On November 10, 2016, the United States was dealing with coast-to-coast protests in the wake of Donald Trump's presidential win. It was exactly the wrong time for Matt LeBretton, a spokesperson from New Balance, to publicly praise the president-elect, declaring Trump’s victory a move in the “right direction."
The privately held footwear brand’s problems escalated from there. The Daily Stormer, a neo-Nazi blog, praised the brand’s support of white people, and made headlines by calling New Balance sneakers “the official shoes of white people.”
The internet reacted quickly and decisively. Anti-Trump protesters, already upset about the election, began burning their New Balance sneakers and throwing them in the trash. The sneaker company issued a formulaic statement denouncing hate speech and expressing its support for “all races, genders, cultures and sexual orientations,” but the damage was done.
Errors, missteps, and goofs happen all the time in the retail industry, of course. Sometimes, the situation is accidental and mostly just embarrassing, such as the swastikas discovered on the soles of Conal International Trading Inc.’s work boots. But other times, it’s a full-blown brand crisis, such as what happened at New Balance. Experts say that whether the uproar is preventable or not, companies need to be prepared for worst-case scenarios.
“Nine times out of 10, brands don’t have the hindsight — no one does — to determine what is a bad move after the fact,” Dinah Alobeid, director of communications at social intelligence and consumer analytics agency Brandwatch, told Retail Dive.
In the case of New Balance, Alobeid says that the LeBretton’s public statements regarding political matters were further exacerbated by the neo-Nazi blogger’s public support, but that wasn’t necessarily enough. “The brand immediately turned around a public statement and seemingly did everything right to ameliorate the situation and send a clear message to the public that it does not support bigotry,” she said. “However, the question that is on everyone’s mind is ‘Couldn’t this have been avoided?’”
When is it a crisis?
After the fact, it seems like every crisis is avoidable. But of course, that’s not true. And that gets to the very definition of what constitutes a crisis.
“A brand crisis is categorized as an event that can negatively affect revenue, reputation or credibility,” Stacey Miller, director of communications for global analytics and communications firm Cision, told Retail Dive. At its essence, then, “crisis” for a retailer or brand is a broadly defined area of potential pitfalls and perils — and no brand or retailer is immune.
“Apparel brands are just as susceptible to crises as any other type of organization,” Chris Nelson, senior vice president and partner, Crisis Lead, Americas at global communications management firm FleishmanHillard, told Retail Dive. “We generally believe a crisis is any event causing severe damage to an organization, its market standing, finances, people, reputation or ability to operate. Usually that comes with significant media coverage or social media conversation, and plenty of outside scrutiny.”
Over the past two years, divisive political and social climates have led to an unnerving sense that there is a crisis around almost every corner, ready and waiting to unfold. “The word ‘crisis’ is pervasive in our lives, isn’t it?,” said Alobeid. “It seems each day brings about a new brand, political or social crisis in some capacity or another. With the media and social platforms giving us real-time information at the speed that life happens, crises are a bigger part of our lives simply for the fact they can escalate around the world in mere seconds.”
Alobeid says that for an apparel retailer, that crisis could come about in a myriad of different ways — and that there are, subsequently, different tiers of meaning in the word “crisis.” For example, Alobeid says that public outrage regarding a musician who also serves as a brand ambassador will likely lead to brand backlash by association, but relatively speaking, that’s a “lesser evil” type of crisis for a brand.
Some issues are more complicated, though, and brands need to be aware of the range of problems they may be faced with. “There is certainly a crisis spectrum, determined by the impact of the event or incident and the larger issue at hand, both for the brand and on a more public, global scale,” Alobeid said. “An environmental or social impact by a fashion brand, such as the conundrum of recycled clothing textiles and H&M’s efforts to do better, can be quite serious. Especially if it’s something that can affect brand perception and sales, such as was the case with an L.L. Bean heir supporting Trump and the consumer backlash to boycott the brand.”
Then there are the problems that are so serious that they are potentially game-changers. According to Nelson, examples of this type of crisis in the apparel industry include the revelations about sweatshop labor that damaged and ultimately destroyed the Kathie Lee Gifford brand; outrage at brands being manufactured at Rana Plaza when the building collapsed, killing 1,100; the offensive comments made by the Lululemon’s founder while trying to explain a product problem; and the mismanagement and allegations of improprieties at American Apparel.
Retail brands also need to brace for potential problems that sometimes come with running any type of business, says Nelson, who cites rogue executives, bribery, cooking the books, data breaches and bad behavior caught on viral video as just some of the more pervasive issues an organization can face. Simply being popular can herald its own set of problems, too.
“Many apparel brands have celebrity owners, designers, or spokespeople,” Nelson said. “Because media follow the rich, famous and beautiful, apparel brands are more scandal-prone than some other types of business.”
The public also feels a particular level of ownership towards retail brands these days, and that brings its own difficulties. “Another lower-tier issue that arises for fashion brands includes scrutiny of internal changes, as was the case with Yves Saint Laurent early last year,” said Alobeid. “When they announced a new creative director, they decided to give their Instagram a fresh look too, and proceeded to wipe the account, to the dismay of their nearly 400,000 Instagram followers. What they likely perceived as a corporate personnel change ended in public outrage and vitriol from their fanbase, and spiraled into a full-blown crisis. It was a risky move for sure, and one that I doubt the brand will replicate in the future.”
However, if handled correctly, these issues can also be potentially illuminating, says Nelson. “Widely covered crisis situations are unique moments for organizations, because stakeholders learn more about the organization and how it’s run during a crisis than at any other point in a company’s lifecycle."
What can be ignored? What has to be addressed?
Regardless of the size or complexity of the problem, every retail brand must have an action plan in place well ahead of a crisis situation. “All problems must be addressed to maintain credibility and trust in the face of a crisis,” Miller said. “If there is misinformation, correct the misinformation. If your brand made a mistake, rectify the mistake, apologize and insert processes that ensure the mistake doesn't happen again in the future.”
The worst thing a retail brand can do is to try and ignore a bad situation. “No crises go away on their own,” Nelson said. “Companies need to respond in stewardship of their most important stakeholders.”
So which types of crises need to be addressed immediately? “All of them,” said Nelson. “During a crisis there is limited time to respond before outsiders, such as regulators, politicians, plaintiff’s attorneys, and/or activist groups, will usurp the company’s initiative.”
Miller agrees. “I don’t believe that any problems are best left unaddressed. In some way, shape or form, you must address a crisis as a brand to remain transparent and trustworthy. Not addressing crises can often exacerbate the situations.”
But just because a problem gets addressed doesn’t mean it disappears. “Often, brands come to us and say, ‘We put a statement out on the crisis, but the public keeps going. What do we do?’” Miller said. “The answer at that point is to let the conversations continue and die down. Because you effectively addressed the crisis with a statement, it can become disingenuous to post the statement over and over to multiple inquiries of the same topic. Be sure your message is distributed to the right channels and stakeholders, answer any follow-ups or clarifications that are necessary, and then move on.”
It’s also crucial to recognize who’s really taking the brand to task, and who the brand most needs to answer to.
“When it comes to public-facing issues, the main thing to remember is that brands really do care what consumers think,” said Alobeid. “After all, they’re the ones buying the brand’s products. For an issue that directly affects customers, like recalled items and the like, it’s vital that the brand addresses these issues directly with consumers. Personalized communication is key to ensuring customers know they matter and feel their grievances are heard and addressed effectively.”
Alobeid says that social media plays a huge role in this, because so many consumers use Twitter, Facebook and other online platforms to complain about products and brands. She also says that minor problems — such as sending out a grammatically incorrect tweet from a corporate account, or listing inaccurate sizing on an e-commerce site — will likely go away once rectified.
Experts say that although it’s critical to take action swiftly, it’s just as important not to do anything rash. “I don’t think there’s ever a situation that requires knee-jerk, reactionary responses,” said Alobeid. “The first and most vital step when a public relations crisis arises is to take a step back and evaluate the situation. Once you determine the threat level, and outline potential outcomes and consequences, you can strategically set your crisis [communications] process into action.”
Alobeid says that the main matters that need to be addressed immediately are ones that affect the public’s health, followed by issues that impact consumer trust of the brand. She says that especially for the most urgent action items (but in general, too), it’s vital for a brand to create a “crisis comms action plan” so the marketing team understands the different tiers of crises, and knows how react accordingly — and in a timely manner —to solve each situation.
Alobeid adds that it’s absolutely vital for any retail brand to have a social media element as part of its crisis communications plan. “Retail and fashion companies did not take to social as quickly as say the consumer tech industry did, and so these brands can suffer from a lack of advanced social media knowledge and know-how,” she said. “For example, using an automated intelligence alerts system like Signals can indicate a crisis before it truly escalates.” Alobeid notes systems such as these are especially helpful nowadays, since social media is a major source of communication for consumers, and they’re more likely to tweet at a brand than they are call customer service and complain.
However, the immediacy of social media can sometimes create a casualness that’s inappropriate when dealing with angry consumers: Don’t forget that tone is important, even on Twitter. “Any sort of public lashing or outrage by a brand is a definite no-no,” said Alobeid. “Responses that are too informal or use negative language should be avoided at all costs.”
It’s also critical for a brand to take calm, collected responsibility for whatever the problem is. “The worst things any brand could do in responding to a crisis include suggesting it’s someone else’s problem, ignoring it, being defensive, trying to act like the company was the victim,” said Nelson. “In any crisis, it’s important to have a strategy to respond to the crisis and restore goodwill, just like it’s important to have a business strategy in normal times. Gut-instinct responses or attempts to deal with it as a media problem generally fail.”
How can these problems be avoided?
Of course, it’s always better to simply avoid as many potential problems as possible before they arise. Alobeid says the most common public relations problems can be sidestepped by carefully listening to consumer conversations about the brand and the industry.
“Staying on top of trends, and learning to avoid discussing volatile topics, are the best ways to avoid any potential crises,” she said. “Also, maintaining control of your communications is vital. Clearly communicate internally to your team to ensure that employees, advocates, influencers and marketing team members don’t inadvertently share proprietary company information or damaging details that are not ready for public consumption.”
There’s even an acronym to help brands get started on a strategy plan. “A brand can avoid some of the most common problems and crises by doing a SWOT analysis — Strengths, Weaknesses, Opportunities, Threats — on each portion of their business and identifying potential crises,” said Cision's Miller. “Then, create a crisis response plan in advance of the crisis that includes approved answers, spokespeople, and scenarios so you’re prepared well in advance. A crisis is sure to strike most brands. The key is preparation, so the brand can adequately handle the situation.”
In the end, nothing is better in a crisis situation than a well-conceived plan paired with complete product control.
“Apparel brands must maintain solid risk management, product quality and compliance programs, and they need to ensure they have crisis management plans in place, that they review, update and practice using regularly,” said Nelson. “And most important, the organization needs to have solid controls over incoming and outgoing product. Every company is now responsible for its supply chain, and the apparel industry is notable in its extensive use of far-flung subcontractors. Apparel brands need to know how their products are made and who makes them, and they need to exert pressure over the supply network to ensure it meets acceptable standards. In addition, every company is responsible for the distribution of products in the same way. The company needs to have some control over distribution and retail, even if it outsources those functions.”
Of course, problems will arise. But they can be opportunities as well.
“Apparel brands need to realize that crises are inevitable in business,” Nelson said. “What consumers and other stakeholders judge is how the company responds. Regardless of the company’s role in the crisis, it needs to respond in a way that demonstrates leadership and provides stewardship for the interests of stakeholders, including consumers, employees, partners, shareholders and communities.”