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What Your Brand Can Learn Right Now from the Starbucks Controversy

By now, most of you are probably aware of the disastrous event at Starbucks —  where two black men were arrested in a Philadelphia store for not making a purchase and refusing to leave the premises. The scene was captured in a video that went viral, and the backlash has been monstrous on social media and resulted in physical protests across the country. As Warren Buffet famously said, “It takes 20 years to build a reputation and five minutes to ruin it.”

Starbucks can surely relate. According to a YouGov BrandIndex score, the coffee giant has already dropped to its lowest consumer perception in years. Without a doubt, this is a historic public relations minefield. Starbucks has gone into damage control during these very sensitive, caustic times in the country.

Will any public image initiatives work or is the brand hopelessly crippled?

One way to read the tea leaves right in this situation is to analyze Starbuck’s initial reactions — relating them to effective PR best practices and comparing to how other companies have overcome a public crisis in the past.

STARBUCKS DID THEIR RESEARCH AND KNEW THEIR AUDIENCE

The company knew that these are not the days when a controversy comes and goes. The internet doesn’t forget a scandalous situation. Social media and easily-captured videos amplify events to intense levels of engagement, attitude, and action. The fact that the video caught white patrons angrily objecting the arrest was a visible testament to the company’s customer base. Starbucks is no Chick-fil-A, a more conservative brand that easily weathered its own storm years ago when its CEO publicly shared his controversial views on gay marriage.

As always, any publicity starts with solid market research to understand where a brand needs to pivot, regardless of the situation.

Thus, Starbucks needed to move quickly and address its base.

STARBUCKS OWNED IT, AND OWNED IT FAST

When the racially-charged news broke out, one of the narratives on the web was pointing the finger at the Philadelphia Police Department (who have recently gone on their own damage control campaign). Starbucks didn’t ride that potential wave, immediately taking responsibility for the debacle.

The incident happened on a Thursday, with the video beginning to crest by Friday. On Saturday the hashtag #BoycottStarbucks exploded across Twitter. By then, the company had provided a public apology while CEO Kevin R. Johnson released both a video and written statement of culpability and regret.

The company’s reaction is a huge contrast from last year’s infamous video-captured incident on a United Express flight, when a passenger was recorded being forcibly dragged out. As the video became viral and the media reaction swelled, United appeared to deflect any blame at first and only apologized several days later. This was a textbook illustration of being tone deaf, widely seen as crippling the airline’s public perception.

The same argument can be made with the recent feet-dragging of Facebook once it was found its data was being politically mined by third-party companies. Stay tuned for that one, though.

STARBUCKS IS MAKING CHANGES TO THE BRAND

Taking responsibility and apologizing are only the first steps in any public crisis. Transformative actions should follow (beyond whatever recompensation offered to maligned consumers).

Historically, the best example might be in 1982 when seven people died from poison-laced Tylenol. Apologies were not going to make much of a difference in this tragedy, even if the culprit had been found. Instead, the maker of Tylenol, Johnson & Johnson, introduced a tamper-resistant packaging and $2.50-off coupons. Both solutions became a standard for the industry and an iconic case study on damage control.

Starbucks is obviously not going to add bigotry-erasing ingredients to their employee free coffees — but will be closing its stores on May 29 to conduct racial-bias education for employees (at the potential cost of $12 million).

This change is not in the product but the overall culture of the company.

As an expert in crisis management said, “This move goes far beyond the playbook of what a normal crisis response would be.”

STARBUCKS IS BEING DYNAMIC

A strategy in any business sense should never be static. Strictly following initial data and sticking to a template may lead to a disconnect.

Starbucks is being fluid with its crisis management. Johnson not only apologized in a video and written statement but has met with the two arrested individuals. This move has allowed Starbucks to own more of the dialogue instead of the media completely controlling the narrative.

Furthermore, the company continues to address the issue on its social media channels, as well as deal with collateral issues like fake coupons that offer free drinks to black customers. Sadly, regardless of the gravity of a situation, there are always elements wanting to make an extra buck or troll a population in the hope of having another sucker born in a minute.

Surely, Starbucks is learning from past nimble movements from other big brands — like JC Penny quickly addressing a Reddit, viral graphic that compared its teapots to Hitler or Southwest keeping its audiences well-informed right after an airplane made an emergency landing. Again, it’s about owning the dialogue as much as possible.

PR WIN OR CAUTIONARY TALE?

Starbucks seems to be doing everything right in the reputation management front, drawing deftly from past cases and innovating out of necessity. As marketer Viv Segal once said, “PR means telling the truth and working ethically – even when all the media want is headlines and all the public wants is scapegoats.”

I wouldn’t bet a pricey cup of coffee that it overcomes the crisis, though.

All times in history are unique, but these are singularly days where audiences live equally in both shifting physical and digital domains, all under an uncertain geopolitical and cultural atmosphere. In any public relations today, there are too many moving parts to be confident of how a brand will be affected.

In between now and the racial-bias education at the end of May, a lot can and will happen. In the end, the one thing that is certain is that this controversy will be a future case study, maybe or maybe not accompanied by a latte in a siren-printed cup.

The Most Wonderful Time of the Year? Black Friday Shopping Is Near

The day after Thanksgiving first became popular among shoppers in the late 1920s, when Macy’s department store advertised holiday sales during their annual Thanksgiving Day parade in New York City. This signaled the start of the holiday shopping season in the United States. Since then, it has evolved into huge sales in retailers across the country. It is an opportunity for retailers to create a sense of urgency by offering ridiculously low prices on certain items, offer special sales for limited hours during the day, or limiting the number of items available for purchase at the special price. Due to the high demand for hot “doorbuster” items, it is not uncommon for shoppers to camp out in front of their favorite stores in hopes of grabbing the coveted items.

Retailers capitalized on the increased popularity of online shopping and started marketing “Cyber Monday” deals. Cyber Monday has only been around since 2005, and legend has it, got its name because the average consumer had dial-up internet at home, and would wait to do their online shopping at work, where the internet connection was faster. While the deals on Cyber Monday might not be quite as good as those of Black Friday, more and more shoppers are taking advantage of the opportunity to stay in the comfort of their home the day after Thanksgiving. Last year, Cyber Monday surpassed Black Friday in terms of revenue—Cyber Monday sales reached $3.45 billion, up 10.2% from 2015, and just ahead of Black Friday’s $3.34 billion. This year, mobile sales are expected to make up 54% (45% smartphones and 9% tablets) of online sales, beating desktop for the first time.

Small Business Saturday, a recent addition to the holiday weekend line-up, was founded in 2010 by American Express in an attempt to support small businesses and communities around the country. While it has not yet grown into a mega success like Cyber Monday, 2.1 million small businesses and 112 million consumers participated in the event in 2016.

QuestionPro Audience conducted a study with its shopper panel to understand how consumers plan to shop over Thanksgiving weekend. Our research indicates that shoppers are looking forward to a vigorous holiday shopping season. Black Friday spending is always a good gauge on the state of the economy, and 37% of survey respondents indicated that they plan to spend between $250 and $750 this year on their Black Friday shopping. A whopping 61% are going to spend the same amount or more than they did last year, but only 19% of those surveyed plan to pay for their purchases with cash. As evidenced by recent Kmart and Sears store closings, e-commerce is taking away market share from brick and mortar stores. Online sites such as Amazon are where the majority of our respondents plan to shop. Although there have been predictions that mobile sales will be huge this year, only 11% of respondents plan to shop via mobile phone or tablet. 21% of those surveyed are looking to purchase clothing/apparel, followed by computers, TVs and cameras. Cyber Monday popularity is still going strong, with 47% of our audience planning to shop those sales as well, but only 32% plan to support Small Business Saturday. All in all, it looks like it will be a prosperous weekend for consumers and retailers alike.

 

iPhone X – Are Consumers Willing to Pay?

Unless you’ve been living under a rock for the past decade, you’ve heard of, used, and/or own an Apple product. When Apple first debuted the iPhone in 2007, it revolutionized smartphones and changed the industry. The touchscreen was unlike anything else on the market, and with a price of $399, took some getting used to for the average consumer. However, over the past ten years, we have become accustomed to and grown to expect a higher price point for the sort of innovation Apple produces. There are now more than 700 million iPhones currently in use worldwide, and that number is expected to grow 13% over the next year.

On November 3rd, their most anticipated product was released, the iPhone X. iPhone release day has become something of a national holiday for Apple fans, and the iPhone X release was no different. In cities all over the world, eager customers camped out in hopes of purchasing the $999 phone. According to Apple’s website, the phones were sold out in Apple stores by day end in New York, Boston, Chicago, Denver, Houston, Dallas, Minneapolis, Milwaukee, San Antonio, Austin, Los Angeles, Phoenix, Philadelphia, San Diego, San Francisco, Salt Lake City, Washington, DC, Las Vegas, Charlotte and Raleigh, North Carolina.

Apple has earned a reputation as an industry innovator, and the iPhone X doesn’t disappoint. The iPhone X has facial recognition so you can bypass the fingerprint entry. Also, the home button has been removed, allowing for the high-resolution screen to cover almost all of the device, and Apple promises an additional two hours of battery life. Now for what all the cool kids are already talking about: Animojis. You can create animated emoji animals that mirror more than 50 different muscle movements of your face.

These features sound very cool, but we wanted to know—does any of that really matter to the average consumer when they are deciding which new phone to buy? We polled over 300 people across the United States to see if features such as the newest technology and brand name outweigh a steep price tag to the average mobile phone consumer. We found that an overwhelming 80% of respondents are most interested in a moderate price point. The newest technology is a selling point for 50% of our respondents, but only 29% feel features such as a megapixel camera are extremely important. 24% are interested in the brand name, and 84% of our audience is looking for a phone with a long battery life.

Apple has assembled a cult of followers, and they are always eager to purchase the newest model. Reception across the board for the iPhone X has been mostly positive, with many users saying this changes what we’ll look for in a phone from now on. Every few years, Apple has come up with a new product that turns the market upside down, and it sounds like the Apple X is no different. But if you’re not interested in the newest technology and features, there are many other great, conservatively-priced options on the market.