Licensed products must align with the licensor’s brand message -- whether it be an entertainment brand such as Disney’s “Frozen”, a sports brand such as the NBA, or a multi-national corporate brand, such as Coca-Cola. So, when a brand takes a position on an important issue, that position becomes associated with not just the core product or service of the licensor, but the licensed products as well. We need to understand how and why brands often feel compelled to take a stand. That brings me to The Power of Licensing #3.
Since the horrific mass shooting at a school in Parkland, Florida on February 14th, 16 companies have terminated discounts and other benefits that they had been offering to NRA members and requested that their names be removed from the NRA website. At least five major retailers have announced that they will no longer sell semi-automatic weapons, raised the age to 21 for any gun purchase or discontinued using a particular supplier. These and other companies have taken a position. Perhaps the CEOs are more activist than past CEOs have been. But it’s more than that. Brands can no longer simply stay on the sidelines. The expectations of consumers have changed.
This is particularly true of younger consumers -- Millennials and Gen Z (born between 1998 and 2014) -- who want brands to stand for something, take a position, have a purpose. Much more so than their older counterparts, Gen X and Baby Boomers. And, importantly for brands, those younger generations are digitally native and deeply interconnected through social media. In the currently charged political environment, however, taking a position can be a challenge for a brand -- every strong position will likely please some and offend others. Keurig found itself in the cross-hairs last November when it pulled advertising from Fox following Sean Hannity’s downplaying of the allegations against then U.S. Senate candidate from Alabama, Roy Moore. Some applauded the decision, others posted videos of themselves on social media destroying their Keurig coffee makers. Sometimes taking a position is simply altruistic, such as Walgreen’s “Get a Shot, Give a Shot” program which administers flu shots to children around the world. Smart brands can be quick to respond to positive social movements, like Tom’s of Maine. Yet, it is becoming difficult for brands to separate themselves from the important transformations and conversations happening in society. The products or services that today’s consumers, particularly younger consumers, buy are often an extension of who they are as people and the causes with which they align.
Frequently, depending on the issue, there can be no neutral ground for a company already associated with the issue. This is certainly true of guns. That’s why in the past two weeks virtually all of the companies (but not all) that were associated with the NRA have terminated their programs. The first was First National Bank of Omaha, which issues the NRA VISA card; followed by Delta Airlines; United Airlines; Avis; Hertz; Allied Van Lines and North American Van Lines (both owned by Sirva); Alamo, Enterprise and National car rentals (all owned by Enterprise Holdings); Starkey Hearing Technologies; MetLife; Chubb; TrueCar (an automobile pricing and information website); SimpliSafe (a security monitoring company); and Symantec (a cybersecurity company).
Among the few that have remained associated with the NRA is FedEx, which has tried to stay neutral by saying it supports gun legislation but won’t take a political position. I’m not entirely certain that this won’t be construed as taking a position.
Dick’s announced that it will stop selling assault rifles entirely and any gun to a customer who is under 21 years old. Walmart, which stopped selling assault rifles in 2015, will now require any purchaser of guns to be 21 years old and will discontinue selling anything resembling a semi-automatic weapon, such as toys. Kroger has raised the age limit to purchase a gun to 21 at its Fred Meyer stores as has LLBean. REI has discontinued buying outdoor products from one of its major suppliers, Vista Outdoor, which also manufactures assault weapons (REI does not sell guns), until it establishes a plan of action with respect to selling assault firearms.
Advocates - - and consumers - - on both sides of the aisle are staking out their positions. A boycott is in the works against FedEx. Protests against Amazon and Apple were organized because they continue to offer NRA TV channels from their streaming services (without offering any comment). The Georgia Legislature killed legislation that would provide a jet fuel tax break at Atlanta Airport, Delta’s hub. Social media is humming with gun enthusiasts saying goodbye to Dick’s following its announcement. And so it goes.
But there’s a real difference now, and it’s a generational paradigm shift. The people who were born or just toddlers in 1999, when the Columbine school shooting occurred, can now vote. They have been raised with the internet and social media and are interconnected to a degree that no other generation has been before. Many in Gen Z are not yet voting age, but they are old enough to have strong opinions and are digitally sophisticated. These younger demographics have come of age during a time of mass shootings - - at schools, places of worship, clubs, movie theaters, and shopping malls. They are morally outraged and want it to end. They have growing political clout (which will only continue to grow), they have growing purchasing power (which will only continue to grow) and they have communication clout via social media. They are now driving the conversation. And, as I noted at the start, they want their brands to take a stand on social, political and cultural issues of the day.
Millennials and Gen Z are also less loyal to brands than older generations. They are more likely to move around among brands. So, taking a position or not taking a position on a subject that is important to them can drive these groups towards or away from a brand. Millennials are already an important consumer group. The older end of Gen Z are just becoming consumers. But watch out - - Gen Z makes up 25% of the U.S. population and will be a bigger wave than both Millennials and Baby Boomers. As much as brands have been focused on Millennials, they are now turning their attention to Gen Z.
Hopefully, these companies that have staked out a position on guns, from Delta to Hertz to Chubb to Dick’s, among others, are taking their positions based upon their company’s values. Due to their involvement with the NRA or with retailing guns, they have been called upon to make difficult decisions in the wake of the Florida shooting. That’s true of FedEx, Amazon and Apple as well. Deciding to make no change in business practices is also a difficult decision and should be consistent with company values. But these companies, generally public companies, must also consider their bottom lines. Will a decision hurt or help sales? Will a decision help retain consumers and recruit new ones or will it drive them away? Will it create a brand halo or brand damage?
The CEO of Dick’s, Ed Stack, said “The whole hunting business is an important part of our business, and we know there is going to be backlash on this. But we’re willing to accept that.” (The New York Times, February 28, 2018). But in a nod to the younger demographics, Stack also said, “We love these kids and their rallying cry. Enough is enough. It got to us.” (The New York Times, March 1, 2018). The reaction to Dick’s decision was swift on social media, with a majority voicing support for the decision but a not-insubstantial minority that was critical. Given its position as a leading gun retailer, Dick’s could not remain neutral and became part of the conversation. And that will likely become true of all of the companies mentioned above, to a greater or lesser degree.
But as for those younger consumers (as well as others), in my opinion, the actions of the companies taking a stand by terminating special benefits to NRA members or limiting the sales of guns and ammunition will burnish their reputations with this important demographic, at least for the short term and possibly longer. The co-host of MSNBC’s Morning Joe, Mika Brzezinski, summed it up perfectly last Wednesday morning, when the Dick’s announcement was made at the time the program was on air, when she said, “I know where I’m going to buy running shoes today.”
This post originally appeared in Forbes.