Customers can be a finicky entity. One day they’re singing the praises of a company, and the next day people are deleting apps and unsubscribing from email lists en masse. Since the public is the source of a company’s cash flow and determines its ultimate success or demise, deleting and unsubscribing can be incredibly detrimental. While an angry consumer base isn’t always the kiss of death for a company, it can be the beginning of a downward spiral.
There are a few reasons that cause people to begin “boycotting” individual businesses. It could stem from the company’s political beliefs, uncovered shady business practices or the fact that people feel betrayed by their values.
Surely, there are some powerhouses out there—like Walmart—that no amount of bad press or angry customers can knock down, and there are some brands out there that have such a monopoly on the industry—like Comcast—that people have no choice but to just deal with it.
However, for smaller and mid-sized brands, it can take a lot of damage control to get back into the good graces of your bread and butter.
One of the most recent high profile backlashes happened just a couple of weeks ago. On March 15, speculation began swirling that Jet.com, a subsidiary of Walmart, would be purchasing beloved indie retailer Modcloth.
Jezebel was one of the first to break the news after they received a recording of a meeting where Modcloth CEO Matthew Kaness told employees about the buyout. This information was quickly met with disdain which increased tenfold when the formal announcement from founder Susan Gregg Koger was released two days later. Customers have been expressing their disdain by flooding Modcloth’s posts on social media with negative comments.
Modcloth is known for being a champion for female empowerment. Not only does the brand sell a variety of quirky, alternative pieces that stray from the norm in a wide range of sizes, but it also uses models that fit that broad range of sizes, and are free of airbrushing. The brand released a statement on International Women’s Day announcing that responses may be a little slow because 64 percent of their staff is female, and many would be taking part in the Women’s Strike.
It’s not surprising, then, that people who loved Modcloth for this message would be disenchanted with the fact that it sold itself to a company that not only seems to hate women, but its employees in general. It was the target of a class-action lawsuit—Walmart v. Dukes in 2001—for paying women less than men, and favoring men for promotions that went on for over a decade before ultimately failing to garner results. According to Slate, the women couldn’t prove that Walmart “operated under a general policy of discrimination,” meaning that the discrimination was apparent—but each store was free to make its own personnel decisions so it couldn’t be held against the corporation itself.
This paired with the fact that Walmart’s notoriously low wages are known to keep their employees dependent on public assistance, it’s no wonder that people are refusing to contribute to the Walton’s pocketbooks.
From raunchy ads to a creepy CEO, American Apparel has never been a stranger to controversy. In fact, the brand thrived for years as it was known as an edgy place to shop for basics made under fair labor practices. Sure, the photos in most of their advertisements looked like they might have been taken without the model’s knowledge, but it was nice to know that that bodysuit that exposes her nipples wasn’t made in a sweatshop in Bangladesh.
Surprisingly, the brand never came under fire for misleading consumers on their ethical labor practices. Though the company operated stores in over 200 countries, all of the garments are made in American Apparel’s Los Angeles factory and made by workers making a fair wage. Back in 2004, their average was $12 an hour. What did stir up controversy was the fact that though founder Dov Charney legitimately cared about the wellbeing of his factory workers, that didn’t mean he was an all-around good guy to do business with.
Charney has always been open about the sexual culture of American Apparel—after all, something has to make plain v-necks and 1970s-style tube socks seem edgy. In 2004, he had no qualms about masturbating while carrying on a phone interview with Jane Magazine reporter Claudine Ko. However, the seven sexual harassment lawsuits American Apparel has been the target of—mostly tracing back to Charney—showed that such an openly sexual environment in the workplace is like playing with fire, especially if it turns out that not everything is consensual. Even though none of the lawsuits came to fruition, they proved to be a real turnoff for consumers.
Though Charney couldn’t possibly be in every store at all times, Gawker reported in 2010 that he had a habit of reviewing photos of each applicant for retail positions to make sure they were “on brand,” before hiring them, and even before allowing someone to be promoted. The general consensus was that “on brand” meant “attractive,” and plenty of current and ex-employees wrote in to Gawker confirming these suspicions.
Despite the fact that Charney was forced out of the company in 2014, American Apparel inevitably declared bankruptcy twice since, before selling to Gildan for $88 million in January. It’s currently in the process of closing all of its brick-and-mortar stores and will carry on only as a wholesale brand.
Is there a modern brand that’s more controversial than Uber right now? The popular rideshare app has had its fair share of scandal, especially in recent months. But will it have a lasting impact on the company’s success?
Uber rides tend to be cheaper than cab rides, and certainly more convenient than obtaining a taxi if you live anywhere but Manhattan. Rather than calling a company and waiting for it to get to you, you drunkenly open your Uber app and a Prius will pull up within minutes. They’re also cheaper because rideshare services don’t require any of the licensing that cabs do. Aside from the fact that taxi drivers hate the service for taking their business, the company seems to be making questionable decision after questionable decision.
When the infamous Muslim ban went into effect on Jan. 28, airports were flooded with protesters, and the New York Taxi Workers Alliance even paused pickups from JFK Airport. In poor taste, Uber tweeted that surge pricing would be turned off at the airport. This was read as undermining the strike and protests, and #DeleteUber started trending on Twitter. According to Fortune, approximately 200,000 users had deleted their accounts in the days following.
As if that wasn’t enough, CEO Travis Kalanick has been making headlines himself. Not only was he a member of President Donald Trump’s business advisory board—much to the dismay of a large chunk of Uber’s consumer base, especially post-ban—but he also turned out to be a pretty awful Uber passenger.
Kalanick left Trump’s advisory board, despite saying, “Joining the group was not meant to be an endorsement of the president or his agenda but unfortunately it has been misinterpreted to be exactly that.”
Shortly after his resignation, Uber Black driver Fawzi Kamel gave Kalanick a ride and told him that drivers haven’t been making as much money as they used to. Kamel released dashcam footage of the conversation to Bloomberg which ended with Kalanick telling Kamel, “Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck,” before slamming the door.
Surely, that’s enough to make anyone consider using Lyft instead of Uber. But that’s not all! Former Uber engineer Susan Fowler published a blog post entitled, “Reflecting on One Very, Very Strange Year at Uber” on Feb. 19. This post told the story of the company’s human resources department’s poor attempt at handling her sexual harassment case, as well as multiple other women’s. This post claimed that when she started at the company, over 25 percent of the organization she worked with was female, but by the time she left, it was only 3 percent, likely due to the fact that their claims of sexual harassment weren’t taken seriously.
In an effort to either do damage control or just maintain transparency, Fortune reported that Uber will be making the investigation regarding these claims public in April.
Understandably, president Jeff Jones resigned from Uber on March 20. He simply stated that he didn’t see a future at the company. So if you run a small or mid-sized company, be sure to take heed of these mistakes, as they can be much more fatal to businesses lacking the cash flow to fend off the backlash.