This high ideal of brands with purpose, that's a hard thing to get your head around. Let's look at some examples of brands that have done this and sometimes when you do this, it's polarizing and you lose some business, maybe you make it up with other business that's stronger and sometimes you just stand for your principles and you lose some business and you go with that. Let's look at some of these as an example of what brands are thinking, and some of these happened before COVID, Some of them happened during COVID and we're going to see more and more examples of this as brands recognize the need to really come forth with more than just catering to delivering trust to me and move to this we strategy. Let's start with probably the most famous example of this, which is the Colin Kaepernick ad that Nike ran. This was an ad where Nike took a real stand. What happened for those of you who may not know, was that Colin Kaepernick was a football player who took a knee during the national anthem because he said he could not stand for a national anthem where black lives were not being respected and he was going to take a knee until something happened to change the way black people were being treated. This caused a lot of disruption in the NFL. The NFL did not support him and he did not get recruited to a football team. It was a very controversial move. It was very polarizing. He had a lot of people that supported him and a lot of people who thought you're a football player. This is what football players do. By Nike running the ad, they knew that they were taking a polarizing stand. This was a very polarizing issue before Nike got involved. But Nike said what he stood for is what we stand for, we want to take on these values. We want our company to be supportive of these values and to stand for something. They came out with this ad believe in something, even if it means sacrificing everything, which was definitely what Kaepernick had to do. He sacrificed his football career because he took the knee during the national anthem. That was consistent with Nike's point of view Nike's slogan about just do it. It was a very, very strong ad, and it had a very strong reaction. People that agreed with it, which frankly were a lot of Nike's core customers, really supported Nike in this and they went out and they bought more Nike and they expressed stronger loyalty and they really, really were proud of Nike. They were proud to wear the brand. They liked what Nike did, but there were on the other side, people who were furious with Nike for doing this, not the least of which was Trump right after this ad came out, Trump tweeted against this ad and there are a lot of people who supported Trump and supported the NFL, because the NFL was not really behind Kaepernick at the time and they started burning their Nike product. Now, you might think that's somewhat crazy to burn product you already bought. It makes more sense to not buy new product than to burn product you already bought. But if you understand the importance of brand identity and how the brands you wear should be connected with your values, you can understand why people who were so angry with what Nike was doing, they felt they had to burn the product, they had to make a statement, and they took social media photographs or videos of themselves doing this. This is one of the interesting implications of brands taking a stand, brands having a purpose. People don't agree with everything, and in this case, this was a very polarizing issue. But what happened for Nike in terms of their bottom line was it was a strong stand and it delivered wealth to their bottom line, their target consumers, believed in it. They were happy that Nike did it, sales went up. Yes, they lost some sales from people who didn't agree with them, but they weren't core customers. The positives that they got over came the negatives and the sales that they lost. Net-net, it was a good business decision. But I think Nike did it for the value decision, for really trying to stand up and mean something. Now, interestingly, although very few brands followed Nike, when they took the Kaepernick ad out during COVID, for whatever reason, it seemed to be a tipping point and suddenly brands who had often in the past remained silent when it came to these social justice issues, they began speaking out and they really supported the Black Lives Matter campaign that grew and grew and grew in the summer of twenty twenty. During the pandemic, these events were very strong and were happening in parallel with some of the disruption that COVID was calling. A lot of these brands began speaking out and they had ad agencies and campaigns that made statements. It was such a big movement that actually there were blogs that were created on describing how different brands responded to the Black Lives Matter campaign. This is just an example of how these social justice issues had started before COVID started before 2020, but they really accelerated and took on much more meaning and much more emotion during the year of 2020. Some other examples of people taking very strong stands even if it resulted in loss sales was what happened with Dick's Sporting Goods. After the Parkland High School shootings which was before COVID, this is something before COVID, the CEO was so dismayed that assault rifles were being used to kill high school students that he decided to overhaul his gun policies and he stopped selling assault rifles. He even moved to take out the whole gun section from the sporting stores. Now, this did affect business. He has a lot of people who are customers, who are good customers of his that really do believe in owning guns and being able to buy guns in the sports store. Now he is taking a position that he feels in his conscience he must take. It's not necessarily the same position his core customers are taking, but he takes it anyway because he believes he has to take that position. When Dick's stopped selling assault rifles, for a while there, they were on their own. Other retailers did not stop selling assault rifles right away. This was a risky position for Dick's to take and he stood by it. In fact, he went on a speaking tour and started talking about why he felt like it was an obligation for Corporate America to take a leadership position. They really had to do something because it wasn't happening in Washington and that it was not okay that we are seeing these young people die because of the sale of these assault rifles and somebody has to do something. That was the position he took, very, very strong position. Eventually, Walmart, L.L. Bean, and Kroger, they did follow, but it didn't happen right away. It was a risky position and the CEO of Dick's was willing to do that. Over time, it did work out, a lot of the business that he lost returned and now, the way he thinks about his company has changed. He says, "We've done a lot of different things in the business." They reallocate their floor space. They're reallocating marketing dollars. They're going after the business that they can stand behind that is consistent with the values that he wants to have. He's very, very happy with taking on business that way. This is a really big change. Instead of chasing after the needs of your core segment and selling products that they want, he is filtering those needs to make sure that the products that he's selling are consistent with his morals and his values and what he thinks the brand should stand for. Again, this famous quote that he said, "I just don't want to be part of this story anymore." Just to look for this, Dick's did well during COVID. They were in the situation where they're selling product that people were moving towards, the work from home trend was making people do more athletic activities and wear more clothes and apparel that Dick's is selling. Dick's is now creating a new store brand that they say is competing with a Lululemon type of brand. They're coming out with men and women store-brand clothes on athleisure stylists, comfortable sporting clothes, not performance clothes. They're not really competing with Nike and Adidas, which they also sell, but competing more with the athleisure clothing trend. They're looking for growth in ways that deliver to their customers' value, but it's not in product categories that are not consistent with their own brand values. That's an example of how brands with purpose, that strategy is going to change your business. As I said, Walmart was slow to stop selling assault rifles, but they did. Dick's took the stand first and then Walmart did a little bit later, maybe because they were worried about antagonizing some of their customers. But they eventually did do that. But then, when there were some killings in their store, they took a stronger stand again and they stopped selling ammunition for assault-style weapons. They started to say, look, if there are killings in our store and we're selling ammunition that's causing some of this tragedy, we don't want to be part of that story. Again, even if they had some of their core customers who shop at Walmart not agree with their politics, who are guns rights advocates, Walmart decided that they couldn't be part of this anymore either, and they stopped selling ammunition. This is really interesting because it's brands taking a position even if it doesn't translate to good bottom-line results. CVS took a very strong stand on this. CVS became a pharmacy that talked about being not just a pharmacy anymore, but that they were going to become a health company. They decided that if they're a health company, how can a health company sell cigarettes when there is a hard evidence that shows cigarettes cause lung cancer which causes death. They took a very, very strong stand and they stopped selling cigarettes. The stopping of selling cigarettes was approximately two billion dollars of tobacco and related items. It was a very big decision to stop selling cigarettes. I have to say, that's tobacco and related items, that is anything that has to do with smoking. Smoking is activity that when people buy cigarettes, they'll go into the store many times, so the buying cigarettes is the trigger to buy into the store. Not only are they buying cigarettes, but they're buying other objects that are in the store, other items in the store. They may be buying impulse items. To stop selling cigarettes meant a significant loss of business. But they decided that if CVS was going to stand for health, it was too much of a contradiction to sell cigarettes when cigarettes were known to cause cancer. They gave up two billion dollars worth of revenue in a very direct way, and they did not make up that money right away. It was a business decision. They had to consider people who were evaluating the business on business decision merit that it makes sense. But it became an important foundation moment for the decisions they want to make in order to become more of a health care company. They made a decision perhaps in the short term that reduced revenues and profits, but it forced a strategic decision to look for growth and new business opportunities that were consistent with their values as a health company. Now, I should also say that Walgreens for example, did not stop selling tobacco products because they perhaps didn't position themselves that way, and they believe, look, there are people who want to smoke, they should be allowed to smoke, it's not illegal to smoke, and we're going to let people buy their product if they want to from our stores. These are two very successful retailers that stood on different sides of this issue. One did it in order to have a mission that they thought was a higher mission for them to be a health mission and the other was a company that selling products their customer wanted and they wanted to create customer value. Another thing that happens in this situation is, and this happened a lot during COVID especially during the Black Lives Matter world, when that started coming in, and that was also on the tales of the Me Too world when you started to see a lot of behavior that wasn't good behavior. People started pointing fingers at companies that had said they were a mission company, but were really doing things that were showing structural racism and that were having racist policies towards employees. One of the companies, for example, was Everlane. Everlane is a digitally native vertical brand that is mission driven. They really tried to be a company that was destined to make the Earth a better place and they cared about values. But then they got pointed out, that yes, you care about things, you say these things, but you have policies in place that discriminate against black people, and so they apologized. They stood up and apologized and they're trying to institute new employee practices. There's an example where I think it was a heartfelt apology. But there were a lot of companies that people started pointing out bad policies from, and then there were a lot of apologies. Some of these apologies weren't considered that heartfelt or they weren't considered authentic. It's hard to really give credit when everyone's just saying, "Okay, I'm making a mistake." Everyone's apologizing. That's like no one's apologizing. It's not enough to just apologize for what you've done, you've got to be what you want to be. You've got to be the company that has the values and then execute on those values. That's what brands with purpose means. Yes, it's a good idea to apologize if you made a mistake. Yes. But it's got to be more than just an apology. It's got to be the way your brand lives on and the way your company values are expressed over many things.
