Blindsided By Boycott: The Power Of Investors

Although we often get mad at big corporations for one reason or another, it’s pretty incredible what LOTS of mad consumers can do to force corporations to change their ways. However, sometimes corporate actions can have completely unforeseen impacts, and it’s not always on the side that you’d expect.

Many people expect that boycotts are initiated by liberal/left-wing groups, and while that is sometimes the case, it isn’t always true. We tend to think of Socially Responsible Investing as primarily action for causes that are glorified by left-wing groups: climate change, LBGTQ rights, feminism, racial equality, carbon-free investing, non-GMO products, etc. However, on the opposite end of the spectrum, there are also consumers who seek to alter the market through direct action. This could be deemed as “impact” investing or “worldview” investing, as the action seeks to alter the marketplace to reflect a widely held concern or view.

The best example of this came from Target (TGT) and its nationwide boycott that occurred last year thanks to a single blog post. No one could have expected that the impact of the boycott would be so great, and not only did this surprise their CEO, but it also surprised the consumers themselves. 

“Everyone deserves to feel like they belong,…and you’ll always be accepted, respected and welcomed at Target.”

Last April, the company published a blog post that publicized a general policy at Target stores that said any and all transgender shoppers were welcome to use whichever bathroom or fitting room happened to match their gender identity. It was during a peak national debate about gender-neutral bathrooms, and Target thought it was jumping on the bandwagon by making this policy publically know…however they ended up shooting themselves in the foot.

As it turns out, the CEO, Brian Cornell, never approved the publication of this post, and would not have approved it had he known it was scheduled to be made public. The reason being that choosing to “flaunt” a policy that makes less than half of your customers happy, and more than half angry, is a very bad idea indeed. And he was right: the company ended up alienating the concerns of more than half of their national customers base in order to be “topical” and reacting to current events without much thought.