Q&A of the Day – Companies Taking Political Stances
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Today’s Entry: I saw a poll question CBS 12 had on their website about companies taking political stances. Almost 90% taking the poll say businesses should stay out of politics. Do you think that the Bud Light debacle and Target fiasco will finally begin to swing the pendulum back the other way?
Bottom Line: I appreciate the note and after seeing it found the poll question, which came from Sinclair’s National Desk on CBS 12’s website. There may not be many issues almost all of us agree on but this one would appear to be one of them. As you mentioned the results of the poll question were overwhelming. The question was posed like this: Do you think companies should take a stance on current political issues? At the time I took the poll 4,503 people had voted. And the survey said... 13% yes and 87% no. It’s hard for a clearer message to be sent than that. And yet even after the recent Bud Light backlash and Target’s semi-mea culpa, which have resulted in combined losses now exceeding $28 billion, you still have the LA Dodgers decision to back track and honor the ever-deviant Sisters of Perpetual Indulgence at an upcoming Pride Night home game (because baseball is about celebrating sexuality after all...). A decision which led to future Hall of Fame Dodger’s pitcher Clayton Kershaw calling out the team which then added a “Christian Faith and Family Day” to their schedule. Clearly the proclivity has been for companies to take ever more provocative positions for years. But in answer to your question, will the tide finally begin to change...?
The key to all of this is of course money. It talks. The reason why Bud Light has jettisoned those responsible for the Dylan Mulvaney marketing stunt, and the reason why Target has deemphasized, and in some stores phased out, their “Pride” line of transgender clothing has come down to money. As mentioned, those decisions have already resulted in the loss of $28 billion. In recent years there’s been a bunch of research conducted on consumer behavior and values. And it’s likely that part of the reason more companies have become more provocative with pushing their political agendas comes down to research like this. A Harvard-Harris study from last year which showed that 82% of consumers prefer a brand’s values to align with their own. And research going back far further has shown, not surprisingly, that the stronger the connection we have to a brand the more likely we not only are to shop there, but also to spend more with that brand. And this is where the conversation becomes more complicated. Do 82% of Americans share the same political values? Obviously not, right?
It’s clear that brands like Bud Light and Target were pandering to attempt to cash in on the brand value game. Let’s be real for a moment. If every transexual who drinks beer were to begin to buy Bud Light how much would that really move the needle on their sales. Seriously? But by using Mulvaney to virtue signal to those on the cultural left maybe they could convince the 20% or so of Gen Z’s who identify as being on the LGBTQIA+ spectrum, that this Bud Light’s for you. Ditto Target. Let’s have our real moment here with Target. They were selling bikinis for dudes. If every dude who wants to wear a bikini were to buy it from Target how many would they sell? Seriously. Anyone, and I do mean anyone, starting with the mental midgets at Target responsible for this form of virtue signaling, who might suggest the best use of their floor space to maximize profits and shareholder value – which is the responsibility of the corporation – is/was to sell bikini’s for dudes, is lying to you. If Target can’t make more money selling almost anything else with that floor space it would be time for them to close up shop. But again, the virtue signaling by Target was a calculation that they’d not lose customers while potentially pulling in a swath of young woke consumers who might otherwise view Target as the store their parents still shop in. What’s different with both of these examples is that for a change, the percentage of the 82% who do care about a company/brand sharing their values that isn’t woke has finally taken a stand. We have research on that phenomenon too.
- 63% of consumers are willing to at least temporality break with buying from a brand over differences in values
- 39% are willing to permanently stop buying from their favorite brand over a fallout over values
What’s interesting in the Bud Light example in particular, is that we’re now seeing Bud Light’s loss of sales coming close to matching the permanent boycott figure. Last week’s sales decline was 29.5% from year ago levels. And that was heading into a hugely important Memorial Day weekend for beer sales. In answer to your question about whether the pendulum will begin to swing the other way... The answer is clearly yes at Anheuser-Busch and at least somewhat at Target. In general, though, not necessarily. I think it will begin to swing differently.
Brands like REI, North Face and to a certain extent Nike, have taken hard left political stances for years and haven’t seemingly paid a price for it. That’s in part been due to the demographics of their customers in relation to the political messages they’ve been pushing. And that’s what I think is likely to happen going forward. I think big tent brands like Bud Light and Target are less likely to be politically provocative going forward while targeted brands are likely to remain as politically active as they’ve been and perhaps even more so. Just as cultural and political differences have increasingly shaped the friends we choose to associate with, and in some cases even our own families, it’s likely that many niche and targeted brands will continue to attempt to align with those values and those differences too. But hey, at least it can’t get much worse than trying to put dudes in bikini’s...I think.