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Corporate America speaking out on social issues, getting results

| Saturday, July 4, 2015, 4:51 p.m.

When Donald Trump called Mexican immigrants rapists and drug dealers while announcing his presidential run, it wasn't his fellow Republicans, but companies such as NBCUniversal and Macy's who most closely held his feet to the fire.

And while South Carolina politicians debated whether the Confederate flag should come down at the state's capitol complex, Wal-Mart and Sears were rushing to remove it from their shelves and websites.

Big businesses have lately been proactive, even aggressive, in taking a stand on the social and political issues that have given new fire to America's long-simmering culture wars. From trumpeting their support for same-sex marriage on social media to urging Congress to modernize the nation's immigration system, some of America's biggest brands are coming off the sidelines to wade into contentious policy debates, a change in posture that reflects shifting customer expectations.

“Consumers have been judging companies more and more by their social policies, their economic policies, that's become a big part of decision-making” of where they spend their money, said George Belch, a professor of marketing strategy at San Diego State University.

This shift is not just a feel-good measure, analysts said, but often good business.

When department store giant Macy's moved Wednesday to sever its business ties with Trump, the company said it was because it was “disappointed and distressed” by his “disparaging characterizations” of Mexican immigrants.

In a statement, Trump blamed the Macy's move on “pressure being put on them by outside sources.” An online MoveOn.org petition calling for the end of Trump's line gained more than 728,000 signatures, and Latino advocacy group Presente.org demanded that the chain “take a stand against discrimination.”

Trump painted the breakup as partially his idea, in much the same way he did when, earlier in the week, NBCUniversal parted ways with him, saying it would no longer air his Miss USA and Miss Universe beauty pageants.

“While selling Trump ties and shirts at Macy's is a small business in terms of dollar volume,” Trump said, “my principles are far more important and therefore much more valuable.”

Macy's had clear incentives to walk away from Trump, whose menswear line it has carried since 2004. The chain has been especially focused on winning over Latino shoppers. The company last month said its new private-label line designed to appeal to Latina women, a collaboration with Latina pop superstar Thalia Sodi, has so far been a “huge success.”

Just as the Macy's move was decisive, so too were the actions taken by several retailers to get rid of merchandise bearing the Confederate flag in response to the massacre of nine people praying in a Charleston church, which authorities have called a racist hate crime.

While Sears did not carry any Confederate-flag-emblazoned items in its stores, it did have a small number of them on its online marketplace, which is open to third-party sellers. Chris Brathwaite, a company spokesman, said that as soon as Sears heard rival Wal-Mart was pulling such items, it moved quickly to evaluate its own policies and decided to get rid of items with Confederate-flag imagery.

Speaking out

There has been a steady drumbeat of cases in which businesses put muscle behind a social issue.

The U.S. Chamber of Commerce, in letters signed by Apple, McDonald's and Marriott, as well as hundreds of other businesses, urged Congress last year to swiftly modernize America's immigration system. When Apple chief executive Tim Cook publicly declared that he was gay, he reinforced the tech giant's position as a central voice on discrimination and human rights.

Few companies have shown this symbolic sweep as loudly and surprisingly as Wal-Mart, whose long reign as the world's biggest retailer has been largely marked by virtual silence on social issues.

So far this year, the Bentonville, Ark.-based company has vigorously fought that state's religious freedom law, which critics said would have allowed businesses to refuse service to gay customers, and banished Confederate-flag bandannas, swimsuits, belt buckles and other merchandise from its shelves.

Shaping conversation

Wal-Mart's resistance to the Arkansas legislation was credited with turning the political tide against the bill in its home state. It was later passed with amended language to address opponents' concerns. Chief Executive Doug McMillon, in a statement in March, said the law threatened to “undermine the spirit of inclusion ... and does not reflect the values we proudly uphold.”

Its resistance to the Confederate flag may bring broader impact. Charles Fishman, author of “The Wal-Mart Effect,” told The Washington Post that the company “is not just following the cultural conversation, they're shaping it.”

Corporate America's strategy toward social issues has been hatched as social media establishes a real-time barometer for consumer reactions to news or product issues.

“In the past, decisions like this would've been a little bit more seat-of-the-pants,” Belch said. “Today, every company has social-media monitoring tools in place” and “they're constantly out there looking for what's being said.”

They're not just watching that conversation but joining it. Brands from Gap to Target and Procter & Gamble took to Twitter with rainbow-bedecked messages backing the high court ruling legalizing same-sex marriage.

These moves are not without risk. Starbucks abandoned a campaign last year for baristas to chat up customers about race relations. Customers didn't want a side of politics with their frappuccino, and the company said workers no longer needed to write #racetogether on customers' coffee cups.

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