Although we often get mad at big corporations for one reason or another, it's pretty incredible what LOTS of mad consumers can do to force corporations to change their ways. However, sometimes corporate actions can have completely unforeseen impacts, and it's not always on the side that you'd expect.
Many people expect that boycotts are initiated by liberal/left-wing groups, and while that is sometimes the case, it isn't always true. We tend to think of Socially Responsible Investing as primarily action for causes that are glorified by left-wing groups: climate change, LBGTQ rights, feminism, racial equality, carbon-free investing, non-GMO products, etc. However, on the opposite end of the spectrum, there are also consumers who seek to alter the market through direct action. This could be deemed as "impact" investing or "worldview" investing, as the action seeks to alter the marketplace to reflect a widely held concern or view.
"Everyone deserves to feel like they belong,...and you'll always be accepted, respected and welcomed at Target."
Last April, the company published a blog post that publicized a general policy at Target stores that said any and all transgender shoppers were welcome to use whichever bathroom or fitting room happened to match their gender identity. It was during a peak national debate about gender-neutral bathrooms, and Target thought it was jumping on the bandwagon by making this policy publically know...however they ended up shooting themselves in the foot.
As it turns out, the CEO, Brian Cornell, never approved the publication of this post, and would not have approved it had he known it was scheduled to be made public. The reason being that choosing to "flaunt" a policy that makes less than half of your customers happy, and more than half angry, is a very bad idea indeed. And he was right: the company ended up alienating the concerns of more than half of their national customers base in order to be "topical" and reacting to current events without much thought.
Following the blog post publication, shopper traffic and same-store sales declined for the first time in years. Critics of the company's policy favoring transgenders said it opened the door for sexual predators to harass women and children inside Target's bathrooms and dressing rooms. More than 1.4 million shoppers signed a pledge that they would boycott Target until managementdecided to reverse the policy. Target spent around $20 million to install single-occupancy bathrooms in all of its stores in order to appease critics and also not alienate transgender shoppers and their supporters.
Nevertheless, in the three quarters following the blog post, sales fell by 6% over the same time-frame a year earlier and same-store sales declined each consecutive quarter following the "flaunting" of this policy. The CEO publicly stated that even though he didn't approve the post, he still stands with the policy and its message.
With an issue this controversial, perhaps it would have been wise for Target to keep its mouth shut (as the CEO wanted to do), but many companies feel the need to address topical, public issues in order to make themselves appear relevant and to engage the consumer.
In my humble opinion, compromise is the key word in all controversies: you will do yourself no favor in the long term trying to appease one side and alienating the concerns of the other...especially if you're a company as big as Target.
What are your thoughts on the issue? We'd love to hear from you so share them in the comments below.
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