Recently, Nordstrom, Neiman Marcus, Burlington and Belk have stopped carrying Ivanka Trump’s line of clothing, shoes and jewelry — apparently in response to consumer pressure. Now there are reports that Kmart and Sears are discontinuing online sales of the Trump home collection, which included furniture, lamps and chandeliers. But on the other hand, Wegmans grocery chain continues to sell Trump wine despite consumer protests.
Turning consumption into a political act is a well-documented tactic of lobbying the firm. Political scientists have called this “political consumerism.” That’s when consumers take into account not just the product itself but also associated political issues when deciding what to buy or not to buy. This can involve either consumer “boycotts” or “buycotts” of companies or their products.
[interstitial_link url=”https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/22/the-pussyhats-and-other-things-make-protests-fun-which-keeps-people-coming-back/?utm_term=.124047772da2″]When protests are enjoyable — pussyhats, anyone? — people are more likely to protest again[/interstitial_link]
Even before Donald Trump’s election as president, political consumerism has long been in the news. Nike, major apparel brands, carpet manufacturers, and even Apple have faced consumer pressure to establish supply chain governance systems to prevent labor abuses by their overseas contractors. A variety of organizations — Cracker Barrel, Domino’s, Chik-Fil-A, Hobby Lobby and Starbucks, to name a few — have been either boycotted or patronized because of their stances on LGBT or reproductive rights. And there’s more.
So does it work? Social science research has found that political consumerism can shape corporate policy only in very specific circumstances. And it faces serious challenges in shaping public policy. We explain below.
Consumer efforts to change corporate policies face these challenges
If you watched the Super Bowl recently, you might think that firms influence consumer preferences through advertising, not vice versa. In reality, companies spend vast sums to research consumers’ preferences. Especially in competitive markets, firms are attentive to even small changes in consumer sentiments. Firms now seek this information by monitoring what’s trending on Twitter, sometimes called sentiment analysis.
Consumer movements to change corporate policies do sometimes succeed. But political consumerism faces important challenges.
1) Free riders can pretend to join the effort, at little cost
First, in a classic collective action problem, consumers may want an outcome — but don’t want the cost of taking the action. Thus they may rely on others to punish or reward the company, trying to take a free ride. A consumer may want the bragging rights of taking the action, discussing doing so on social media to display her social concern. But she can brag without actually boycotting.
[interstitial_link url=”https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/24/no-sweden-isnt-hiding-an-immigrant-crime-problem-this-is-the-real-story/?utm_term=.782bd202183c”]No, Sweden isn’t hiding an immigrant crime problem. This is the real story.[/interstitial_link]
2) Social isolation is discouraging
Second, a consumer acting alone may not believe that she can influence corporate policy — because she doesn’t know how many others like her are taking action. That’s often called a “social dilemma” — and is sometimes solved by having a group organize the boycott. In this way, consumers realize that they are not alone and others are joining them. If such a group can create shared norms for what is called “pro-social” behavior, or establish systems for peer monitoring to ensure that nobody cheats, such collective endeavors have a higher chance of succeeding.
[interstitial_link url=”https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/06/will-the-protests-continue-thats-more-likely-than-ever-before/?utm_term=.c41fecd76d89″]Will the protests continue? That’s more likely than ever before — because of social media.[/interstitial_link]
3) Are substitute products available?
Third, boycotts are more likely to be successful if consumers can use a substitute product to satisfy the same need at roughly the same price. Boycotts will probably fail in monopoly markets simply because consumers have nowhere else to turn.
4) Is the product sold directly to the consumer?
Fourth, consumer boycotts tend to be more successful when the company sells directly to the consumer. After all, this allows consumers to directly influence the bottom line of the targeted company. It is more difficult to boycott a steel company that supplies steel to, say, car manufacturers than to boycott a specific car company. Of course, consumers can demand that this auto company ask for changes in the policy of the steel company. But the effectiveness of the boycott relies on whether the car company has leverage over the steel company.
5) Does the company profit from having a good reputation?
Finally, boycotts succeed when consumers are willing to pay a premium for the product for its image and reputation, rather than for its more basic attributes.
Think of the campaign against “conflict diamonds.” DeBeers, a major diamond company, quickly moved to ensure that its diamonds are not sourced from conflict regions — because it recognized that consumers do not buy diamonds for their function but for symbolic value. If diamonds are associated with strife and violence, they lose their appeal as symbols of love and harmony.
Or take the case of Nike, which charges an enormous premium for its brand image. In recent years, student-led boycotts on U.S. university campuses punished Nike when some of its suppliers were revealed to use child labor and keep adult workers in abusive conditions. This led CEO Phil Knight to pledge that Nike would compel its overseas suppliers to adhere to U.S. labor practices and standards.
Political consumerism has a harder time changing public policy
That’s a more difficult question, because it requires consumers to persuade firms to lobby the government on their behalf. During the second Iraq War, some consumers boycotted French wines in response to France’s vocal opposition to the war. By some accounts, at its peak, this boycott led to a decline in weekly sales of French wines by as much as 26 percent. But this had no effect on France’s policy toward the war.
On the other hand, the tactic has at times succeeded. In 2005, after a campaign of criticism from labor, consumer, and environmental groups, Walmart began to embrace such progressive issues as environmental protection, workforce equality and LGBT rights. For instance, in 2015, Walmart vocally opposed a proposed anti-LGBT law in its home state of Arkansas. Eventually, after Walmart’s pressure, the governor did not sign the bill.
Or take the case of the 2013 Rana Plaza tragedy in Bangladesh, in which a building with offices and garment factories collapse because of structural problems, killing more than 1,100 workers. The building’s owners had violated building safety codes and labor safety laws, and compelled workers to return to work even after cracks were visible in the building.
In its aftermath, apparel brands came under pressure from consumer and labor groups to ensure that their suppliers’ treated their workers in accordance with the labor standards of developed nations.
In turn, U.S.-based apparel companies lobbied Bangladesh’s government to tighten and vigorously enforce labor laws. They knew that they had the leverage: Garment exports account for 80 percent of Bangladesh’s foreign exchange earnings, and the industry employs 4 million Bangladeshi workers.
Further, companies could shift to suppliers in other countries. Some observers believe progress has been made, as the Bangladesh government helped the evolution of the Accord on Fire and Building Safety between global apparel brands and retailers and trade unions.
But these are very particular circumstances
If citizens boycott products that bear the Trump name to express political opposition or get public attention, they may succeed — in the latter goal, especially, if the president responds over Twitter. But if they hope to influence government policies this way, they may be disappointed.
Nives Dolšak is professor in the School of Marine and Environmental Affairs at the University of Washington.
Aseem Prakash is professor of political science, the Walker Family Professor and the founding director of the Center for Environmental Politics at the University of Washington.