This week, Walmart (WMT) announced that it would no longer sell items with the Confederate battle flag. Other retailers including eBay (EBAY) and Sears (SHLD) quickly followed the decision. The moves follow the inexplicable shootings at Charleston’s Emanuel African Methodist Episcopal Church. This is a story about racism and violence. It is also a story about branding and how companies should respond to events.
The Confederate flag is a remarkably powerful brand for two reasons. First, it has high awareness; people all over the United States recognize it and understand what it means. Children in school study the Civil War in history class and learn its historical roots.
Second, it has a very clear meaning. It represents history, the Civil War, and the South. It also represents racism and discrimination. This is partly due to its connection to the Civil War, a fight linked to slavery. It is also due to the flag’s use by extreme groups. That connection was strengthened this week when photos appeared showing Charleston gunman Dylann Roof proudly displaying the Confederate flag. It also came to light that Roof drove a car that had the flag on its license plate. Roof ensured that the Confederate flag would be a brand inextricably linked to racism and violence.
There are few symbols with this amount of negative association. Perhaps the closest connection is with the swastika, a mark with broad awareness that is also linked to hatred and discrimination and violence. Wearing a swastika is a highly symbolic gesture. Flying the Confederate flag makes a similar statement.
The decision by Walmart (WMT)vand other retailers to stop selling merchandise with the Confederate flag makes perfect sense. A retailer doesn’t have to support every product it sells. Still, a product assortment has an impact on the retailer brand, just as the menu at a restaurant impacts its brand. Selling Rolex watches says something about your brand. So does selling Confederate flags.
For retailers, the move to drop the Confederate flag will enhance their brand. Cutting the items communicates that the firm has no interest in selling products that represent hatred and racism. It also communicates that the brand is up to date. This may attract new customers and give employees a sense of pride.
At the same time, the decision will have little negative financial impact; the items were likely not big sellers in any event. People who fly the Confederate flag will probably keep shopping at Walmart; there aren’t any large retailer chains that embrace the flag.
Starbucks (SBUX) tried to address the question of racism earlier this year, though that effort was far less successful. The company encouraged employees to write “Race Together” on cups and talk about race with customers. After a sharp backlash, Starbucks backed away from the idea.
This raises an interesting question. Why did people attack Starbucks and praise Walmart?
One reason is that Walmart’s decision was clear cut. The Confederate flag, after the most recent incident, clearly represents racism and divisiveness. Walmart did not want to support those views. Few people would argue against it. Starbucks, on the other hand, took on a more controversial question. Racial issues get very complex once you get past the question of racial hate. What view was Starbuck’s promoting?
Another reason for the different response is that there is a more direct connection for the retailers. These firms decided not to sell certain products. That is a decision that is closely linked to their business. Starbuck’s effort to get people talking about race had no immediate link. What does a cup of coffee have to do with race?
Finally, retailers are embracing a movement with broad appeal. The Charleston shootings were horrific. The community’s response was respectful and uplifting. Dropping the Confederate flag merchandise recognizes this situation. The companies are not taking advantage of the situation. They are simply making an appropriate decision.
Starbucks waded into a divisive issue. Should people attack law enforcement agencies? Where is the line between appropriate policing and overly-aggressive policing? This is complex.
Retailers deserve credit for stepping forward to drop Confederate flag merchandise. Their actions show how a company can respond to social events in a way that is respectful and appropriate. Brands should generally steer clear of complicated social issues but there are times where taking action is the best approach.
Tim Calkins is clinical professor of marketing at the Kellogg School of Management at Northwestern University. He teaches marketing strategy and biomedical marketing. He is author of the book Defending Your Brand.