EP 229: Consumer Boycotts: A Major C-Suite Headache

Special Guest: Warren Shoulberg, Retail Journalist and TRR Writer

Consumer spending is increasingly reflecting personal values. In a disruptive, unpredictable marketplace, the rise of grassroots activism presents unprecedented strategic challenges for retail executives. These orchestrated economic blackouts can transform individual purchasing decisions into collective action, triggering a compromised retail brand reputation with financial implications.  While any immediate sales impact is difficult to quantify, brands are still vulnerable. Join Shelley and Warren Shoulberg, retail expert and TRR contributor, as they discuss whether these movements are successful and how the true power of these boycotts may lie in the symbolic expression of shifting the public discourse, particularly fueled by social media. The growing tension between consumer activists and retail brands sits at the heart of the strategic calculus of how the C-suite serves its customers and makes decisions. Now more than ever, retailers need to work harder to earn customer loyalty.

For more strategic insights and compelling content, visit TheRobinReport.com, where you can read, watch, and listen to content from Robin Lewis and other retail industry experts, and be sure to follow us on LinkedIn and Twitter.

Transcript

 You know, 0. 1 percent of the shoppers in, in, in the U S. And I, again, I, I picked out Walmart, uh, um, decide, uh, to boycott it. Um, is that a rounding error? Is that something that you can quantify? I, I, I just think you can't. Retail Unwrapped is a weekly podcast hosted by Shelley Kohan from The Robin Report.

Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders keeping you in the loop with everything retail  Hi everyone. Thanks for joining our weekly podcast retail unwrapped. I'm very excited to welcome Warren shulberg.

He is the home guru and award winning journalist And consultant he also is one of our very esteemed Writers at the rom report. So welcome warren.  Thanks. Shelly. Uh, always good to pod with you and  uh, can't wait to uh, Dig into our topic today  That's great. I'm always happy to have you on retail unwrapped and uh today we're going to talk about something really interesting And very hot topic this whole grassroots Boycotting that we've been seeing across the industry.

So I'm just going to jump right in and give a little context. Uh, not that I need to, cause I think everyone in our industry. It has been involved in these economic blackout conversations, but these are a little different. There are these grassroots movements that are coming up for the consumer on last week, on February 28th, there was the people's union USA founded by John Schwartz, who was really targeting.

Consumers to not shop at big businesses. So that was kind of referred to as the economic blackouts. So, you know, not shopping at Amazon, Target, Walmart, Nestle, these huge corporations. Um, I, I'm not sure how successful it is, but we'll talk about that in a minute. Um, but a lot of these are motivated by, you know, corporate greed, so to speak.

But we'll also get into more details about that. But what's happening now is another boycott for Target in particular regarding its pullback on its DEI initiatives. And this is being orchestrated or organized  by Reverend Jamal Bryant.  And this is specific to the DEI rollback. So the economic blackouts last week Um, are not specifically about DE& I, but the one for Target that's happening right now is.

So, I think the tension between consumer activism and economic reality really sits at the heart of these kind of, uh, boycotts that we're seeing. So, let's start with Target. Warren, if you don't mind, what is going on? So,  uh, uh, unfortunately for Target, they've sort of become the poster child for these kind of social protests.

Uh, they were one of the more aggressive to, uh, institute DEI measures. And so, uh, they were applauded by folks who liked them and, uh, chastised by, By those who don't support those kind of initiatives um, and then uh, they rolled them back again as so many other companies have uh, including many retailers so  Target is not really doing anything that other uh retailers uh  Aren't doing the same thing, but just seems to  God forbid.

I can't believe i'm going to say that seems to be a target of all of this. So, um, yeah, you know If you can't go for the cheap jokes, why, you know, why bother? So, um, so target is, uh, is going to be the subject of this, uh, 40 day boycott that, uh, began on this past Wednesday. Um, as you said, it's being, uh, led by a, uh, uh, a pastor from, uh, a Baptist church in Atlanta.

Um, it seems to be. The 40 day period seems to be, uh, coincide with Lent and, uh, kind of makes some sense. Um,  you know, as, and again, as you said, it's, it's grassroots. There's really, it's so hard to figure out how effective these are, how widespread, uh, they are being supported. Um, and, uh, unlike the ones we saw on February 28th, which.

Again, for a different reason, uh, 40 days is a long time to ask, uh, consumers to pay attention to something. And so I'm not sure, uh, if I were leading something that I would, uh, uh, put it at a 40 day, uh, window. It does seem kind of long. So, um, uh, and also very hard to measure.  You know, targets, uh, their February numbers were soft, but they didn't say had anything to do with social protests.

Uh, it had more to do with the weather and, uh, the weather has always been the great, uh, the great, uh, doll made my homework excuse for every, every retailer since, uh, retailing was invented. So, um,  I think they're calling it. So talking about the, uh, it's interesting. They're kind of coinciding it with Lent and calling it the target fast. 

Right.  You know, I, I wonder Warren, you know, there's a huge demographic that relies on Target and Walmart and other value centered, you know, companies. These are big corporate companies, but they're able to get prices low. So we have this whole demographic that relies on being able to get good services, even groceries from these.

So for, like you said, 40 days, um, are we expecting these consumers not to shop there? So therefore, are they just, uh, going to be, you know, changing their shopping habits to Walmart?  Well, you got to think that that's, that's where some of that will go. Uh, if, if those shoppers, uh, uh, you know, if you need to pick up groceries or you need new sneakers for the kids or laundry detergent, uh,  um,  Where are you going to go?

I mean, that business will go to Walmart. It will go to Amazon. It will go to Kroger. Uh, and it will go to, to, to Kohl's and Costco and all over the place. So, but comes back to how  much business are we talking about and how effective, uh, are these protests, uh, that gets They get some headlines, they get some social media mentions, but um, I'm not sure how effective they are on bottom lines of companies. 

So when we talk about the boycotts, obviously the one for Target is very clear, it's about them specifically rolling back their DE& I initiatives. What are some of the other motivations that you're seeing in terms of these other types of grassroots boycotts?  Well, and And again, you should mention that, um,  Target, in addition to being, uh, uh, an early adapter of DEI measures, has also been a little more enlightened towards dealing with, uh, suppliers from, uh, from minority groups, from women, uh, and so they're definitely more vulnerable and, and, uh, we'll have to see whether they continue that commitment to supporting those kind of vendors.

Some of the vendors, uh, have said, Hey, we're not sure we want to continue to do business with target because, uh, because of these pullbacks. So again,  uh, and targets being pulled the other direction from, uh, the, I think there's a lawsuit in Florida, uh, From investors who said you didn't tell us that this dei stuff was gonna uh have a downside on your business, so they're really in a in a stuck between a rock and a uh, and a retail place and uh, and just not able to to do it, so DEI is certainly one of the big deals.

Uh, um, There are some other social causes. Uh, you know, as you said the the february 28th was just uh was just all about uh, don't support big business because They're not supporting you  And, uh, you know, who knew that, uh, public companies were greedy. God, this is, uh, this is earth shattering news, uh, that, uh, that they want to make money.

So, uh,  again, you've got a lot of different, uh, a lot of different players and a lot of moving parts. And, uh, um, some of them are, are, are contradictory too.  Yeah, and I want to go back to something you said, and I'm so happy you brought this up because I think it's really relevant. I'm, I really want to follow the story on it, and that is the, the lawsuit that's being held, coming against Target regarding the DEI initiatives and the impact on the financial.

And when you think about Warren, I'm sure you have because you and I are geeky this way. You know, when you go through these annual reports and you look at the risk factors, like, Even, even like the pandemic that happened in 2020, that was written in, you know, well before the pandemic, that a pandemic may have a negative impact on our business.

So, um, the fact that companies haven't yet written in. Something about policies or I don't know. I mean, how, how can companies like protect themselves against every single thing?  Yeah. I, if it's,  you know, five years ago, if you had said DEI to people, they would have. Thought you were talking about, uh, drunken driving, uh, uh, things.

Uh, uh, it just wasn't, uh, it just wasn't on anybody's radar. So, um, who's to say what, uh, what kind of issues will, will pop up next that will impact these folks? Uh, uh, it's just, uh, it's just very difficult to, um,  to project. And  taking it in the longer range, you know, companies have always had social positions, uh, and it just, you know, probably supporting the Red Cross and the, and the Girl Scouts was much less, uh, was much less controversial. 

You know, the Girl Scouts have gotten, um, uh, uh, their share of, of pushback. So, um, it's just a, a more, uh, aware consumer and, uh, uh, advocacy groups that now have the platform of social media to get their point out, uh, you know, if a local. Church group said we're going to have a protest. It probably didn't go much beyond the The demographic and geography of that group and now they can project out to the country.

So, um The scale and dynamics have changed Absolutely, and I do I agree with you wholeheartedly that this, you know Social media has really amplified the ability to get messaging out there and I do I want to reflect back so this kind of grassroots You know, uh, boycotting or activism and that's happening.

This isn't new. Remember last year, I think it was a year, maybe a year and a half ago, when Starbucks started having issues with its workforce. So the general workforce felt they were overtaxed and, you know, they were really working hard and not being supported by the company. And so we had this, you know, union drive, um, and a small group of workers in one warehouse really like started this, you know, campaign against the company.

We're seeing it now with these economic, you know, boycotts and stuff like that. And it's, it's not just about corporate greed. It's how we're treating our workers. It's a policies that the things that we say we believe in, it's like. You know, all of these, I think there's a bigger moment here for consumers who are really, like, standing up. 

Yeah,  uh, as you said, it's, it's a whole, it's a whole myriad of, of issues that, uh, that are being, uh, brought to the forefront. Uh,  labor conditions and, uh, um, and, uh, um, just work environments, you know, the Starbucks. Yeah. Sisters were saying hey, we got too many drinks to make and uh, and uh, we can't make them all so, um, You know, you've got that and certainly labor force is talking about, uh, unfair conditions I mean that goes back to uh to the ford motor company in the uh in in, you know in 1917 when uh, the assembly line  Got, uh, religion.

So, um, yeah, none of this is interesting. Yeah, no,  you go ahead. Sorry. No, I'm just saying none of it's new. It's just, it's just being manifested in different ways. And social media allows it to, to take on, uh, just a broader scale. Well, I have to say, though, in the case of the Starbucks, having recently analyzed the last 10 years of their performance, um, their profits, their profits over the last, you know, couple of years have really tanked.

And so, although this kind of came up as like a worker. You know, being overworked and too many drinks and the mobile ordering and you know, all these operational inefficiencies, um, the workers were right. It has been an inefficient over the past two years. So I think when we unveil some of the points behind the consumer activism, there's some truth that's Um, and then the other thing I want to mention, which I'm sure Warren, you have an opinion on this is such a time challenging time for retailers.

I mean, we have all these levers that we can't actually measure what is actually impacting the business. We have the whole tariffs that are coming down and retailers trying to respond to that. We have inflation pressures. Right. So price is going up and you know, what are we doing with our cost of goods and how are we trying to offset that?

We have this uncertainty with our consumer mindset, the political, you know, landscape in the U S right now is, uh, burdensome on our, you know, consumers, so you have all these levers and it's just a really challenging time to then layer on top of all this, or maybe it's because of all this. Yeah, 

how do you isolate, uh, uh, any of those individual elements that, that you mentioned, you know, short of, of asking every single shopper when they come out of the store, uh, you know, what impacted your purchasing today, you're just not going to get it. So, uh, uh,  you know, as, as we both said, and, and lots of other people saying it too, um, very hard to measure.

And uh, uh, you know, I think if if nothing else it does bring to the forefront that uh, these issues and and get some conversations going about, uh, Whether these are good things or bad things and, uh, uh, what role, uh, corporate America should be playing in, uh, in social issues. So, uh, you may not get, um, uh, hard numbers, but you're getting the discussion.

And I think there's some merit to that.  Oh, that's a great point. And I agree. Yeah. I mean, corporate America is part of the community, right? We'd like to kind of put corporate America kind of on the side, like this big corporate America, corporate greed, but it's actually in every community. And, um, it's great to have these issues, you know, bubbling up in conversation.

So I do think that's a positive outcome. Are you skeptical about the effectiveness of the boycotts from a financial perspective?  So, um, you know, full disclosure, I'm skeptical about almost everything these days. So, uh. Yeah. Yeah. So I may not be the most, uh, objective about this. Yes, but I'm very skeptical about, uh, how this is going to impact the bottom line.

Uh,  you know,  you look at Walmart, Walmart's a, a 600 billion company with, uh, with, I don't know, 6, 000 stores, 10, 000 stores around the world. So if, if.  You know, 0. 1 percent of the shoppers in, in, in the U. S. and I, again, I, I picked out Walmart, uh, um, decide, uh, to boycott it, um, is that a rounding error? Is that something that you can quantify?

I, I, I just think you can't, um, mm-hmm . Uh,  because, uh, the,  they're gonna talk about tariffs, they're gonna talk about politics, and, uh, and in my mind, those will have, uh, uh, inflation. Those will have much more of an impact than these, uh, than these social protests.  Yeah, no, I definitely agree on that. I think, uh, the inflationary pricing is really, um, problematic for today's consumer.

I think the other thing is, you know, like you had mentioned about this voice of social issues coming up, you know, some of this could really lend a negative spotlight on companies, and maybe that does then question consumers where they're going to Purchase or spend their money.  Yeah. Um, uh,  this is, you know, this would require the the typical consumer to go on to a, uh, a company's website and read their, uh, their 10k and find out,  you know, where they donated money to and, and where they stand on these things.

And, you know, if you're a shopper, hey. I just need to buy some more toilet paper or I need to, you know, I'm looking for a a a T-shirt or a blender. I, I, I just think shoppers are not that conscientious. Uh, and yeah.  That's my skepticism and, uh, cynicism rolled into all of it, so, uh, um,  it, it, it's questionable, uh, how much these are gonna play on things, uh, um, yeah. 

I think the other thing, cause you, it's interesting, you're absolutely right. I don't know one consumer that is gonna go through and read these annual reports, or the 10K reports, some reports are, you know, 600 pages so no one's going to do that. And um, but I am concerned that a lot of the information that gets out there Um is you know, not exactly correct.

And so now we have this what I call this sound bit You know, society where they're just grabbing on the sound bites of things and then acting on those sound bites. And so when we have some of these, you know, grassroots activism, um, things that are coming up, you know, what, what, how do consumers.

Understand what is actually real and what's not real and what's being slated one way, but maybe not exactly true. So, you know, do companies have any way of kind of getting back out there and, and, you know, discussing what it is that they're doing or things that people are saying about the company, what actions they're taking. 

Yeah, uh, wait, you're telling me that everything on the internet's not true? Oh my god, this, this, this is unbelievable. I, I never knew that. Uh,  but you're right, and, and people believe it, and, and they also, um, You know, we're all guilty of, uh, of, of tuning out, uh, sources that we don't want to hear from and focusing on those that we do, uh, so, you know, it's not just, uh, misinformation, it's, um, it's information that is, uh, filtered and I  you know, you try not to think it's biased but it but it probably is uh, and so You're just not getting accurate information and um  Again, the shoppers that that that want to do their due diligence uh, it's a pretty short list of people that that will do that so um But I come back to  the the most effective things all these protests will do is at least get some visibility for For these issues and I think there's value in that. 

I definitely agree. And I also think beyond revenue, right? Um, we're talking about an economic input what I think you and I both agree the economic Um, impact on companies is especially large companies is very small, but you're right about the voices. The voices aren't just about, you know, the spending of the dollar, but workers are choosing which companies to work for or not work for, right?

And so that impact the company and there's, you know, uh, influencers out there. So, um, it's, it's interesting. I think we're going to see more and more of these kind of gap grassroots.  Boycotts and I think they're going to have different social issues and you know, what do we what do we say to the consumer?

Like what what advice can we give to consumers and or retailers?  Well, There will be more. I agree. There will be more of these particularly if if this round continues to kind of get some visibility even if Uh, even if they're not having huge impacts on these companies, um, so I'm not sure what you tell the consumer, you know, how do you  just don't, don't take, don't take these things at face value that, uh, that, uh, this is going to, I mean, first of all, that everything, some of these folks are saying is true.

Or isn't, uh, filtered or slanted in some way, um, and that, um, uh, your actions,  you know, may or may not have much of an impact, so, you know, I think you gotta pick and choose what you're gonna believe in, um, because  there, there's,  there's just too much of this, and, uh, um, and it becomes, you Overwhelming and, and, and, uh,  as a result, kind of, uh, uh, ineffective. 

Yeah, it is very overwhelming. I mean, I would say to consumers, you know, fact check  and stand up for what you believe in, stand up for the social issues you believe in. I would tell retailers. You know be transparent with your customers, you know be transparent, you know Let them know what you are or aren't doing and um, I think that that builds loyalty If you're just honest with your consumer base,  so well And you got to come back to costco.

Uh Uh, you know, whether you agree with Costco's stands on things, they're out there and they're saying, this is what we believe in. This is what we're going to do. We're not, uh, we're not wishy washy about it. And, um, and, uh, I don't think that that was, uh, necessarily a A decision based on business first, you know, sure, they had to say, uh, we think this is going to be good for our business, but I think it was just  Costco saying, in our opinion, we're going to do the right thing.

And so I applaud companies like Costco that, uh, that are taking, uh, a stand and are not, uh, as you said, you know, they're being transparent and they're not, uh, you know. wishy washy  The the words this is This is what we believe in. I love it Yeah, and uh, well i'll give you a little fun tip warren and you probably are one too.

I'm a costa cost costco holic  Yeah  You know, I, I'm with you on that. I'm, I am very proud of the company for making a stance and, you know, putting out there what they believe in. So a great way to end our podcast. Any, any other closing thoughts, Warren?  No, but if you're going to Costco, could you pick me up some, uh, you know, 55 gallon drum of mayonnaise?

I really, I really need some. So, uh, I would appreciate that. There's just a ship it down here. So, uh, yeah, complicated issues. Uh, Uh, if I were a retailer, I would say, you know, Oh my God, I got enough problems. I don't know, you know, I don't know how to deal with this one. So, um,  not easy,  but, uh,  nobody ever said retail was easy.

So, yeah,  no, it's very complex business. So thank you. And thank you to our listeners. If you have any comments, feedback. You know, please reach out to us on the run report. com under contact us and make sure you link link in with us and love and share our content out in the marketplace. Thanks so much. 

Thank you for listening to retail unwrapped. We'll be back in one week with another podcast. Please subscribe on Apple podcasts, Spotify, or any podcast service. If you have questions, ideas for a podcast or anything else, please contact us. us via the r