With a tweet that apparently came during a morning intelligence briefing, President Donald Trump on Wednesday sent a message to Nordstrom about its decision to wind down sales of daughter Ivanka Trump's eponymous merchandise line, creating a firestorm on social media.
“My daughter Ivanka has been treated so unfairly by @Nordstrom," Trump posted on his Twitter account Wednesday morning.
Nordstrom shares tumbled immediately after that tweet, but recovered within minutes to close 5% higher after Wednesday's closing bell.
The Trump brand has become a lightning rod for controversy, and Ivanka Trump’s company, from which the first daughter reportedly stepped down last month, is no longer escaping that problem. Its customers are increasingly polarized, as demonstrated by conflicting social media messages threatening retailers with boycotts when they do and when they don’t carry its apparel or jewelry. The firestorm was only stoked further by the president's comment on Twitter.
My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!— Donald J. Trump (@realDonaldTrump) February 8, 2017
Nordstrom responded with a statement saying again that its decision was based on the brand’s sales. “To reiterate what we’ve already shared when asked, we made this decision based on performance,” a Nordstrom spokesperson told Retail Dive. “Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn’t make good business sense for us to continue with the line for now. We've had a great relationship with the Ivanka Trump team. We’ve had open conversations with them over the past year to share what we've seen and Ivanka was personally informed of our decision in early January.”
Meanwhile, other retailers tried to find a political sweet spot in the matter. Regional department store Belk posted a statement Wednesday that its Ivanka Trump merchandise, while no longer sold on its website, would be featured in stores. And off-price retailer TJ Maxx reportedly is mixing its Ivanka Trump goods amongst its other apparel, pulling signs and dedicated racks from its floors, the New York Times reports. Macy’s is also under pressure to dump the first daughter’s brand.
In Nordstrom’s case, its comments about the line’s performance are bolstered by third-party data. Analytics firm Jumpshot tracked traffic to Ivanka Trump products on Macy's and Nordstrom since Jan. 1, 2016, and found that while traffic to Ivanka Trump products on Nordstrom was much higher than on Macy's between April 2016 and September 2016, traffic on Macy's has exceeded Nordstrom since October. While Macy's and Nordstrom both saw a spike in November, traffic to Ivanka Trump pages decreased on Nordstrom by about 14% in December and January, and increased on Macy's by about 18%.
“When you really look at the data around Ivanka Trump's brand and products, it is clear that Nordstorm made its decision due to performance, not to make a political statement,” Jumpshot vice president of marketing Randy Antin told Retail Dive in email. “That said, the timing of the decline does seem to align closely with the issues around the election and may have been impacted by consumers who have boycotted the brand.” That could make it more difficult for Macy’s to hide behind “performance” as a reason to cease sales, if and when it does.
Meanwhile, the turmoil extended to retailers that don’t carry Ivanka Trump merchandise. After Under Armour CEO Kevin Plank called President Trump “a real asset” for U.S. companies in an interview with CNBC, Under Armour’s most high-profile athlete, Golden State Warriors shooter Stephen Curry, responded “I agree with that description if you remove the ‘et’ from 'asset.'” Curry also told The San Jose Mercury News that he didn’t vote for Trump and that he’s concerned about Under Armour aligning itself with Trump’s values, though Plank’s work with Trump in and of itself isn’t his biggest concern.
Expect the Trump age to increasingly force retailers to recognize that "being political" goes beyond issues like safety in overseas factories, environmental sustainability and human rights, says retail futurist Doug Stephens.
“We live in a world where retailers are finding themselves having to become more politically responsive — whether they like it or not,” he told Retail Dive in an email. “Few issues, however, have been as as polarizing as Trump-branded merchandise. And just as America is divided what to make of the Trumps, it appears equally conflicted on how brands and retailers have chosen to respond to them. While some consumers applaud moves by TJ Maxx, Starbucks and Nordstrom, others propose to boycott the retailers themselves.”
And consumers are not just activated by boycott initiatives like the #GrabYourWallet campaign, which has taken credit for Nordstrom’s actions, Stephens said. As retailers are forced to respond, they must draw a good bead on their customers.
“Intuitively consumers want to feel that the brands they patronize share their social values,” Stephens explained. “Given the social, moral and ethical tumult created by Trump’s candidacy and now his presidency, brands are increasingly having to weigh in. This means that brands, more than ever, have to know and intimately understand their customer base. [Starbucks CEO] Howard Shultz, for example, likely had a very good sense that his customers would largely support his position on refugee hiring. Shultz tends to have a good gut for his customers’ sensibilities. This keen knowledge of customers is now table-stakes for CEOs in a politically charged climate.”
Accomplishing that will allow retailers to rise even when they’re pummeled by political firestorms. “As for the power of the presidency to ruin a brand, it’s worth noting that after the Trump Twitter tantrum, Nordstrom’s stock rebounded after four minutes and finished the day up,” Stephens said.