Gap's PR Falls Into Place While Wal-Mart's is a Mess
This month we profile two of the world's best-known brands in a classic face-off between proactive versus reactive public relations. Gap Inc. this week released a no-holds
barred, full disclosure report on its labor practices throughout the world. Its 2003 Social Responsibility Report is a model of how PR should be practiced. There was full
disclosure, with good, key messages embedded, including the news that the company terminated contracts with factories found in violation of its code of vendor conduct. The
resulting PR makes Gap appear ethical, concerned and morally superior to its competitors.
Wal-Mart, on the other hand, has embarked on what is clearly a very expensive PR push to change its image from a big bully cited for questionable labor practices (including
locking employees in at night) to a kinder, gentler retailer that is active in the community. The problem is the PR push is simply in reaction to stunning setbacks the retail
chain has received from voters and planning boards in communities where Wal-Mart wants to add new stores. Years of neglect have left the retail giant with poor community
relations, particularly with labor unions and neighborhood activists who have come together to stage remarkably effective protests that paint the company as costing more jobs than
it creates.
A good indicator of just how important Wal-Mart sees this effort is that its PR has been coupled with massive underwriting from National Public Radio that promotes Wal-Mart's
"good neighbor" message to NPR's notoriously highbrow audience. Measured in outputs, Wal-Mart certainly managed to place "good neighbor" pieces in several local papers, but
outcomes have been a different story. Recent votes in Chicago, Arizona and other communities have all gone against the company.
By Katie Delahaye Paine, CEO, KDPaine & Partners, Durham, New Hampshire. She can be reached at 603.868.1550; [email protected]
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Gap Inc.
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Criteria
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Grade
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Comments
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Advice
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| Extent of coverage | A | A search turned up hundreds of stories on the Gap's report in media outlets around the world. Almost all of them positioned the company as socially responsible, caring and concerned. |
Don't shy away from bad news. If it's newsworthy, reporters will cover it. And if they cover it -- and it contains your key messages -- it helps position the company as responsible and ethical. |
| Effectiveness of spokespeople | A | Gap CEO Paul Pressler used the company's annual meeting to release the report, guaranteeing pick up of his message that commerce and social responsibility don't have to be at odds. |
If you want to get key messages out, make sure they're coming out of the mouth of your most-visible spokesperson, ideally the CEO |
| Communication of key messages | A | If the Gap wanted to position itself as heads and shoulders above other retailers on the social responsibility scale, it succeeded. Almost every media outlet positioned the report as "first-ever" and positioned the company as caring and concerned. |
If you're using research to generate publicity, make sure that your messages are intrinsically tied to the subject of the report. In this case, the results were bad, so the company's statement that it had ended contracts with the companies where it had found labor violations proved Gap was concerned and responsible. |
| Management of negative messages | A | While the basic news was bad - labor violations are clearly rampant in the retail-clothing business -- Gap managed to attribute the bad news to the industry as a whole and not solely to the company. |
Normally, I'd say don't hide behind the "everyone does it" excuse but in this case, because they acted swiftly to correct problems AND the data backed up the message, the strategy worked. |
| Impact on consumers | B | For socially conscious consumers whose purchase decisions are influenced by CSR practices, this was a home run. For the millions of shoppers who don't care, it probably had little impact. |
Keep the target audience and objectives in mind at all time. The report was announced at the annual shareholders meeting, so clearly the purpose of this announcement was not necessarily to sell more shirts, but to boost the company's reputation. |
| Impact on shareholders | B | While Gap's share price dipped the day of the announcement, it's been trending upward ever since. | While there may be some correlation between share price and media coverage of a major announcement, don't count on it. |
| Impact on employees | B | Given that the purpose of the report was to improve labor conditions in factories, chances are good that most employees welcomed the news. (That is, unless you were an employee in one of the factories whose contract was terminated and got laid off.) Additionally, CSR is a key factor in hiring these days, and the Gap's ability to attract the best and the brightest would certainly have increased as a result of its improved image |
All the data shows that the better reputation you have -- particularly on a local level -- the better your ability to attract and keep talent, so whatever you can do to promote your ethical behavior you should do. |
| Overall score | A- | The Gap has always been on the leading edge of good corporate communications and this is just one more example of why its actions should be followed. |
This is a classic case of how to do PR right. It should serve as a model for other corporations to follow moving forward. |
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Wal-Mart
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Criteria
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Grade
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Comments
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Advice
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| Extent of coverage | D | Most media outlets -- including national ones --have been covering Wal-Mart's setbacks pretty closely. | When you're the biggest guy on the block you present the largest target. Especially if you've been riding high of late, you can expect the media to take whatever pot shots they can. |
| Effectiveness of spokespeople | C | Local spokespeople for the retailer have claimed that Wal-Mart doesn't "run roughshod over folks," but the media has not provided any evidence to the contrary. |
Just getting your spokesperson quoted isn't enough. To be effective, you need to get evidence into the story as well. |
| Communication of key messages | C | While they've paid to get their message out via NPR, the media coverage has painted a completely opposite picture: an uncaring company defying the wishes of local communities. |
Mixed messages only confuse your audience. When advertising contradicts editorial content, research shows that the advertising only serves to further antagonize and alienate the reader/viewer. |
| Management of negative messages | D | In story after story, the opposition has gotten its messages across, leaving Wal-Mart sounding defensive. | When the opposition is local community activists with deep ties to local reporters and local influencers, they're going to be far more credible than the out of town spokesperson you parachute in to manage the crisis. |
| Impact on consumers | B | Chances are the folks who shop at Wal-Mart will continue to shop at Wal-Mart. This battle is not for the hearts and minds of the consumers, but rather for the hearts and minds of planning boards and local voters. |
Don't forget the importance of local influencers. They have the ear of the media, frequently serving as "reliable sources" to local journalists. |
| Impact on shareholders | B | One or two setbacks here and there probably don't faze the shareholders much when profits are up 30%. But if the setbacks get to be too many they'll start to impact strategic plans. Then the shareholders will take notice. Clearly, someone was worried or it wouldn't have launched such a major PR initiative. |
Shareholders will always focus on profits and share price first. But when things go badly, they'll quickly blame "bad PR" as a reason for a poor reputation. In fact, reputation is based on relationships and if you haven't invested in good relationships on a local basis, you can't expect the local community to roll out the red carpet when you try to implement your expansion plans. |
| Impact on employees | D | Given that the opposition continually cites bad labor practices as one reason to oppose Wal-Mart stores, sooner or later rank-and-file employees will begin to get the message that their employer is not the employer of choice |
Employees read local papers and watch the local TV news. They get their information from friends and family who are reading and watching the same stories. If you are looking to expand, build or hire in a community you have to pay attention to the local media. |
| Overall score | D+ | In its community relations, Wal-Mart has too often come across as an arrogant, out of town bully for its reputation to change any time soon. |
Beware of trying to "buy good PR or "fix a reputation" in a hurry. No amount of money can fix a reputation overnight. Reputations and relationships are built through time, and unless they have solid foundations, they can be destroyed in a day. |