The perils of mixing business and politics - USA TODAY
Asked if President Trump uses his firm’s high-end products, the CEO of a well-known Wisconsin company grimaced and shook his head.
"Don't know,” he said. “Don't care. I don't want to go anywhere near that guy. There's nothing in it for us to tout him as a customer."
It wasn’t a political statement. It was strictly business. The campaign donations of the executive — he asked not to be identified — go overwhelmingly to Republican candidates and organizations.
But in a divisive age dominated by a president with an itchy Twitter finger, the CEO’s aversion to entangling business and politics — even when his party is in power — is understandable.
With ubiquitous social media now fanning the flames created by even the smallest sparks, the pitfalls are clear.
Upscale retailer Nordstrom drops Ivanka Trump’s fashion line and draws presidential wrath in the form of an angry Tweet. The CEO of athletic apparel brand Under Armour applauds the president and irks one of its top endorsers, NBA star Stephen Curry.
“In the last hundred years, things have never been so polarized,” said John Mose, leader of the public relations practice at marketing agency Cramer-Krasselt. “So doing anything as it relates to politics, you’re guaranteed to upset a sizable chunk of the American people.”
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Dodgeville-based retailer Lands’ End learned that last year, when it first angered one segment of its customers by linking itself to abortion-rights advocate Gloria Steinem, then angered others by hastily severing the connection amid the initial blowback.
Now, with the White House occupied by a combative billionaire whose policies and manner have split the country, the perils for businesses that wade into politics have increased.
Mose (whose agency has trademarked the phrase “Make friends, not ads”) said that for a handful of companies with a clearly defined clientele — the Duck Dynasty folks, say — taking political stances makes sense.
“But if you’re trying to sell to everybody … I don’t see the upside,” he said.
Syed Akhter, a marketing professor at Marquette University, agreed.
“Businesses need to remain politically neutral,” he said. “No affiliations, no identification with a political party. Their major constituency is their customer base.”
Nordstrom began carrying Ivanka Trump merchandise in 2009, long before her father launched his presidential candidacy.
“They signed on to a lifestyle celebrity — pretty inoffensive,” Mose said. “Ivanka Trump was widely seen as sort of the ‘softer side of Sears’ of her family, didn’t bother anybody, and through nothing she’s done except be her father’s daughter, she’s now all of a sudden extraordinarily polarizing.
“And Nordstrom clearly wasn’t thinking about that when they made the deal.”
Nordstrom has said sales of the brand have fallen, particularly in the second half of 2016.
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A sales decline probably has indeed occurred, said both University of Wisconsin-Madison marketing professor Neeraj Arora and retail industry consultant Dick Seesel.
“Donald Trump’s election rhetoric likely eroded a sizable chunk of Ivanka’s customer base of wealthy, educated, urban women,” Arora said by email.
Seesel, owner of Mequon-based Retailing in Focus LLC, pointed to how divided the nation is over President Trump.
“You basically have half the country that is not fans of his and were probably specifically avoiding her products or his hotels or whatever the case might be,” Seesel said. “Given that, I’m sure it had an impact on the sales performance.”
Seesel said retailers typically make decisions based on how products sell, not politics.
“I don’t think retailers or consumer product companies can really operate in fear of what the president happens to say or tweet on any given day,” he said. “They need to make appropriate business decisions.”
For now at least, the decision by many other retailers appears to be to continue to carry Ivanka Trump products, which include apparel, shoes and accessories.
The #GrabYourWallet campaign pushing a boycott of Trump family businesses lists more than 25 retailers that sell Ivanka Trump merchandise, including Macy’s and Bon-Ton Stores Inc., operator of Boston Store, Younker’s and other department stores.
“This brand is performing well for our company,” a Bon-Ton spokeswoman said by email. Bon-Ton operates headquarters in Milwaukee and York, Pa.
But total online sales of Ivanka Trump products at five other major retailers fell in the second half of 2016 and were down 26% in January, according to receipt-tracking research firm Slice Intelligence. Slice analyzed online sales at Amazon, Nordstrom, Macy's Bloomingdale's and Zappos.
A Slice spokesman cautioned that online sales of Ivanka Trump merchandise surged in late 2015 — making for a tough year-over-year comparison.
Arora believes Nordstrom will be fine without Ivanka Trump's merchandise. All the same, he said, “As a business you never want to be in the middle of a political controversy.”
However, given President Trump’s polarizing nature and readiness to fight when he feels aggrieved, it seems likely that this won’t be the last political controversy to ensnare a business.
“I don’t know what they can do to avoid this type of scenario,” Akhter said, “especially when you have such an active president who is taking notice of every single thing the retailers are doing, or businesses are doing, and tweeting about it.”
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