike Bloomberg as his senior media and political adviser, a period on my CV that was bracketed by experiences in both banking, media, and retail. And this is what I think, based on experience navigating all sides of flashpoint issues:
- The era of the politically neutral brand is over. Sali Christeson, CEO of women’s workwear brand Argent, which has dressed bold name pols like Hillary Clinton and Kamala Harris, told Modern Retail that the notion that retailers should keep out of the politics fray has died: “These days, if you’re not clear on your social stance, it comes across as inauthentic to shoppers.”
- If you are going lean in, lean carefully. Hobby Lobby, the arts-and-crafts store led by its arch conservative founder and CEO David Green has continually run into hot water ever since he started the chain back in the early 1970s. Hobby Lobby has endured countless scandals stemming from Green’s pushing his religious and political beliefs onto company employees – and customers – across its 900 stores nationwide. But Green’s retail chain is not alone; brands such as In-N-Out Burger, Alaska Air, Chick-fil-A, and even Forever21 (before its assets were sold off in a restructuring in 2020) have all proudly embedded their conservative and religious values into their product marketing, HR policies and branding. It takes courage to take a stand, and a best bet is to be sensitive to all your customers and enable an open, non-judgmental two-way conversation.
These examples notwithstanding, a 2020 Harvard Business School research study found that, on average, young, self-identified progressives are far more likely to avoid or turn on a brand that embraces conservative values, while interestingly, self-identified conservatives are less likely to do the same with companies that embrace progressive values. It seems that conservative shoppers are far less likely than progressives to take a company’s politics into account when deciding where to spend their dollars. Know your customers and play fair.
- For consumer-facing brands, it’s time for a new major role in the C-Suite: the Chief Geopolitical Officer. Several major advisory firms, such as KPMG, recognize that “global companies are assumed political entities and CEOs de-facto political players” and recommend the appointment of “Chief Geopolitical Officer” – a “member of the senior leadership team with single-point accountability for managing the impact of politics on the company’s business interests.”
Yet, still too often, corporate boards wrongly assign the responsibility of managing a firm’s portfolio of political issues to the CEO; such a complex yet critical function – figuring out a company’s explicit global political positions – gets far less attention than it deserves in the lap of the CEO. Moreover, while jockeying for any top CEO job certainly requires a certain amount of political savvy, determining a firm’s external political policy is an entirely different set of skills, which is why oftentimes political issues become hot potatoes that get tossed around among the CMO, corporate communications, the DEI czar, and perhaps the person in charge of government or public affairs, precisely because driving a company’s consumer-facing political agenda is not exactly a neat fit for any of these roles.
The job description of a corporate Chief Geopolitical Officer is fairly straightforward: aligning internal corporate values with the external politics of the day. She or he would ensure that corporate external messaging, HR communications, supply chain and affiliate ethical due diligence, branding, political contributions and philanthropy were all aligned around a coherent set of ideologies.
A few companies have addressed the challenge by hiring people that come out of politics and placing them in one of the more traditional C-Suite roles. Zenia Mucha, Disney’s Senior Executive Vice President and Chief Communications Officer, began her career as a director of communications and senior policy advisor to New York State Governor George Pataki and before that, New York senator Alfonse D’Amato. Ed Skyler, Citibank’s Executive Vice President and Head of Global Public Affairs, was a former New York City Deputy Mayor during the Bloomberg years. Jill Hazelbaker, who had served as Senator John McCain\’s National Communications Director and Chief Spokesperson during his 2009 Presidential campaign, is now Uber’s Senior Vice President of Marketing and Public Affairs.
If You Don’t Take a Stand, They’ll Take It for You
We are living in a new era of which one of its most strident hallmarks is that of the politically “woke” consumer. Big Retail has no choice to but to take it to heart and embrace this new reality of what it means to be a brand in 2021 and beyond.