I’m having a baby in February, so what was one of the first things I did? You guessed it – I created registries at every store I could think of. And what store was the most obvious? Yep, you guessed it again, the very store with the name right in it: Babies R Us. I was aware of Toys R Us’s bankruptcy file, and I was hopeful that I could find even more quality products at low prices because of it.
Until I read an article in November stating that the company had asked permission to award their CEO David Brandon and other top-tier executives up to $16 million dollars as holiday bonuses. The reason? To motivate them to work hard and make profits during the holiday season.
Imagine that – a company that filed for bankruptcy and is closing stores nationwide still feels they can afford $16 million bonuses not to the employees who actually work on the sales floor during overtime shifts and managing Black Friday crowds, but to the executives who drove the company into its current financial crises in the first place. As best put by Axios’ Dan Primack, “Guess which group will be manning cash registers at 5 p.m. on Thanksgiving Day, and which will be home with their families?” Yes, those top-tier executives definitely deserve that extra pat on the back for driving the ship into the iceberg.
Or at least, that’s the public appearance of the situation. And because of that appearance, I canceled my registry with the baby giant.
This isn’t an abnormal line of succession for millennials, either. Nowadays, companies are so much more than just their logo, product quality and customer service. A company’s community ethics and treatment of employees affect a customer’s purchasing decision just as much as the product themselves. And a new generation of ethically-conscious shoppers are flooding the markets.
Just look at Uber’s mistake at the beginning of 2017. When they suspended surge pricing during the JFK airport taxi strike, the move backfired as users of the ride-share app perceived the suspension as strikebreaking. The following hashtag #DeleteUber gained traction quickly, as thousands deleted their app. Since most Uber drivers were most likely only driving after their day job or were also driving for competing companies like Lyft, the movement didn’t effect them as much as the company’s profits.
A string of other controversial actions have caused the company to have to work their way back into the public’s good graces. Temple University’s law professor puts it simply: “The reality is that people build ethics into their market decisions all the time. We reward people who demonstrate some commitments to us, and punish those who don’t.”
Other companies impacted by their public appearances include SeaWorld for their treatment of orca whales; Monsanto for their development of genetically modified (GMO) crops; Walmart, for their dealings with foreign companies that utilize child labor, their ratio of low employee pay to corporate tax benefits, their environmental lawsuits, etc.; and so many more.
Equifax was even in the unfavorable spotlight recently for its controversy over the summer of 2017, which failed to report a large data breach of names, date of birth, social security and addresses of millions of consumers. During CEO Richard Smith’s senate hearing in October on the breach, a member of the group Public Citizen dressed as Mr. Moneybags from the game Monopoly and purposely sat behind Smith to make an undeniable statement of the public’s perception of the company’s actions.
Of course, the same ethical standards can be used positively for businesses. Take, for example, Toms shoes. Along with many socially-conscious business practices, the most famous is the company’s pledge to give a pair of shoes to those in need for every pair purchased. This marketing model motivates customers to sway their purchasing decision toward them over competitors who don’t make the same pledge. The “sandwich shop with a cause” Even Stevens has a similar practice, and donates a sandwich for every one bought.
Another example is Walmart’s competitor, Target. In April of 2016, Target announced their support of the Federal Equality Act and allowed customers and employees to use “the restroom or fitting room facility that corresponds with their gender identity.” More recently, the company announced in September of 2017 that it would raise the minimum wage for employees, and committed to the much-called for $15 minimum wage by 2020. These reasons and so many others are why many people (including myself) always choose the red bulls-eye over the yellow star burst.
So before making any major business decision, think long and hard about the image you want your company to have, and be aware of trending attitudes before jumping. If you feel your company can take the PR hit, then you needn’t worry much. But if you find yourself in a hashtag fiasco that’s spiraling your sales down the drain, then don’t waste another second doing nothing about it.