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Should Social Responsibility be Selfless?

1/16/2022

by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

While people gave gifts to loved ones last month, the world’s largest pizza chain was providing presents to some very surprised recipients—other restaurants. True, “it is more blessed to give than to receive,” but was Domino’s philanthropy actually aimed at putting itself on the receiving side?

As you may have seen in the 60-second spot from its feel-good campaign, Domino’s bought over $100,000 in gift cards from local restaurants and gave them to its own customers.

It doesn’t take much business background to know that the goal of an enterprise is to build market share for itself, not competitors. Even Vickie Corder, one of the restaurant owners who appeared in Domino’s commercial, was astonished by the action: “I can’t believe one restaurant is buying another restaurant’s gift certificates.”

Why would Domino’s want to support its competitors’ sales by buying their gift cards, and even worse, giving them to its own customers, making them less likely to buy Domino’s pizza? Some of the ad text suggests an altruistic reason: “Domino’s wants to help the people and restaurants in our local communities.”

One might take that explanation at face value. After all, the firm did fork over $100,000. However, for a company with annual revenues of $4.37 billion and operating income of $801 million, $100,000 is immaterial. There’s also some understandable skepticism--Why haven’t we heard before of Domino’s feelings of responsibility for other restaurants?

Instead, some of the chain’s social responsibility has looked more like ‘marketing gimmicks,’ such as its “Paving for Pizza” program, aimed at filling potential pizza-delivery-wrecking potholes, and its “carryout insurance,” guaranteeing free replacements for customers who inadvertently fumbled their pies.

The vast majority of people probably never had a poor pizza experience resulting from either of those issues and never will, so it’s realistic to suggest that in both instances Domino’s was making much ado about nothing, positioning for the free publicity that each unconventional campaign elicited. So, is gifting other restaurant’s gift cards just another attempt to gain exposure through oddity?

The gift card campaign certainly seems like it could be another gimmick; yet, there are some notable differences, namely that COVID has put unprecedented pressure on restaurants, causing many to shutter their doors permanently. In fact, Domino’s commercial mentions that “over 110,000 U.S. restaurants have closed since March 2020.”

That to say, unlike the exaggerated ideas of potholes pummeling delivery vehicles and consumers carelessly dropping carryout orders, the pandemic’s negative impact on restaurants has, unfortunately, been very real.

The ad also mentions a related phenomenon that COVID didn’t cause but did increase: the use of third-party delivery companies. During the height of the pandemic when most restaurants’ sit-down dining was paused, more and more people started getting restaurant food delivered to their homes and offices by providers like Grubhub, Uber Eats, and DoorDash.

Although selling food, whether for dine-in or delivery, seems like a good thing for restaurants, apparently the math doesn’t work well when third-party delivery companies are involved. Irene Li, another restaurant owner interviewed in Domino’s ad, affirms the profit predicament: “[Third-party delivery fees] take a huge chunk of our bottom line; all of that comes out of our pocket and goes to them.”

Others have echoed her concern, including NPR, which reported that apps often charge commissions of 17% or more, in addition to delivery fees. Likewise, the LA Times found that one local restaurant paid $35,000, or roughly a third of its annual rent, in delivery fees, which led the Times to recommend, “The next time you order takeout, call the restaurant [directly].”

Domino’s suggestion that delivery apps wreak havoc on restaurants’ bottom-lines is on-point; however, the pizza chain is also very well-known for doing its own deliveries. Does that mean that Domino’s is selflessly looking out for others? Not exactly.

Apparently, some of the many people who have grown accustomed to the third-party apps for food delivery have also used them to place orders for pizza, doing to Domino’s the same fiscal damage described above. In fact, another Domino’s ad has suggested such delivery difficulties, warning consumers that third party delivery firms charge “surprise fees,” but it will reward certain loyal customers who use its app with “surprise frees,” or, free food.”

Likewise, during an interview on CNBC’s Mad Money, Domino’s President and CEO Ritch Allision suggested that third-party delivery apps have, to some extent, stunted the company’s growth.

All this to say, by buying and giving away other restaurants’ gift cards, Domino’s has brought added attention to an issue that doesn’t just hurt its local restaurant competitors. It also bruises Domino’s own bottom line.

The question, then, becomes, Is it right for Domino’s to help itself while helping others?

Before considering the ethics of this query, it’s worth noting that Domino’s strategy does seem to be effective marketing. The unconventional approach gains attention, and the corporate social responsibility builds goodwill.

What’s more, because delivery is both the focus of the ad and a key component of the company’s value proposition, the promotion is more meaningful and memorable. When people consider Domino’s brand, the company wants them to think of food delivery, which the commercial accomplishes.

So, what about the marketing’s morality? One consideration could be the amount Domino’s spent on the gift cards ($100K+) versus how much it’s paid for the ads. Excluding production expenses, U.S. television broadcasting costs alone, average about $115,000 per 30-second spot, which means the campaign’s promotional budget certainly far exceeded the value of the gift cards.

The extreme imbalance may make some rightly question the company’s motives. Although Domino’s franchisees did assume some risk by giving other restaurant’s gift cards to their own customers, most people who eat out probably patronize multiple restaurants, making it unlikely that Domino’s lost business. In fact, free gift cards may have led some of their recipients to reciprocate by buying more pizza.

All said, it’ hard to paint Domino’s promotion as selfless: The company benefited from the tactics as did the other restaurants and those who scored the free gift cards. So, is such mutual benefit problematic?

Most business exchanges result in win-win outcomes. From the clothes we wear to the computers on which we type, we’re usually very glad we have those products and not the money we paid for them. Meanwhile, the marketers are grateful for our money and don’t want back their products.

Mutually beneficial exchange, in commercial and noncommercial contexts, is a very good thing. Some may argue that such a philosophy shouldn’t extend to corporate social responsibility, but why not?

Several years ago, two colleagues and I conducted research in which we identified three unique types of corporate social responsibility: donation, volunteerism, and operational integration. In the study we affirmed that helping others was very good, but implementing philanthropic acts that simultaneously furthered the economic goals of the organization was even better. The positive response to this article and another like it suggests that many others share the same viewpoint.

The reality outside business isn’t much different. When individuals give of their time, money, etc., benevolence in some form usually comes back to them. The stories found in the Go Giver artfully describe that phenomenon.

Domino’s did a good thing by buying and giving away other restaurants’ gift cards. Although it wasn’t a major act of corporate social responsibility, it was a meaningful one. The fact that the philanthropy also benefited the pizza chain, doesn’t stop the strategy from being "Mindful Marketing."

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Why Can't TikTok Block the Blackout Challenge?

1/1/2022

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Many people’s New Year’s resolutions are to eat less and exercise more. Fortunately, few people need to promise to kill less. That goal, though, may be a good one for the world’s-fastest growing social media platform in order to better protect the lives of young users who are oblivious to the dangerous game they’re playing.

Nyla Anderson was a “happy child” and “smart as a whip”—she even spoke three languages. Tragically, the 10-year-old Pennsylvania girl’s life was cut short on December 12, when she died while attempting a perilous social media trend called the Blackout Challenge.

The Blackout Challenge “requires the participant to choke themselves until they pass out and wake up moments later.” Sadly, some who participate, like Nyla, never wake up, and if they don’t die, they may suffer seizures and/or brain damage.

It’s tragic, but young people likely have engaged in foolhardy, life-threatening behavior since the beginning of humankind. Within a few years of my high school graduation, two of my classmates lost their lives in separate car crashes caused by high-speed, reckless driving. Most people probably can share similar stories of people they knew who needlessly died too young.

In some ways it’s inevitable that young people’s propensity for risk-taking paired with a limited sense of their own mortality will lead them to endanger themselves and encourage others to do the same. What’s inexplicable is how older and presumably more rational adults can encourage and even monetize such behavior, which is what some suggest TikTok has done.

Unfortunately, Nyla is not the only young person to pass away while attempting the Blackout Challenge. Other lives the ill-advised trend has taken include 12-year-old Joshua Haileyesus of Colorado and 10-year-old Antonella Sicomero of Palermo, Italy. TikTok provided the impetus for each of these children to attempt the challenge.

Most of us know from experience that peer influence can cause people to do unexpected and sometimes irrational things. In centuries gone by, that influence was limited to direct interpersonal contact and then to traditional mass media like television. Now, thanks to apps like TikTok, anyone with a smartphone holds potential peer pressure from people around the world in the palm of their hand.

In TikTok’s defense, the Blackout Challenge predates the social media platform. ByteDance released TikTok, or Douyin as it’s known in China, in September of 2016. Children had been attempting essentially the same asphyxiation games, like the Choking Challenge and the Pass-out Challenge, many years prior. In fact, the Centers for Disease Control and Prevention (CDC) reported that 82 children, aged 6 to 19, likely died from such games between 1995 and 2007.

It’s also worth noting that individuals and other organizations create the seemingly infinite array of videos that appear on the platform. ByteDance doesn’t make them, it just curates the clips according to each viewer’s tastes using one of the world’s most sophisticated and closely guarded algorithms.

So, if TikTok didn’t begin the Blackout Challenge and it hasn’t created any of the videos that encourage it, why should the app bear responsibility for the deaths of Nyla, Joshua, Antonella, or any other young person who has attempted the dangerous social media trend?

It’s reasonable to suggest that TikTok is culpable for the self-destructive behavior that happens on its premises. A metaphor might be a property owner who makes his house available as a hangout for underage drinking. The homeowner certainly didn’t invent alcohol, and he may not be the one providing it, but if he knowingly enables the consumption, he could be legally responsible for “contributing to the delinquency of a minor.”

By hosting Blackout Challenge posts, TikTok could be contributing to the delinquency of minors.

I have to pause here to note an uncomfortable irony. Less than four months ago, just after Francis Haugen blew the whistle on her former employer Facebook, I wrote a piece titled “Two Lessons TikTok can Teach Facebook.” In the article, I described specific measures TikTok had taken to, of all things: 1) discourage bad behavior, and 2) support users’ mental health.

How could I have been so wrong? Although I certainly may have been misguided—it wouldn’t be the first time—TikTok’s actions that I cited truly were good things. So, maybe the social media giant deserves to defend itself against the new allegations.

TikTok declined CBS News’ request for an interview, but it did claim to block content connected to the Blackout Challenge, including hashtags and phrases. It also offered this statement, “TikTok has taken industry-first steps to protect teens and promote age-appropriate experiences, including strong default privacy settings for minors."

The notion of protecting teens is certainly good; however, it’s hard to know what “industry-first steps” are. Furthermore, prioritizing age-appropriateness and privacy are important, but neither objective aligns particularly well with the need to avoid physical harm—the main problem of the Blackout Challenge.

In that spirt and in response to accusations surrounding Nyla’s death, TikTok offered to Newsweek a second set of statements:

“We do not allow content that encourages, promotes, or glorifies dangerous behavior that might lead to injury, and our teams work diligently to identify and remove content that violates our policies.”

"While we have not currently found evidence of content on our platform that might have encouraged such an incident off-platform, we will continue to monitor closely as part of our continuous commitment to keep our community safe. We will also assist the relevant authorities with their investigation as appropriate."

These corporate responses do align better with the risks the Blackout Challenge represents. However, there’s still a disconnect: TikTok claims it’s done nothing to facilitate the Blackout Challenge, but family members of those lost say the social media platform is exactly where their children encountered the fatal trend.

The three families’ tragedies are somewhat unique, but they’re far from the only cases of people seeing the Blackout Challenge on TikTok and posting their own attempts on the app. TikTok has taken measures that have likely helped ‘lessen the destruction,’ but it’s unreasonable for it to claim exoneration.

The company’s app must be culpable to some degree, but what exactly could it have done to avoid death and injury? That question is very difficult for anyone outside TikTok or without significant industry expertise to answer; however, let me ask one semi-educated question—Couldn't TikTok use an algorithm?

As I’ve described in an earlier blog post, “Too Attached to an App,” ByteDance has created one of the world’s most advanced artificial intelligence tools—one that with extreme acuity serves app users a highly-customized selection of videos that can keep viewers engaged indefinitely.

Why can’t TikTok employ the same algorithm, or a variation of it, to keep the Blackout Challenge and other destructive videos from ever seeing the light of day?

TikTok is adept at showing users exactly what they want to see, so why can’t it use the same advanced analytics with equal effectiveness to ‘black out’ content that no one should consume?

The truism ‘nobody’s perfect’ aptly suggests that every person is, in a manner of speaking, part sinner and part saint. TikTok and other organizations, which are collections of individuals, are no different, doing some things wrong and other things right but hopefully always striving for less of the former and more of the latter.

Based on its statements, TikTok likely has done some ‘right things’ that have helped buffer the Blackout Challenge. However, given the cutting-edge technology the company has at its disposal, it could be doing more to mitigate the devastating impact. For that reason, TikTok remains responsible for “Single-Minded Marketing.”

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Are Apple AirTags Too Risky?

12/19/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Most of us played ‘tag’ as a kid and loved the simple thrill of chasing others around and trying not to get tagged. Thanks to Apple’s advanced tech, the game has graduated to adulthood; however, criminals are increasingly “it, ” and the stakes are much higher for those being chased.

So, if you’re wondering what to buy for that childhood friend-turned-felon this holiday season, Apple has the perfect present: AirTags--The gift that keeps on taking. This dark humor aims to underscore some disturbing news: More criminals are finding that AirTags are a convenient way to pilfer the valuable property of others or even worse, to stalk people.

Apple introduced the small electronic tracking devices this past April to help individuals more easily locate products they’re apt to misplace like keys and bags. The company’s website explains how the 1.26” diameter tags work:

“Your AirTag sends out a secure Bluetooth signal that can be detected by nearby devices in the Find My network. These devices send the location of your AirTag to iCloud — then you can go to the Find My app and see it on a map.”

Given that this location system leverages a vast network of strangers’ devices, Apple has made privacy a top priority. The company ensures that only the AirTag’s owner can see where their AirTag is, and its location data and history, which are always encrypted, “are never stored on the AirTag itself.”

These measures appear effective in protecting the property owner, i.e., the person who places the AirTag on their own phone, in their own bag, etc.; however, it seems that a major security risk remains, namely preventing those with ignoble intentions from attaching AirTags to the possessions of others.

Of course, most people would notice if an AirTag inexplicably appeared on their coat or keychain, but they’d probably never see one affixed to the underside of their automobile. Unfortunately, it didn’t take long for car thieves to realize AirTags’ wonderful potential for pilfering.

Various news media have reported the troubling trend in which thieves see sought-after vehicles in public places like mall parking lots, attach an AirTag to the car in an inconspicuous spot, and track the vehicle to a more private place, like the owner’s driveway, where it can be stolen more easily.

The notion of ‘auto theft made simple’ is disconcerting, but even more disturbing is the idea that criminals could use AirTags to stalk people. What if you’re in a public place and someone inconspicuously slides one into a bag you’re carrying? The wrongdoer could show up at your home anytime.

Fortunately, Apple claims there are measures to thwart such chilling contingencies; its website explains:

“AirTag is designed to discourage unwanted tracking. If someone else’s AirTag finds its way into your stuff, your iPhone will notice it’s traveling with you and send you an alert. After a while, if you still haven’t found it, the AirTag will start playing a sound to let you know it’s there. Of course, if you happen to be with a friend who has an AirTag, or on a train with a whole bunch of people with AirTag, don’t worry. These alerts are triggered only when an AirTag is separated from its owner.”

These precautions do help ally some concerns; yet, a few questions remain, for example:

What if the person who’s unknowingly been ‘tagged’ doesn’t own an iPhone or have it with them, in which case they wouldn’t receive the alert?
How long does it take for the alert to be triggered?
How far does an AirTag need to be from its owner in order for the alert to be sent?

In keeping with the last question, if a person has an AirTag in a key chain that she hangs in a first-floor entryway, she won’t want an alert to sound each time she takes her iPhone to her second-floor bedroom. All this to say, AirTags’ security features give some significant reasons for pause.

Geoffrey Fowler, a columnist for the Washington Post, substantiated such concerns when he asked a colleague to pretend to stalk him for a week “from across San Francisco Bay.” He found that it took three days for the alert to sound, which amounted to “just 15 seconds of light chirping.” What’s more, if he didn’t own an iPhone, he wouldn’t have received any notification.

Although Fowler credits Apple for trying to do more to keep people safe than other tracking device makers, like Tile, have done, his experience still leads him to conclude that AirTags are “a new means of inexpensive, effective stalking.”

So, should Apple stop selling AirTags? Base on Fowler’s experiment, a natural conclusion is ‘yes.’ However, as it is with so many products that offer both positive and negative outcomes, the answer is not that easy.

For instance, many of us travel in automobiles each day to go to work, school, shopping etc. Tragically, more than 38,000 U.S. residents die in car crashes each year, and many more are injured. Also, we’ve unfortunately seen some use cars maliciously to kill others.

However, such incidents don't make many of us think twice about climbing into a car or crossing streets where others are driving them. Although the potential negative outcomes of injury and death are daunting, the great individual and collective benefits of car use overshadow those remote probabilities.

Similar rationale can be applied to many other products from kitchen knives to prescription drugs. We welcome their use because in the vast majority of cases they help people, not harm them.

Still, it’s fair to ask if AirTags offer a high enough risk-to-reward ratio. Yes, misplacing one’s car keys is annoying and can even be very frustrating, but we usually find them. How do we weigh the convenience of finding lost keys against the use of the devices to track others’ property or people themselves?

Those risks, especially if they become more common, likely don’t outweigh the rewards of quicker key recovery. However, there are several other, potentially more critical functions that AirTags can serve. Writing for Gadget Hacks, Jake Peterson identifies several of those uses, which include:

Lifesaver Beacons: People with severe allergic reactions can place AirTags on life-saving medications like EpiPens.
Location Trackers for Children: Parents can put the devices in their children’s backpacks or pockets and hopefully avoid experiencing their worst nightmare—a lost child.
Location Trackers for People with Dementia: At the other end of the age spectrum, some individuals beset by mental decline wander off. AirTags can make it easier to find them quickly.
Beacons for the Visually Impaired: The Find My app can help people with limited or no sight precisely locate important objects within their homes.
Location Trackers for Pets: An AirTag can help ensure that a beloved animal is found, without needing to insert a microchip into the pet.

Do the benefits of these latter applications outweigh the risks of unscrupulous AirTag use? They probably do, provided that Apple continues to improve AirTag security and that the deviant behavior remains isolated. Assuming those two ‘tag rules,’ AirTags can be useful for many people, helping to make the tracking devices “Mindful Marketing.”

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A Bad Sign: Macy's vs. Amazon Billboard Battle

12/4/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

With the holiday shopping season in full swing, many consumers are unaware of two titan retailers’ battle over a billboard, the results of which could impact how and where shoppers buy gifts for years to come. The clash also could impact what businesses come to accept as moral behavior.

The site of the showdown is the corner of 34th Street and Broadway, New York City, at the center of U.S. commerce. It’s there that Macy’s, which once boasted “the worlds’ largest retail store,” is taking what could be a final stand against the encroachment of Earth’s fastest-growing retailer, and one of nature’s most irrepressible forces: Amazon.

Macy’s has filed a lawsuit against Amazon, hoping to keep its close competitor from commandeering a 2,200 square foot billboard that adjoins Macy’s flagship Herald Square store. It’s a signage space Macy’s has leased for nearly 60 years.

The huge billboard, which features Macy’s iconic star and logo typeface set against the familiar bright red background, serves as a beacon for millions of pedestrians and potential shoppers as they walk north on Broadway and west on 34th Street. Millions more see the sign every November in countless camera shots during the retailer’s world-renowned Thanksgiving Day Parade.

Amazon, an organization that can send astronauts into orbit, is capable of just about anything, but how could even it endeavor to place its name on a billboard on the side of such a storied competitor’s flagship store?

Key to the controversy is the fact that Macy’s doesn’t own the building on which the billboard rests; the sign is actually attached to a small separate edifice situated just between the retailer’s massive 2.2 million sq. ft. store and the intersection. The owner of the tiny architectural interloper and its very valuable billboard is Kaufman Realty Corp.

With the contract it signed in 1963 expiring, Macy’s asked Kaufman to renew its billboard ad, but the company told its long-standing tenant that it intended to rent the space to a “prominent online retailer”—one who apparently has deep pockets and who most believe is Amazon.

Of course, both Macy’s and Amazon have physical stores and virtual ones; yet, Macy’s is in many ways the quintessential brick-and-mortar retailer while Amazon practically owns online shopping.

In a very real way, therefore, the billboard battle represents a titanic clash of competing marketing channels and business models, the results of which could impact consumer shopping behavior for years to come, as well as set important moral precedent.

Macy’s firmly believes that its loss of the advertising space, next to its flagship store, would be disastrous, as the suit it filed states, “The damages to Macy's customer goodwill, image, reputation and brand, should a 'prominent online retailer' (especially Amazon) advertise on the billboard are impossible to calculate.”

With net income that’s exceeded $1 billion for eight of the last ten years, Macy’s is doing well compared to many retailers, especially those that filed for bankruptcy over the last 18 months, e.g., Lord & Taylor, J.C. Penney, J Crew, Neiman Marcus, and Pier 1.

However, Macy’s profit margin for 2020 was a modest 2.9%. Amazon, in contrast, had net income of $21.3 billion on revenue of $386 billion, giving it not only much greater earnings but also a significantly higher rate of return—5.5%.

So, although Macy’s is not quite on the cusp, it’s certainly not operating from a position of power versus Amazon, and it truly can’t afford to see its flagship store, which it’s described as its “most valuable asset,” take a serious financial hit.

However, a hit on Macy’s Herald Square store and its effect on the future of retail is only one concern of the billboard battle: Amazon’s aggressive competitive tactic is also a breach of business’s moral bulwark.

Of course, Amazon has a right to buy any billboard it wants, but a key question is why the firm needs to buy that one.

According to Statista, there are over 340,000 billboards, or “big format outdoor displays,” in the United States. Just a ten-minute walk north of Herald Square lies Time Square, which has probably the greatest display of outdoor advertising in the world.

Granted, a sign in this spectacle of commercialism comes at a very high cost: between $5,000 and $50,000 a day, which could mean as much as $18.25 million a year. Still, that amount of money is almost immaterial to the one of the world’s richest companies.

As of December 31, 2020, Amazon’s balance sheet showed cash and cash equivalents of $41.2 billion. Even a $50,000-a-day billboard would represent less than half of one percent of those liquid assets (just 0.0445%).

So, if hundreds of thousands of large outdoor signs are available and Amazon can afford to rent any billboard it wants, why does it have to have the one in Herald Square that’s adjacent to one of its biggest competitor’s flagship stores?

It’s reasonable to infer an intent to attack the heart of Macy’s operations, to steal shoppers from in front of its landmark store, and perhaps even to embarrass the firm before its own customers.

Some might respond to such assertions of over-the-top aggression with, “That’s business,” or “Amazon is just being competitive,” or “The company is playing to win.” There’s a difference, though, between working hard to win and trying menacingly to make others lose. Unfortunately, Amazon’s billboard-buy seems like the latter.

Growing up, I loved to play sports and considered myself a pretty competitive person—I wanted to win and tried my hardest to do so. Although I didn’t like losing, I could tolerate it—it wasn’t the end of the world—especially if I played my best and the other person/team simply outperformed me.

By the same token, I never liked the idea of trying to sabotage or subvert opposing players’ performance. Instead, I thought, “Let them do their best, and I’ll do my best, and whosever best is better deserves to win.” I didn’t have to come out on top every time; I could ‘share the podium.’ Part of competing was knowing how to win and lose graciously.

In contrast, some individuals and organizations compete as if it’s all or nothing, and they have to have it all, all the time. They’ve no sense that ‘the market's big, so there’s plenty of business for everyone.’

Maybe it’s because of the holidays that this self-obsessed way of thinking reminds me of the Christmas classic It’s a Wonderful Life--specifically the film’s antagonist, the greedy and scheming Mr. Potter. Although he and his bank already own half of Bedford Falls, he won’t rest until it’s all under his control, not tolerating even a minor amount of competition from George Bailey’s small Building & Loan. No one else can win; he has to have it all.

My guess is that Mr. Potter would be proud of Amazon’s attempt to pry the Herald Square billboard lease away from Macy’s.

Macy’s is no real threat to Amazon, which can afford any outdoor advertising it wants and doesn’t need to have that specific sign. So, why go after it? It seems like Amazon doesn’t want anyone else to win; it has to have it all.

Macy’s lawsuit claims that all past and present agreements have prohibited the billboard’s owner from ever leasing the space to any other “establishment selling at retail or directly to any consumer.” If that claim is true and Macy’s is offering Kaufman Realty fair compensation for the lease, Macy’s has even more reason to believe its treatment is unreasonable.

Competition is not only necessary, it’s desirable, as it both benefits consumers and sharpens industry rivals. However, when organizations like Amazon enlist predatory business practices, their strategies are a sign of “Single-Minded Marketing.”

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Thanking Employees for Giving

11/21/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Even during a pandemic, there’s much for which to be thankful. Most organizations are grateful they’ve weathered the economic turmoil; at the same time, they also should be showing gratitude to the stakeholder group that has become increasingly important to them: their employees.

Help wanted signs in store windows and job listings on websites abound. Most of us can't recall so many organizations, in all kinds of industries, competing for such a wide range of talent.

A few months ago, I offered some suggestions for how organizations might better market themselves to a shrinking pool of prospective employees. Such successful onboarding is very important; however, it’s probably not as important as another tactic, which an old adage from personal selling mirrors:

It’s easier to keep current customers than it is to acquire new ones.

From a personnel perspective:

It’s better to keep existing employees than it is to hire new ones.

Those of us who have served on search committees, conducted job interviews, and participated in training, know the significant time, effort, and expense it takes to make successful hires.

Yes, every organization needs to bring new employees ‘onto the bus,’ but if good, veteran employees are getting off faster than new ones are getting on, the company really needs to shift its focus, for economic and other reasons, from acquisition to retention.

Keeping employees satisfied and wanting to stay in their jobs has been the focus of HR practitioners and management theorists, such as Frederick Herzberg, for over half a century. Marketers also have offered input through the specialization known as internal marketing, which treats employees as a unique target market and strives to meet their needs.

If you’ve ever left a job or thought of leaving one, you know many considerations impact the decision, some tangible like pay and benefits, others more intangible like respect and recognition. In many ways, all these factors coalesce into one desire that practically everyone, employed or not, has each day: to feel appreciated. We all like to know that others—family, friends, and employers—are thankful for us.

So, how exactly should employers show that they’re thankful for the people that work for them? Of course, there’s no one way. Also, different people might appreciate certain approaches more than others, similar to the way individuals have different “love languages,” or ways in which they’d like others to show love to them.

To help me understand best practices for showing gratitude, I reached out to three business professionals whose work prioritizes employee satisfaction. Some ideas they shared were familiar, but many included a ‘creative twist,’ and still others were completely new. Here are several of their responses to my question: How can organizations show their employees they’re thankful for them?

1. Anthony Hahn, president and CEO of Conestoga Wood Specialties

Manufacturing some of the nation’s highest-quality custom cabinets and wood components undoubtedly takes a skilled work force that is challenging to recruit and retain, especially in a tight labor market. Hahn shared that new measures such as higher starting wages, improved vacation opportunities, and attendance bonuses have helped offset those challenges.

However, Conestoga have gone much further to communicate to its employees that they’re appreciated. The company has given workers more flexibility in attending to personal needs, instituted employee recognition events with catered lunches, improved training of front-line supervisors, and enhanced corporate communication.

During the holidays, there are still more expressions of gratitude that Conestoga offers its 1,000+ employees, spread across several states, but two of the most significant things Hahn does throughout the year are to send each employee a birthday card and to seek opportunities to interact with individual employees and personally thank them for their work.

2. Stephanie Lehman, marketing coordinator for Martin’s Famous Potato Rolls and Bread

It’s unlikely that Martins would be the nation’s #1 potato roll and the bun of choice for Shake Shack if it didn’t have happy employees. However, because of its workers’ exceptional response throughout the pandemic, the company felt it needed to do more to express its appreciation for them.

Lehman shared that one thing the firm has done is increase written communication to employees, sending a “Martin’s Management Minute” during the summer months—the busiest time of year for a bun maker—in order to recognize employees’ exceptional contributions to the company’s success.

This past summer, Martin’s extended its gratitude a step further by videoing members of its executive team as they personally thanked employees for their contributions. The firm played the videos on digital signs throughout buildings at its headquarters and in satellite locations.

In addition, every three years the company unfurls a full-out celebration of its workers by hosting employee picnics at each of its bakery locations. With free food, games, and entertainment, the events are more like large carnivals or fairs, but they’re just for Martin’s families.

3. Jessica Walter, senior consultant for culture and employee engagement at Kincentric

Much of Walter’s career has involved helping all kinds of organizations communicate more effectively with their employees. As such, she’s seen examples on either end of the efficacy continuum, as well as all points in between.

Above all, Walter emphasizes that organizational leaders need to examine their communication and “make it personal”:

“Today's most effective leaders are focused on the human side of leadership – the heart side of leadership. Employees are craving connection, care, and compassion more than ever before, so a sincere expression of gratitude from a leader has a powerful impact.”

She describes how that personal communication can happen, saying:

“Whether it's a heartfelt email to the entire company, hand-written thank-you notes to your immediate team, or walking the floor and personally thanking each person you see, the act of appreciating and acknowledging [people] fosters trust and deepens the relationship.”

I’m not sure if Walter has ever consulted with Conestoga or Martin’s, but it seems like she could have, as each of those companies’ expressions of gratitude to its employees are excellent reflections of her advice.

I’ve long been a believer that the customer comes first. Although I still affirm that marketing mandate, I’m increasingly of the mind that treating one’s own personnel well is a critical, moral prerequisite. Moreover, companies that regularly communicate thankfulness to their employees are engaged in some of the most “Mindful Marketing.”

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Will the Metaverse be Meta-Worse?

11/7/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

A name change is seldom a small thing. It’s especially significant when one of the world’s most valuable companies decides to rebrand. Facebook’s move to “Meta” offers an important signal about the firm’s future focus, which promises to impact billions of people who regularly sign onto its social media platforms. The idea of a ‘metaverse’ sounds exciting, but will it really be a better place?

The recent decision of the planet’s most widely used social media platform to rename itself Meta surprised many; yet, it’s a move we’ve witnessed before, one of the most notable happening in 2015 when Google grew into Alphabet.

Like Google, Facebook would never do something as rash as discard one of the world’s most valuable brands. Rather, the company recognized that by retaining the Facebook name for just the specific social media platform and renaming the umbrella corporation Meta, the company’s expansion would be much more free from perceptual constraints.

Moreover, Meta might stimulate a whole new world of virtual possibilities. According to the New York Times, the move encapsulates CEO Mark Zuckerberg’s plan to “refocus his Silicon Valley company on what he sees as the next digital frontier, which is the unification of disparate digital worlds into something called the metaverse.”

Wasn’t ‘unifying disparate digital worlds’ what Facebook did when it allowed users to link the platform to their Instagram accounts? In a manner of speaking it was, but the metaverse purports to be much, much more.

So, what exactly is the metaverse?

Despite its sudden popularity, the concept is not one that’s easy to define, mainly because “it doesn’t necessarily exist”; rather, it’s “a dream for the future.” It’s also hard to get a handle on the metaverse because, like the Internet, it’s not a singular product that Facebook or any one company can build alone.

Crypto game developer Andrei Shulgach, who spends several hours each day in the meta-space doing research for metaverse-related projects, affirms the concept’s evolving and evasive meaning:

“For the past four years, the term metaverse has mainly been a buzzword without a defined meaning, and even now it is often used ambiguously. For instance, there's a distinction between the gaming metaverse and the metaverse as a whole.”

To the end of reducing the ambiguity, here’s how some have described the metaverse:

“a variety of virtual experiences, environments, and assets”
“a framework for an extremely connected life”
“a 3D virtual world inhabited by avatars of real people”
“a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you”
“a multiverse which interoperates more with the real world, incorporating things like augmented reality overlays, VR dressing rooms for real stores, and even apps like Google Maps.”
“a future digital world that feels more tangibly connected to our real lives and bodies.”

If it’s challenging just to understand what the metaverse is, it’s even more difficult to estimate its moral impact. As Facebook and a slew of other organizations aim to engage us in their own region of the new ream, it’s important to ask:

To what extent will the metaverse be a force for good?

For those who don’t now frequent the metaverse, cynicism may be the understandable reaction, especially when some of the companies spearheading the change regularly make headlines for moral lapses like profiting from divisive content, playing fast and loose with data privacy, and allowing people to pummel others’ self-concepts.

There are undoubtedly more, but here are four main moral concerns related to the metaverse:

1. Time sink: Whether it’s watching hours of TikTok videos or compulsively checking one’s Facebook feed, social media has already become a time waster for many, so one can only imagine how an even more immersive virtual experience might consume each waking hour.

2. Distraction: In keeping with the first point, virtual worlds and avatars might also draw people’s attention away from what’s happening in the physical world around them, including relationships with flesh-and-blood people and resources that should be spent on real physical needs like food, clothing, and housing.

3. Safety: Internet safety is already a perennial concern, especially for children. Will even more complex and blended interaction, e.g., augmented reality, present new ways for predators to deceive and disadvantage vulnerable populations?

4. Accessibility: As technology serves increasingly important functions in many of our lives, it’s easy to forget that not everyone has the same access, which can be because of limitations that are financial (affording hardware and related services), physical (seeing or hearing), cognitive (distinguishing the virtual form the physical).

These and other moral issues may be further complicated by what Shulgach has observed: “many companies jumping into the space, trying to ride the wave and catch an audience when they really have no experience or know what it takes to launch a successful metaverse project.”

Yes, its cynical, but it’s also realistic to expect that at least some of these firms that are willing to overleverage their experience and expertise will also be inclined to undervalue ethical concerns. We see some of that ambivalence now with the Internet--Why would the metaverse be any different?

However, that rhetorical question can also have a favorable frame: Despite its flaws, the Internet has been a tremendously positive force for communication, work productivity, relationship-building, entertainment, and more--Why should the metaverse be any different?

As the metaverse continues to evolve, we’ll likely witness increasingly positive outcomes such as:

Organizations using the metaverse to train employees and serve customers, all while saving time and conserving other resources
Individuals finding even more interesting and engaging opportunities for information, education, and entertainment
People forming meaningful relationships with others who they otherwise would have never known.

Shulgach, who actively works within the game industry metaverse with others, has a vision for a metaverse that makes such a positive impact:

“The idea of connecting users through virtual worlds, and digital economies powered by crypto and NFTs with real-world effects, is crucial for what the metaverse will be defined as in the future. This is an incredible opportunity to re-define and innovate the way we interact with each other moving forward.”

Like many things in life, the metaverse is a kind of tool. Whether a tool is something as simple as a hammer or as complex as a car, most can be used for either good or bad—the outcomes depend on the motivation of the user.

The metaverse is a collection of tools that together form a mechanism unlike any other. It’s wishful thinking to believe that every user of the tool will actively consider its moral impact, but hopefully many will, if not most. There’s no reason that metaverse marketing can’t be “Mindful Marketing.”

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Will Heinz’s Halloween Promotion Scare Away Consumers?

10/23/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Halloween is a time when many companies give a glimpse into their dark sides, usually with carefully created, humor-filled ads. However, one iconic consumer product company’s frightful holiday tactic brings to mind the fearful parental warning, “It’s all fun and games until someone gets hurt!” Is Heinz’s gory Halloween promotion going to bloody its own brand?

The H. J. Heinz Company merged with Kraft Foods in 2015, creating one of the largest food and drink companies in the world, with an enticing selection of edibles, from Maxwell House Coffee, to Oscar Meyer Hot Dogs, to Philadelphia Cream Cheese. With such consumer product success, Kraft Heinz obviously knows something about branding, which makes Heinz’s decision to turn its ketchup into Halloween blood even eerier.

Yes, Heinz is suggesting that America’s favorite condiment for covering hamburgers at July 4th cookouts can also be used to coat Halloween costumes to give them a gruesomely bloody appeal.

Specially labeled Tomato Blood Ketchup is just one of the brand extensions. The company is also offering “Tomato Blood costume kits, masks and premade outfits themed around mummies, pirates and more,” all available on a company microsite, HeinzHalloween.com.

A YouTube video introduces the Tomato Blood Ketchup, which the microsite further describes as “a collectible limited edition 20 oz. squeeze bottle . . . the same classic Heinz ketchup you know and love, but with a spooky Halloween makeover.”

What should we make of Heinz’s move into the macabre? First, it’s important to note that Heinz is far from the only consumer products company that has sought to tap into the revenue potential of Halloween. Other brands that have created “Frightfully Fabulous Halloween Marketing Campaigns” include:

Butterfinger: mugshots aim to convict parents who have eaten their kids’ Halloween candy to turn themselves in.
Snickers: a grown-up trick-or-treater in a bear costume insists she really is a bruin.
Temptations: the cat food company recommends that pet owners feed its treats to their felines, so their cats won’t eat them.
Nike: has created a special Halloween-themed sneaker with orange and black colors, an illuminated outsole, and a “creepy spider pattern on the insole.”
Lego, Star Wars, Disney+: have partnered to produce a series of animated shorts with clever storylines based on Halloween themes.
Reese’s: a longtime Halloween favorite, suggests that all the Reese’s that disappear during the holiday have gone on to “a better place.”
Skittles: has released a special line of Zombie Skittles in Halloween themed flavors that include Mummified Melon and Boogeyman Blackberry.

The point is that other brands’ Halloween-themed promotions are heavy on humor and light on realism. For instance, no one would actually believe the Temptation commercial’s suggestion that a housecat would eat a person.

Contrast that humorous hyperbole with the bloody realism of Heinz Ketchup, which really does resemble plasma. If the next time you’re chopping vegetables for dinner you squeeze ketchup over your hand and wail in pain, members of your household will likely believe you’re badly injured.

Heinz Ketchup acting as blood has the ability to genuinely shock or sicken people unlike any of the other Halloween promotions mentioned above. Still, whether you’re a fan of Halloween or not, much of the holiday is increasingly about scaring and nauseating people, so in that grisly context, the tomato blood ketchup is not as outrageous as it otherwise would be.

So, most people can probably tolerate the idea and image of ketchup blood—there are things even more grotesque that people watch throughout the year in movies, TV shows, and online videos. Graphic violence that was seldom seen decades ago is now much more commonplace.

Some might say it’s a good thing that more people are now acclimated to the sight of blood, but what is that desensitization doing to society? Although it’s probably true that most of us are no more likely to kill someone, how do we respond when we see real bloodshed and violence on screen or in-person. Are we as likely to be appalled and to act against it?

A few weeks ago, on a SEPTA train outside of Philadelphia, a man raped a woman while several bystanders reportedly did nothing. Of course, intervening in an act of violence is no small thing. Still, if we weren’t exposed to so much violence and bloodshed, would we react differently when we see it? Is fake blood or anything that trivializes trauma adding a little more insensitivity to our collective apathy?

Such societal impact is certainly the most significant consideration here; yet, from a business perspective, there’s another important question to ask about the Halloween promotion:

Can Heinz’s own bottom-line stomach the bloodshed?

Of course, the campaign is the company’s own doing, so surely Heinz has conducted cashflow analyses to project how much marginal revenue Tomato Blood will raise against incremental costs for things like new labels and special promotion.

It’s fairly easy to estimate that net income. What’s much harder to determine is the blood’s long-term impact on Heinz's well-established brand. To that end, the AIDA model (attention, interest, desire action) may help.

On one hand, the uniquely appalling nature of Tomato Blood has gained Heinz considerable attention, or awareness that the brand wouldn’t otherwise have, e.g., news coverage, social media shares. Similarly, the mere idea of the repulsive product piques curiosity, or interest, and likely causes many people to want to find out more, just as I did.

For some people that attention and interest might also lead to desire, or identifying a need to use the product either as fake blood or to put on burgers, as well as to action, i.e., purchasing the bottles and/or recommending them to others.

On the other hand, there’s a real risk in associating a beloved condiment with a body fluid that many people literally "can’t stand the sight of."

Between 3 and 4 percent of the population has hemophobia, or an irrational fear of blood. For these individuals, even seeing blood on television can cause symptoms such as difficulty breathing and extreme anxiety or panic.

It’s easy to dismiss a relatively small group whose reactions to blood are clinically considered “irrational.” However, the same primitive reflex that causes some people to faint at the sight of blood exists in all of us to some extent.

How many people actually enjoy blood? It seems that a visual of the vital fluid makes most people at least a little squeamish if not nauseous. Given that widespread response . . .

Why would any brand, especially one whose consumption is predicated upon appearing appetizing, want to associate itself with such strong and innately negative reactions?

Human history and Maslow’s hierarchy have taught us that the motivation to eat is one of the most basic human needs and, if given a choice, people prefer to eat things that ‘pass the eye test’ and look appealing, if not delicious.

Food companies like Kraft Heinz usually go to great lengths in ads to make their products appear as attractive as possible. Some even use little tricks, like putting a light layer of deodorant spray on fruit to make it shine or substituting shaving cream for whipped cream, which looks better in pictures.

Industry insiders know that bad food experiences and negative impressions can be very difficult to overcome. I was one of many people who were slow to go back to Chipotle after about 1,100 of its customers contracted norovirus between 2015 to 2018. Many diners are even reluctant to return to a restaurant after finding something as simple as a hair on their plate.

More than what they wear, type on, or wash with, people are understandably very particular about the products they put in their bodies. Any kind of negative association real or imagined, can be difficult to overcome. So, it’s hard to understand why the manufacturer of a very popular tomato product would plant in people’s minds a seed of dissonance that could bloom into a very ‘bloody taste in their mouths.’

It’s hard to know actually how Heinz’s Halloween promotion will play out. It might offer a nice short-term shot to income, but it may also be a blow that bruises the brand while also helping make people a little more comfortable for gore. For these reasons, the matrix type for Tomato Blood is 'MM negative' for Mindless Marketing.

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Two Lessons TikTok can Teach Facebook

10/10/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Most of us have used social media to learn how to do something, from making bread to remodeling a bathroom. We often turn to such media for new skills, but what if these sites could educate each other? In the wake of the latest revelations about negative social media impact, it seems there are at least two lessons the up-and-coming platform could teach the seasoned pro.

It’s been hard to find news feeds recently that haven't featured Facebook. The iconic social network that’s often been the focus of questions from citizens and senators, was back in the spotlight after a former Facebook employee-turned-whistleblower appeared on 60 Minutes and exposed a series of alleged corporate abuses, most impacting consumers.

Francis Haugen is a 37-year-old data scientist and Harvard MBA who has worked for a variety of top-tier social media firms for 15 years, including a two-year tenure at Facebook. In her October 3rd interview on 60 Minutes, she didn’t pull punches in portraying what she believes is her former employers’ danger to society. Among her accusations were:

Facebook’s algorithms systematically amplify angry and divisive content, which are rewarded with more revenue, as other content doesn’t receive adequate returns.
Facebook employees are compelled to curate polarizing posts in order to drive site traffic, maintain user engagement, and ultimately keep their jobs.
“Facebook has set up a system of incentives that is pulling people apart.”

Two days later, Haugen testified before a Senate subcommittee, where she made several other stinging revelations:

Facebook has ways of determining people’s ages and could be doing much more to identify users younger than 13.
Hate speech and misinformation boosts meaningful social interaction (MSI), a key Facebook metric to which employee bonuses are tied.
Facebook’s “amplification algorithms” and “engagement-based ranking” drive young people to destructive online content, resulting in bullying, body image issues, and mental health crises.

Facebook has responded to Haugen’s accusations, including with a written statement to 60 Minutes in which it claims that polarization has decreased in countries where internet and Facebook use has risen. Also, in a Facebook post, CEO Mark Zuckerberg has suggested that Haugen’s revelations represent “a false picture of the company” and that the idea that the firm prioritizes profit above safety and well-being is “just not true.”

Unlike Haugen and Zuckerberg, most of us have no window into Facebook’s innerworkings. At best, we’re just one of world’s largest social media platform’s 2.7 billion monthly active users, meaning we have no way of knowing whose representations are really true.

Human nature and history tell us that both sides are likely right in some ways, and perhaps responsible for certain misrepresentations. That said, many people have experienced firsthand Facebook feeds strewn with angry and polarizing posts. Likewise, the company’s recent decision to pause its work on an Instagram product for children under age 13 seems to reflect some sense of mea culpa.

In short, it’s becoming ever-more-apparent, even to nominal social media users, that there are important issues Facebook needs to address more effectively. The question, then, becomes, “Who can teach Facebook how to rehabilitate its social impact?”

It must be hard for one of the largest and most influential companies in the world to accept advise from anyone, including members of congress, as evidenced during Zuckerberg’s many visits to testify on Capitol Hill.

That doesn’t mean that government regulation isn’t effective. It plays a critical behavior-modifying role. However, there are natural delays in passing legislation, and those lag-times are often exacerbated by the speed at which social media and related technology change. Furthermore, members of congress typically don’t understand an industry as well as those who work in it, particularly when the industry involves high-tech.

So, who also lives at the cutting edge of technology and could influence Facebook toward more positive social impact? One particular competitor could—TikTok.

I admit; on the surface, this suggestion seems almost ridiculous: With its own algorithms driven by artificial intelligence, isn’t TikTok part of the same problem?

In fact, I’ve expressed my misgivings about the influence of the widely-popular app that Search Engine Journal describes as having “the fastest growth of any social media platform.” In the end, however, I concluded that users’ abilities to restrict or stop using TikTok suggested that it was not truly addictive.

Of course, ‘not being part of the problem’ doesn’t necessarily mean that TikTok can be part of a Facebook solution. However, the social media upstart has recently taken two initiatives that align squarely with two of the main principles that Haugen suggested Facebook must learn:

1. To discourage bad behavior: Compared to the millions and millions of videos available on TikTok, it was admittedly a minor move when the app recently began to ban posts that referred to stealing school property—a disturbing late-summer trend among teens. Still, the moral stand that the company took shouldn’t be diminished. A TikTok spokesperson explained the ethos:

“We expect our community to stay safe and create responsibly, and we do not allow content that promotes or enables criminal activities.”

2. To support users’ mental health: Also about a month ago, TikTok unveiled “a slew of features intended to help users struggling with mental health issues and thoughts of suicide.” Among the app-related resources are well-being guides for those struggling with eating disorders and a search intervention feature that activates if a user enters a term like “suicide.”

Facebook’s challenges to more effectively discourage bad behavior and to support mental health may be somewhat unique, both in terms of their nature and magnitude. Still, TikTok now has 1 billion monthly users, up from 700 million just a year ago, and those users seem to deal with many of the same social concerns that Facebook users do.

Businesses routinely learn from others, often by observing and emulating them (e.g., developing new products). Facebook certainly can and likely does already do that, but maybe there’s another level of within-industry education that could occur.

This suggestion may be the most ridiculous one yet, but what if Facebook and TikTok cooperated? What if the two companies ‘compared notes’ and in some way worked together to address the physical, emotional, and social challenges that threaten both their users?

Of course, imaging any cooperation between such large and close competitors is practically unthinkable, but it's not unprecedented. Several decades removed, both Harvard Business Review (1989) and Forbes (2019) published articles citing such partnership examples, like General Motors and Toyota, and explaining the win-win outcomes that accrued from such “coopetition.”

What might Facebook and TikTok’s motivations be for cooperating? Perhaps they both would like to avoid probable government regulation. Or, they may want to see how they can advance themselves, without compromising their competitive positions.

Moreover, maybe Facebook and TikTok can recognize that personal and societal well-being are what matter most, and together they have the power to shape it like few others can. Actually, all three of motivations have merit and together they certainly represent “Mindful Marketing.”

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Four Behaviors of a Peacemaking Brand

9/25/2021

1 Comment

by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

In one of my favorite commercials, Liberty Mutual spotlighted acts of kindness that inspired others to pay the good deeds forward. Most people want a kinder, gentler world, but in a society awash in antagonism, how many of us think seriously about whether our daily actions encourage peace?

There are many ways for both personal and organizational brands to support serenity. Top-of-mind for me and accessible for all are four peacemaking behaviors that coincidentally all begin with the letter ‘L’:

1) Listen: Anyone who has dealt successfully with dissatisfied customers knows that first and foremost they want to be heard. More often than not, just listening to and acknowledging their frustration allays their anger.

Brands that genuinely listen, for instance, through other-focused interactions on social media, model humility, which according to Mother Teresa, is an important precursor to peace: “Only humility will lead us to unity, and unity will lead to peace.”

2) Learn: When we genuinely listen, we naturally learn. When that learning is aimed at appreciating and understanding others, interpersonal and interorganizational peace often result.

Most of us have experienced situations in which our exacerbation with coworkers, classmates, or others was largely due to not knowing them well or understanding their circumstances. However, after learning both, our appreciation grew, our annoyance subsided, and a more peaceful relationship ensued.

3) Laugh: Two research colleagues and I recently completed a study about playful teasing in advertising in which we learned that good-natured ribbing builds social bonds. Not only is laughter the best medicine, it’s a great peacemaker.

As a young aspiring athlete, I enjoyed playing basketball at local playgrounds with friends. One day an older, bigger boy, known to be a ‘rough character,’ asked to join our game—with trepidation, we obliged. Tension ran high as we worried about doing something to set him off, then one of my friends playfully teased the older boy, making some ridiculous comment about him playing professional baseball. I gasped, wondering how the short-fused guy would react—he burst out laughing, the mood lightened, and gratefully the game ended without incident.

4) Love: The best way any of us can promote peace is to show others love. It’s difficult to be at odds with those who treat us charitably. Although they might cringe at calling it love, companies are often able to act compassionately on levels that individuals cannot, as this extraordinary example illustrates.

A major meat processor had a smaller competitor whose plant became submerged from unprecedented flooding. While many firms would seize the opportunity to gain market share and eliminate an adversary, the larger company showed compassion, first sending some of its own employees to help clean up the water-logged facility then, unimaginably, lending equipment so the challenger could continue to fulfill orders.

The two competitors eventually returned to vying for business but likely with uncommon mutual appreciation and respect. Like the good Samaritans in the Liberty Mutual ad, these companies remind us that reconciliation isn’t someone else’s responsibility. Every individual and organizational brand can practice peace by listening, learning, laughing, and loving, which ultimately make for “Mindful Marketing.”

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Gen Z Students Teach Their Professor About Thrifting

9/10/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Remember the excitement of your first time wearing a new jacket or pair of shoes? Did you wonder how the original owner felt when they wore them? You probably didn’t unless you’ve been part of one of the hottest consumer trends--thrifting. For a variety of reasons, it’s now fashionable, especially among Generation Z, to shop secondhand, but this Gen X marketing professor wonders if it’s smart for the apparel industry to embrace a fad that may dissuade people from purchasing its new products.

Scanning my marketing news feeds a couple of months ago, a headline caught my eye, “Letter from Gen Z: Why thrifting is the future of fashion.” Thinking it was a bold prediction, I saved the article to discuss with my fall classes. The semester started, I shared the piece, and I’m stunned how passionate so many students are about thrifting!

However, on the first day of Personal Selling class, before I even mentioned the article, I asked each person to ‘sell us on something important to you.’ With great enthusiasm, a student named Brooke shared how much she enjoyed thrifting. Her tremendous passion for the practice was obvious to all, and very surprising to me.

My impression had long been that shopping for secondhand items was something mostly people on very limited budgets did out of necessity, to save money. Similarly, those who did frequent aftermarket sellers certainly wouldn’t brag about what they’d bought. Apparently, that stigma has subsided, and college students, some of whom come from affluent families, are among those most active in propagating thrifting’s new-found popularity.

To get a better picture of thrifting behavior among college students, I created a brief online survey that I shared with my four classes; about 70 students completed it. The results revealed some surprising behavior, for instance:

70.4% of students had purchased used clothing three or more times, and 54.9% had done so seven or more times.
The most likely places to purchase used clothing were traditional thrift stores like Goodwill and Salvation Army (39.4%), followed by retailers and brands that sell both new and used clothes, such as H&M and Levi’s (33.8%), then consignment stores (22.5%), and finally flea-markets (7.1%).
The strongest motivations for buying used clothing were cost (49.3%), followed by fashion (16.9%), then desire for old/vintage (11.27%), then impact of influencers (2.8%), and last environmental concerns (1.4%).

Before the survey, I didn’t think that so many college students were actively thrifting. To my surprise, only 9.9% of those who responded, said they’ve never purchased used clothing. I was also surprised that the places they thrift are rather evenly distributed.

Comparing the two different findings, it’s remarkable that the percentage of those who are very likely to frequent even the least popular thrifting place, flea-markets (7.1%), is not much lower than the portion of people who have never thrifted (9.9%).

On one hand, seeing cost emerge as the top motivator for thrifting was not surprising; however, I had expected its percentage to be even higher, e.g., 90% or more—again, I always thought that saving money was the only reason people purchased used clothing.

As it turns out, the desires to be fashionable and to own old/vintage clothing were also very compelling. Along those lines, I realized that my simple survey failed to ask about what may be one of the most important motivations!

At the end of the survey, an open-ended question invited respondents to share any other thoughts about thrifting. Seventeen students seized the opportunity and offered responses that included the following:

“I love it so much!”
“I love to thrift and over half of my closet is thrifted.”
“Very cheap way of finding trendy clothes”
“It’s how I get 90% of my clothes.”
“I love that I can find articles of clothing that no one else is likely to have. Thrift finds are one of a kind. I also buy clothes from stores like Target, but my purchases [there] are not as unique [emphasis added] because other people have the ability to buy the same thing. Thrifting grants me a more unique [emphasis added] wardrobe!”
At least 50% of my clothes are thrifted, I absolutely love thrifting - both because it limits waste in the fashion industry and because it’s fun! [emphasis added]

The last two comments contained two words that were both eye-opening and full of marketing implications:

1) Unique: I remember, not long ago, when young people wanted to look like everyone else. To be one of the few people who didn’t have the popular brands of sneakers or jeans was often an ostracizing experience.

Now it seems that many Gen Zers want to own clothing that not everyone else is wearing. Moreover, items that are one-of-a-kind, like those that can be found through thrifting, are even better, as they help express individual identity, which mass marketed products can’t easily accomplish.

2) Fun: In my thrifting survey, I kind of included a question about wanting unique clothing (“old/vintage”), but I completely overlooked the idea that members of Gen Z thrift because they enjoy the thrill of the experience.

For many, thrifting is a kind of treasure hunt in which they may or may not know exactly what they’re looking for, and what they find may be a complete surprise. It’s exciting for almost anyone to come across something special that others are unlikely to locate.

Both of these motives, as well as some of the others, are instrumental to the thrifting behavior of Brooke, introduced above, who has been buying secondhand products for 3-4 years and goes thrifting once every two or three weeks. In those outings, Brooke has found used bargains on everything from American Eagle clothing, to Ugg boots, to Vera Bradley bookbags.

Cost is certainly a motivation for Brooke; in fact, she says she loves saving money and showing people the great buys she gets for ¾ of regular retail prices. She also says that she now has “a hard time spending full price on clothing at retail stores.” However, Brooke also enjoys the excitement of thrifting:

“I get a thrill in not knowing what I’m going to find. You don’t know if you’ll walk in and find brand new Nike shoes for $40 or Lululemon leggings for $30, and that’s the fun in thrift shopping, the unknowns.”

There’s little question that many members of Gen Z enjoy thrifting for a variety of reasons, but what can/should marketers do with that consumption behavior? After all, most clothing brands are in the business of selling new clothes, not used ones. Some, however, have found ways to do both, and apparently make money.

One of those brands is the iconic blue jean maker Levi’s, which has made an entire enterprise out of buying back and reselling its used denim. The company runs a well-developed website, Levi’s SecondHand where it resells its classic jeans, jean shorts, denim jackets, and more.

Even though they’re used, the items aren’t cheap. For instance, the site sells preowned men’s original fit 501 jeans for $38. On a recent Labor Day sale, Macy’s offered the same jeans new for $41.70, or less than $4 more. Levi’s used product site also sells Vintage 501 Shorts for a pricey $78 a pair.

However, a webpage that describes Levi’s SecondHand explains why someone would want to pay a premium for preowned: “Denim from past seasons that’s already beat-up and broken in. In other words, perfect.”—That sentiment is very similar to the survey finding mentioned above about generation Z liking clothes that are old, vintage, and unique.

The company also touts several other advantages of SecondHand, especially sustainability:

“If everybody bought one used item this year, instead of buying new, it would save 449 million pounds of waste.”

“Levi’s SecondHand keeps coveted pieces in circulation. It’s all about connecting people to timeless styles they otherwise may not have found, and most importantly, saving clothing from going into a landfill. Old denim has never looked better.”

A big question that remains is if selling secondhand is sustainable for Levi’s. Sure, used denim may be what consumers want and what the environment needs, but can the company make money in the clothing aftermarket? If not, the program has little potential.

Levi’s SecondHand isn’t yet a year old, so longevity is still not the best indicator. However, if the company is successful selling some used products for only a few dollars less than they sell for new, and others for even more, it seems likely that the firm, free from manufacturing costs and with relatively little added overhead, must make a healthy margin on each piece and turn a profit on the program as a whole. Interestingly, over the past year Levi’s stock price has increased significantly, from $12/share on September 21, 2020, to $26.50/share on September 6, 2021.

Can other clothing companies pull off a secondhand program like Levi’s? Few have the history and brand equity that the iconic jean maker enjoys; however, consumers’ appetite for used clothing and the favorable cashflow suggested above serve as an invitation to other suppliers. Furthermore, the fact that those who have entered the aftermarket include clothing retailers J.C. Penney, Macy’s, Madewell, and Nordstrom, as well as the furniture behemoth IKEA, suggests the viability of selling secondhand.

When you think about it, it’s not unusual for manufacturers and new product retailers to sell used products. Auto dealerships have been doing so for a century or more. Part of the reason people are willing to pay so much for new cars is that they know when they’re done driving them, someone else will buy them. Whether it’s Levi’s or Lexus, high resale value is a hallmark of a strong brand.

Still, an important moral issue remains, which a second member of Gen Z brought to my attention. Katie, also a marketing student of mine, helped me see that consumers have a responsibility to ‘thrift ethically.’ Inspired by a variety of posts she’d seen on Instagram and a visit to a thrift store in Colorado, Katie suggested that consumers shouldn’t shop in “low-volume, high-populated areas” and that they should avoid patronizing secondhand places “outside of their fiscal demographic."

The overarching reason for these sensitivities is that some desirable-brand item that we buy in a thrift shop as a ‘little luxury’ might be the same item that a more impoverished person would buy out of necessity. As consumers, we are often accustomed to there being plenty of products for everyone, but Katie reminded me that what we buy secondhand may be taking something away from someone who needs it more.

Of course, not every product lends itself to a profitable aftermarket, but many do. Consequently, for the sake of environmental, financial, and social stewardship, more companies and consumers should consider how they might responsively market and purchase preowned products. Whether new or used, items that offer value to buyers and profit to sellers, can be considered “Mindful Marketing.”

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