Target Is the Target - Boycott Demonstrates the Power of Facebook, Political Protests, and Customer Dissatisfaction (TGT, ANF, APP)

Four weeks after the Target Corporation (TGT) made a contribution to a political support group in Minnesota, the candidate that benefited from the Target money is still under fire, the controversy is still in the news, and angry consumers are still staging  brick-and-mortar protests and virtual social media rallies. Target is the target of a significant consumer backlash, and a grass roots boycott is demonstrating the power that Facebook, political protests, and customer dissatisfaction wield in the U.S. retail industry.

Just this past weekend, a group of approximately 50 consumers staged a rally in front of a Target store in Chicago to protest the retailer's recent contribution to the political campaign of a candidate who openly opposes gay rights.  Fifty people hardly represent a massive movement.  If there were, say, 62,000 protesters, then Target would probably need to take notice and do something about it.

At this writing, 62,000 is actually the number of fans of the "Boycott Target" Facebook page which was launched less than a month ago in response to Target's controversial political contribution.  There aren't too many retail leaders on the planet who don't recognize what a significant accomplishment it is to gather 62,000 Facebook fans organically in less than month.

But even 62,000 cyber protesters don't seem all that significant compared to the 1.6 million fans on Target's own Facebook page who presumably still "like" the discount retailer.  The truly significant thing about this consumer backlash is how it became organized.  The protesters boycotting Target organized with the speed of a cyber flash mob, proving once again the power of social media and its ability to support real-time grass roots movements in a tangible way.

The "Boycott Target" group seems to think this is a gay rights issue.  The MoveOn.org group that is sending out messages to its left-leaning e-mail list seems to think this is a corporate political contribution issue.  At this point, I think it's mostly a good old-fashioned service recovery issue.  From a customer satisfaction/dissatisfaction point of view,  Target needs to quickly realize that this is about damaged customer relationships that might become irreparable.

A statistic that is frequently quoted by customer service experts and widely attributed to the Harvard Business School addresses customer dissatisfaction which results in the loss of business to competitors.  Reportedly, companies that reduce their customer defections by 5% could improve their profits by 25%.  Doing the math, the 62,000 fans of the Boycott Target Facebook page is equal to 4% of Target's own Facebook audience.  If statistical extrapolations hold true, then Target has alienated 4% of its customer base, which should result in an immediate plunge in profits - possibly as high as 20%.

This seems like an extreme statistical prediction, but it is not too much of a stretch to believe that there will be some negative financial fallout for Target.  It's even possible that Target may be in the process of joining BP as a cautionary case study illustrating the fiscal consequences of losing customer trust and respect.

In the land of the free and the home of the opinionated, businesses are allowed to have a point of view and to assert that point of view with their products, services, and public policies - even if that means alienating potential customers.  American Apparel (APP) and Abercrombie & Fitch (ANF) are great examples of companies that openly express a point of view that many consumers find offensive.  But these two retailers stay true to their offensive identity without apology.  Whether consumers "like" American Apparel and Abercrombie or not, at least it's clear what these two companies value (and what/who they devalue).

Target, on the other hand, is fueling the wildfire of consumer disapproval by seemingly pretending to be something that it is not.  The boycotters would probably have been pacified fairly quickly if Target had taken some kind of definitive and sincere action immediately.  Instead, the best response that consumers have gotten so far is an e-mail sent by CEO Gregg Steinhafel to his employees which said, "Let me be very clear. ...Target's support of the LGBT community is unwavering, and inclusiveness remains a core value of our company."

Target wants the public to believe that it is unbiased towards both the gay community and political parties.  The political contribution evidence, however, is pointing consumers to a different conclusion.  I think it's going to take more an internal employee communication leaked to the press to get this wildfire of customer dissatisfaction under control for Target.

Transparency is neither a fad nor an option in the U.S. retail industry any more.  Consumers can easily find out about the size and source of political campaign contributions made by retail companies and their leaders.  It's also fairly easy for consumers to find out about CEO compensation, environmental responsibility, reputation, customer service practices, and the workplace environment of just about any company in America.  Major retail organizations and leaders can't hide things behind boardroom doors for very long any more.

Retailers around the world should be following this Target customer retaliation movement closely because it could affect the balance of power between retailers and consumers dramatically.  If a social media-fueled consumer uprising makes a substantial impact once, rest assured the strategy will be used by consumers again.  I would be willing to bet that Gregg Steinhafel has fielded more than one phone call or e-mail from retail heavyweights in the past four weeks reminding him that it is not a good idea to negotiate with terrorists, kidnappers, political activists, or a consumer with a picket sign, a Facebook account, and an attitude.

What is the takeaway so far for corporate leaders whether they're in the retail industry or not?    Say what you mean, mean what you say. Be who you are without apology. And don't assume that consumers are gullible, stupid, or politically unaware.

Apparently, consumers don't like that.

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