March 30, 2022
Shortly after Russia’s largest foreign investor, BP, pulled out of Russia to protest Vladimir Putin’s predatory invasion of Ukraine, hundreds of global brands began to bravely face off the belligerent bear. One notable exception at the time was Japanese fashion retailer Uniqlo.
“There should never be war; every country should oppose it,” Tadashi Yanai, founder of Fast Retailing, which owns Uniqlo, told Japan’s Nikkei newspaper. “Clothing is a necessity of life. The people of Russia have the same right to live as we do.”
Major media outlets seized on Yanai’s comments, which drew backlash over social networks including LinkedIn. Uniqlo has 49 stores in Russia, and many people felt the brand was trying to protect profits rather than doing the right thing. A few days later, in an about-face, Fast Retailing announced it would cease operations in Russia.
Let’s be clear: We’re not piling on Fast Retailing and other brands that either reversed course or were slow to react. (Think: #BoycottMcDonalds and #BoycottCocaCola.) Rather, this is more about teachable moments for CMOs.
Lessons need to be learned quickly. We’ve never seen global brands weaponize commerce with such velocity. Brands have been overrun by rumors and innuendo flying around the Internet. Digital denizens hell-bent on directing their rage aren’t pausing to consider all the complex issues involved in pulling out of Russia.
Given this backdrop, what should brands do? Is marketing moving fast enough and drawing on contingency plans for responsible, proactive corporate response and action?
What we do know for certain is that brands must take a stand. There’s no hedging here. CMOs have been singing the praises of a purpose-driven culture for years, and now everyone — employees, customers, channel partners and investors — expects to see substance underscoring the words.
Even for brands not in Russia, people still want them to do something. This might mean raising money, matching donations, providing clothing and housing, offering transportation services, underwriting programs, and other materially helpful actions that help Ukrainians during this conflict. There are too many lives affected, too many lives lost to stay silent. Every brand needs to demonstrate corporate social responsibility.
The tricky part is balancing quick action with careful consideration. Pulling out of Russia, for instance, is not as easy as it seems. There’s a cauldron of forces and factors that brands have to take into account: legal, ethical, compliance, structural, operational, financial and political.
Some brands are restricted by complex franchise or joint-venture deals preventing them from withdrawing completely. Foreign generic suppliers from China and other countries are champing at the bit to step into the Russian brand replacement market. Some French firms are staying in Russia, claiming they’re abiding by sanctions rules and the French government’s guidance. Russia plans to seize assets of western companies that pull out and may even arrest employees.
“We will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them,” said Dave Robertson, operating chief at Koch Industries, explaining why the company is staying in Russia.
There are humanitarian reasons for staying in Russia. Pharmaceutical companies continue to supply essential medications for diseases such as diabetes and cancer in Russia. P&G said it will only sell products in Russia that focus on “basic health, hygiene and personal care items needed by the many Russian families who depend on them in their daily lives.” French brands in the agro-business sector say they play an important role in the food supply. In light of these stances, Yanai’s comments about clothing the Russian people no longer sound unreasonable.
On the other hand, influential voices led by Yale University management professor Jeffrey Sonnenfeld oppose any brand staying in Russia. “Humanitarian concerns for the general Russian citizenry” are missing the point of the sanctions, Sonnenfeld reportedly said. “We intend hardship. That’s the idea, because we want to shut down this economy.”
The lesson for CMOs is this: Once a decision has been made, marketing needs to communicate and clarify what the brand is doing and why. CMOs have to define and shape the conversation, especially if their brand’s position isn’t a popular one. It’s important to show empathy.
Of course, none of this is easy.
If brands say they’re only going to sell “bare essentials” in Russia, what counts as essential? Ice cream? Cosmetics? Potato chips? Sweaters? Facial cleansers? Already we’re seeing sugar, diapers and pet food among items in high demand in Russia. CMOs have to get out in front of this, articulate your brand’s reasoning, and stay the course in the face of criticism.
Brands also must be honest and transparent lest they appear duplicitous. When a top Ukrainian official tweeted about a conversation he had with a CEO about continuing to sell in Russia, who he says showed no understanding of the side effects for doing so, the brand responded to press inquiries by saying it considered such conversations to be private. That’s just not good enough.
We, at the CMO Council, hope many more global stakeholders show the courage and conviction needed to curtail human suffering and take a stand against Russian aggression. Everyone is outraged. And so the onus falls on marketing to craft clear and compelling messages that explain complex issues in a way that emotionally charged people can understand. Marketing is the torch bearer in these perilous times.
Tom Kaneshige is the Chief Content Officer at the CMO Council. He creates all forms of digital thought leadership content that helps growth and revenue officers, line of business leaders, and chief marketers succeed in their rapidly evolving roles. You can reach him at email@example.com.
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