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ANALYSIS

US retailers face a tough future amid consumer boycotts and tweets from Donald Trump

Paul McGeough

Washington: These are scary days for big-named American businesses - if they stock Trump products, they can incur the wrath of a consumer boycott that is turbocharged by the power of social media; but if they drop the presidential brands, they incur the wrath of the Tweeter-in-Chief.

Latest in the crosshairs is Nordstrom, a national chain of luxury department stores.

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Trump daughter Ivanka's brand dropped

US President Donald Trump has blasted Nordstrom on Twitter saying his daughter Ivanka has been treated quote "so unfairly."

In caving in to the boycott by dumping first daughter Ivanka Trump's fashion lines, Nordstrom was assailed in a Wednesday morning tweet by Donald Trump: 

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But what happened next was a surprise. The share price of Trump's earlier corporate targets had taken a hit, but not Nordstrom's - in the wake of the President's scold there was a quick little dip, a drop of 37 cents to $42.33; but within minutes Nordstrom shares rallied, hitting $US44.55 by 4pm.

Trump's tweet first went out on his private Twitter account and, later, there was an intake of breath in Washington, when he retweeted it on the official presidential Twitter account.

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Presidential spokesman Sean Spicer defended Trump, telling reporters: "He has every right to stand up for his family and applaud their business activities, their success … this is a direct attack on his policies and [his daughter's] name."

Nordstrom is the latest in a corporate line-up that has buckled to the immediacy of Trump-fuelled consumer anger - luxury chain Neiman Marcus, discount chains TJ Maxx and Marshalls and half a dozen lesser names have dropped or obscured their displays of Trump products.

The ride-share company Uber, most popular in urban [read Democratic-voting] areas, was another spectacular victim.

In a bid to placate angry riders, after more than 200,000 people used the #DeleteUber hashtag to close their accounts in protest at Uber seemingly undercutting New York taxi-drivers who went on strike in protest at Trump's migration crackdown, Uber boss Travis Kalanick resigned what ordinarily would be a powerbroker's dream - his berth on Trump's business advisory council.

If Trump's election victory was proof of his unique deployment of social media to talk directly to supporters over the mainstream media, then the boycotts spearheaded by the GrabYourWallet consumer campaign, named for the President's infamous "grab them by the pussy" line, is proving powerful too.

Social media has been a driver too, in organising huge crowds that turn out to anti-Trump protests across the country. Whereas corporation and political parties in the past might have sat back with lawyers, lobbyists and PR agents to gauge the depth of public sentiment, the immediacy of social media demands new, quicker-thinking crisis management strategies - lest competitors steal a march on them.

The Uber experience is instructive. While Uber dithered before responding, its key competitor, Lyft, was quick to make itself look good. While touting for Uber's lost accounts, it made a big splash with a $US1 million donation to the American Civil Liberties Union, which is leading the charge against Trump's migration crackdown.

Shannon Coulter, a GrabYourWallet founder, used social media to prod Kalanick to bail from the Trump business council, warning him: "This is not a 'seat at the table' moment. This is a flip-the-table moment."

Others acted to cast themselves as white hats amid the political tumult - Starbucks chief executive Howard Schultz promised to hire 10,000 refugees over the coming five years and Airbnb pitched in with an offer of free housing to people displaced by the ban.

Sergey Brin, a one-time refugee and a co-founder of Google, which is one of 100 Silicon Valley tech companies to join the legal challenge to Trump's crackdown, was on the frontlines, protesting at a San Francisco airport.

Having taken down Nordstrom and Neiman Marcus, GrabYourWallet's next big target is the ubiquitous American retail institution Macy's, amid reports of staff unrest and mounting pressure within the company to dump the Trump brands.

Meanwhile, LL Bean, sellers of outdoor clothing and sports gear, was paddling backwards in a bid to distance itself from a private donation by a member of the Bean family, of more than $US60,000 to the pro-Trump Make America Great Again PAC.

Ending up on GrabYourWallet's boycott list, the company claimed politically neutrality. But its position was not helped by Trump, who tweeted in the weeks before his inauguration: "Thank you to Linda Bean of L.L. Bean for your great support and courage. People will support you even more now. Buy L.L. Bean."

Both Nordstrom and Neiman Marcus spun their decisions on the grounds that sales of the Trump products were slow, but the louder message was that they understood that associating with the Trump brands risked corrosion of their own brands.

In that, it was difficult to assess the impact on the sale of the Trump gear.

In a statement, Rosemary K. Young, a senior director of marketing at Ivanka Trump insisted: "The Ivanka Trump brand continues to expand across categories and distribution with increased customer support, leading us to experience significant year-over-year revenue growth in 2016."

There are also warnings to corporations that, as the election demonstrated, the Trumps do have a support base to be reckoned with. There is not the fire that GrabYourWallet had generated, but there is a pro-Trump social media move for counter boycotts of Nordstrom, Starbucks and the rest.

Retailers and coffee chains reckon with a clientele who are voters. But the likes of Lockheed Martin and their shareholders are more susceptible to presidential pressure because the US government is one of their key customers.

Shares in Lockheed Martin dropped 2 per cent in December, when Trump slammed the company over the cost of its fighter jets. And General Motors and Toyota shares were off marginally when he locked horns with them over the assembly of vehicles for the US market in Mexico.

Investor sentiment is ephemeral at the best of times. Trump's earlier corporate victims all recovered in time.

And Kimberly Whitler, a marketing professor at the University of Virginia, believes that, with the passing of time, "consumers become numb to a message and at some point, with the velocity of Trump's tweets, it's likely that investors may become more 'numb' to his tweets and react in a more muted fashion".

In the case of Nordstrom, it's worth noting that if Trump's supporters were mostly older men who had not darkened the doors of a college, the demographic profile of the store chain's clientele tends to be female, millennial to middle age and higher income-earners.

A Twitter storm of support for Nordstrom in the wake of Trump's reprimand to the store chain might have had something to do with its shares rallying so immediately.

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