The Politics of Pocketbooks: The Increasing Pressure of Brands to Take a Stance on Social and Political Issues

By Ann-Renee Rubia

Nike. Patagonia.  Ben & Jerry’s. Goya. Many of our nation’s most recognizable corporate brands are becoming increasingly vocal about social and political issues, taking public stances on contentious topics such as racism, environmentalism, criminal justice reform, and the 2020 election. These developments are a significant departure from the past, when brands were more reluctant to wade into debates over social or political issues for fear of alienating customers. In recent years however, customers are pressuring brands to take sides on many divisive issues. This politicization of consumer purchases reflects not only an increasingly polarized country, but a shift in consumers favoring morally-conscious brands. Corporate values and morals accompanied with sincere actions such as donating to organizations that contribute to social causes have become the new metric for customer loyalty.

More Americans are wielding the power of their pocketbooks to reward companies that align with their views and punish companies which don’t.  According to a 2018 study, 59% of consumers in the United States will buy or boycott a brand solely because of its position on a social or political issue — a staggering 12% increase compared to the previous year. 

One example of this phenomenon is Nike’s decision to feature the controversial NFL player Colin Kaepernick in a 2018 advertisement; in response, many Americans jumped on social media to post pictures of themselves burning their Nike sneakers and other products from the well-known sports brand. Despite the backlash, Nike’s sales went up 31%, and shares for the company went up 5% or $6 billion in market value three weeks later.  Their new advertising strategy paid off; in return for the negligible loss of outraging some customers into boycotting Nike, they found a new market of morally-conscious purchasers who rewarded Nike for the company’s activism.  In addition to consumer behavior, companies such as Goya and Goodyear have been reeled into political strife in light of the 2020 election by endorsing the competing candidates, thereby affecting the company’s sales and public opinion.

What has caused this shift in consumer-company dynamics? According to Edelman, a global public relations and marketing consulting firm, growing mistrust in the government is a possible reason.  The survey of 8,000 people finds that consumers believe that brands are a more powerful force for societal change than government. Additionally, 54% believe it is easier for people to get brands to address social problems than to convince the government to act. Richard Edelman, CEO and president of the company, calls this the birth of “brand democracy,” stating that “Consumers are not just voting in elections, they are voting at the stores by choosing brands aligned with their values.” Overall, the public has more confidence in corporations and brands to enact change socially and politically. 

While today’s consumers view a company’s values as salient, brands are expected to do more than to simply speak out on issues. It is not only important for companies to articulate their position on issues, but to also address these issues appropriately. After the outcry over George Floyd’s death in May and the resurgence of Black Lives Matter protests throughout the country, many companies were called to denounce systemic racism and commit to real action to end it. For example, the fashionable clothing company Anthropologie was chided after posting a photo of a Maya Angelou quote along with a generic statement about racism on their Instagram. Many commenters promptly questioned the sincerity of the company’s actions, asking if the company made any donations supporting the end of systemic racism. Now, companies are being told to open their purse and put their money where their mouth is.  

The traditional consumer-company relationship is evolving with the politics and moral values of an increasingly divided country. Consumers and marketers are pushing corporations to go beyond their classic business interests to become advocates for specific political causes in order to elicit more sales. For better or worse, corporations are stepping into the political sphere, as Americans are becoming more emboldened in their beliefs and more willing to use their wallets to express them.

 

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