A Solution to the Retail Apocalypse?
With the so-called “retail apocalypse” upon us, it is no surprise the retail industry now considers joining in on societal issues as a major tool to win over conscientious consumers. When it comes to taking a stand, most brands that choose a side are commonly looked at as brave, bold and more connected to customers’ needs. But what does it do for a retailer’s bottom line?
In the past few years, following some of the country’s more impactful and highly-publicized events, we’ve seen many well-known retailers make big changes to corporate practices and even inventory. Many times, the changes were the organization’s way of taking a public stand on a heavily debated societal issue, hoping it would win brand equity and help stave off the multiyear retail purge. For some, it helped the brand’s public image and social currency, but the numbers didn’t move as much as some probably had hoped.
Some believe taking such a public stand ostracizes an organization’s customer base, resulting in decreased store and e-commerce traffic. According to FleishmanHillard’s Authenticity Gap study, U.S. shoppers want better customer care (-4.0% authenticity gap), increased care of the environment (-4.4% authenticity gap) and improved employee care (-3.6% authenticity gap) – all of these are higher priorities to American shoppers than community impact. While other engaged consumers say more than a quarter (28%) of their perception of a company is based on the company’s impact on society (includes taking better care of employees, bettering the community and taking better care of the environment).
So should brands take a stand? The house is split. Fifty-three percent of engaged consumers say their views of a company are shaped by how management behaves and the impact a company has on society. But 47%, say their perceptions about a company are shaped by attributes related to companies’ products and services.
The decision to take a divisive societal stand should be taken with great care. All possible results of the move should be analyzed, shared with stakeholders and weighed against the health of the business.
Can taking a stand impact a retailer’s bottom line? Sure. But that doesn’t mean the numbers will always move in the right direction. Will the move help fight against the retail apocalypse? Probably not. Nor should it be the main factor when deciding to join a meaningful societal or political conversation.