Just how involved should a fashion or retail chief executive officer get in politics these days?
With the social media backlash over everything from Under Armour ceo Kevin Plank’s support of President Trump’s pro-American stance to Nordstrom dropping Ivanka Trump’s line because of poor performance, ceos are finding themselves — and their companies — under fire for their political positions, even if those stances aren’t firmly in favor of all of the president’s policies.
And where most major companies have long had crisis-management plans in place for natural disasters or other things that could impact their operations or brand, experts say retailers and fashion firms now need full-time political strategy teams to figure out how to handle the disruptions of the unpredictable Trump Administration. The consensus is ceos should be prepared with a very clear point of view because it’s possible they’ll be dragged into the fray even if they may not want to be.
“I think the pressure is just going to ratchet up on ceos to be speaking out as leaders. Some of them will find the right tone and the right voice. It’s got to be a balancing act,” said Sydney Finkelstein, professor of management and leadership at the Tuck School of Business at Dartmouth College and author of “Superbosses.”
Finkelstein believes that ceos can’t live in fear of being the subject of one of Trump’s tweets or the victim of a boycott. “You have to do the right thing for your employees, your customers and your shareholders,” he said.
Rick Helfenbein, president and ceo of the American Apparel & Footwear Association, addressed the need for ceos to be proactive.
“The Founding Fathers put the First Amendment as number one for a good reason. In a democracy, everyone first owns the ability to maintain their right to express opinions. However, in the current political environment, as a fashion ceo that act of expression is easier said than done. What a President or First Lady wore used to set a trend for our fashion industry. Now we are afraid to align with one person or one party for fear of any criticism that could ultimately affect our brand, or impact our bottom line,” said Helfenbein. He said that the AAFA has been inundated with calls the last few months, encouraging AAFA to be vocal on a number of issues.
“Whether it’s NAFTA, China, Mexico, or trade in general, our phone continues to ring. Probably the most prominent issue right now is the concept of a border adjustability tax, which is a measure proposed by House Republicans, as part of a larger blueprint called ‘A Better Way,'” said Helfenbein, who added that a BAT would have significant adverse impacts on the fashion industry. As a result, AAFA has joined with a larger group of associations to highlight the damage a BAT would cause. The National Retail Federation also is speaking out against it, including with TV ads aimed at consumers to highlight how much extra it would cost the average shopper.
He noted that no matter what one’s beliefs are, no one wants to become a tweet target. “It’s just not good for business,” he said. “Our $380 billion apparel and footwear juggernaut does carry significant weight in Washington as we all work to express our issues in the public domain. We must continue to make every effort to better protect and grow the four million industry jobs that we all represent,” he said.
When it comes to tweets, some people believe that Trump went overboard in calling out Nordstrom.
“If the product was selling, these guys [Nordstrom] wouldn’t give a damn,” said one industry source, who requested anonymity. “Retailers, by and large, don’t make decisions like this for political purposes. Their job is not to think what their consumers’ political philosophies [are]. Their job is to provide an assortment of products that they believe their consumers will like.” The source noted that the Nordstroms aren’t controversial. “They are merchants, and they’d take the heat. Who in the world would get rid of this product when 50 percent [of the country] voted for Donald Trump and 50 percent voted for Hillary [Clinton]?” he said.
A more active and politically engaged shopper who votes with her dollar is also impacting spending online as well as in stores. Every weekend since the women’s march has featured some form of protest, which includes demonstrations against the so-called ban on Muslims to defunding Planned Parenthood.
Mike Catania, chief technology officer of PromotionCode.org, said against a normalized baseline such as holidays and economic factors, the women’s march on Jan. 21 “caused a 14 percent drop from female shoppers online that day and 8 percent of male shoppers.”
“That drop might not seem huge, but it’s on par with Easter, a notoriously low-shopping day,” Catania explained. “For reference, although not a protest, the day after the election (in the heart of holiday shopping), we saw a year-over-year drop of 12 percent that was unable to be attributed to anything other than the election results — and took eight days to fully rebound.”
Chris Allieri, principal of Mulberry & Astor, a marketing and communications consultancy, said the age of consumer activism is just beginning. “While we see the president weighing in on Nordstrom, we will likely see more of that in the weeks and months to come,” he noted.
“I think that consumer awareness of brands that stand for something, invest in the community and are good employers will be rewarded,” Allieri said. “This isn’t about ceos tweeting with the president, but rather what do these brands stand for? A brand’s actions and behavior — including what their ceos say and do — is more and more public. Brands are being thrust into the political debate, sometimes reluctantly.”
Allieri said companies that take bold actions such as Starbucks’ call to hire 10,000 refugees globally, “will be rewarded by their brand loyalists, and potentially bring out new believers. Regardless if Nordstrom, TJX, Burlington or Neiman Marcus made their decisions for purely financial reasons, I think that they will see an uptick of support from those opposed to the president.”
Some consultants feel not taking sides is the best policy. “It’s expedient in today’s climate to be neutral. I think there’s a convergence of different things that are going on that I’ve never experienced, nor probably most other people. Whether you like Trump or you don’t like Trump, this is a country that needs to work together. It’s not about the goals of the political parties,” said Andrew Jassin, managing director of Jassin Consulting. “People need to be smart enough in today’s world with what’s going on, to not express it outwardly, unless they can deal with the consequences or the opposite side of their view.”
Jassin suggested that perhaps Ivanka Trump should have said that she would donate all her royalties from her clothing and accessories line to charity.
“Right now there’s no tolerance for an opposing point of view from either side,” agreed Bud Konheim, ceo of Nicole Miller. “What it does is create an adversarial feeling out there or a hate-filled feeling, and that is not conducive to shopping. It’s not conducive to having fun with clothes,” he said.
Industry expert Matthew Rubel suggested companies have a mission, a vision and a value system that’s clearly articulated. “Having that and not stepping out of that will enable you to be an advocate in today’s world without becoming political,” he said. His advice is to realize that this is real. “This is not a passing thing, but would be a growing thing…public company ceos take on an obligation to not express their own personal opinion when they’re at a pubic company.”
Meantime, Kim Vernon, ceo of Vernon Co., a consulting firm, believes that ceos of public companies and private equity or venture capital backed brands “should not be using the company as a platform to express their personal political platform, as they are representing the brand whose constituents (and customers) have a rightful range in view points.”
Having said that, she added that any American citizen has the right to privately support any cause, among peers or with personal finance. For example, she said it is possible that Plank “went a bit too far” in his statements in favor of Trump and his administration, “but has since clarified them, somewhat appeasing his customer base, showing the fine line between social issues and political.”
She added that when human rights are being violated, as in sweatshops, or environmental hazards, “ceos should speak out and use their leadership positions to educate customers and peers. These are social issues, not political. They are different,” she said.
Vernon added that privately held company executives are more free to act upon their political beliefs, with no recourse from shareholders and investors. However, the leadership must be prepared to have boycotts that might affect sales. “Boycotting and conversely supporting brands that share one’s political values is a right, that in a divisive political climate, will happen,” said Vernon.
The impact of all this political turmoil is bound to be evident in branding.
Trey Laird, ceo and chief creative officer of Laird + Partners, said that some brands will choose to do more socially aware campaigns. “I think it depends on the brand, as long as it’s authentic. If someone does it to get attention and exploit the mood of the day, it doesn’t seem authentic,” he said.
“More brands are asking for more socially aware campaigns. That’s the age we’re living in, and that’s the dominant conversation. Not every brand has to, but it’s in the air and brands are considering it. Some brands just want to be about joy,” said Laird.
Ad guru David Lipman feels that companies should speak out about issues they care about, and their brand should reflect that. “I don’t believe in speaking negatively when it comes to promoting your brand. I think you can socially say anything you want to say, but once you become political, it can really backfire on you,” said Lipman.
He believes that speaking out about the environment, education, for not building walls or boundaries aren’t political statements. “Those are social statements,” he said.
Allen Adamson, founder of Brand Simple, a New York-based brand consultancy, believes that brands need to think it through before aligning with a controversial topic.
“To some extent, the rule of thumb today is to look twice before jumping into the fray. What seems like an easy decision is often fraught with complexity, it’s volatile. For every customer you make happy, you might make one equally unhappy.
“My advice to clients is try to resist being sucked into it until you’re sure you’re ready, and you’ve thought through how you’re going to do it and the pros and cons and you understand your user and your customer really well. It’s easy to get into and hard to get out of,” he added.
Robert Burke, ceo of consulting firm Burke Associates, said that brands and designers have never been in a position like this before. “They are taking a stance when it comes to the border adjustment taxes, because they need to, and certain companies have spoken up against the immigration ban because they have people affected by it, or have strong positions on it. As far as having a certain vocal stance, they need to pick and choose which issues are most important to them.”
He said some designers, such as Prabal Gurung, have chosen women’s rights as their topic of activism. The designer’s models sported feminist T-shirts that read slogans such as “The Future Is Female” on the runway. “Certain designers have had very definite opinions, but they kept them as personal opinions, as opposed to company opinions.”
Wendy Liebmann, ceo of WSL Strategic Retail, said, “What’s different today, is companies need to have a very clear point of view because they may be dragged into the fray even if they might not want to be. There are so many social issues today that companies are pulled into it. There’s a different dynamic now, and it’s combustible. It’s not only because of the evolving political landscape, but also there’s the beginning of an activism on the part of the consumers who have access to social media and can be very outspoken about the issues. You’ve got a changing political scene, lots of initiatives to change the culture of the country, as well as the economic, and a broad consumer base who have at their fingertips a way to be active and vocal and that’s changing the dynamic as well.”