Equinox and SoulCycle are the latest targets of a celebrity- and activist-fueled boycott — one that could actually make a dent when it comes time to attract new gym-goers and retain existing customers, marketing experts say.
Many consumers, celebrities included, disavowed the luxury fitness brands last week in light of billionaire Stephen Ross, the majority owner of Equinox Fitness’s parent Related Companies, hosting a Southampton, N.Y. fundraiser for President Trump last week. (The Equinox Fitness umbrella includes subsidiaries Equinox and SoulCycle, as well as Blink Fitness and PURE Yoga.)
“Everyone who cancels their Equinox and Soul Cycle memberships, meet me at the library. bring weights,” cookbook author and media personality Chrissy Teigen tweeted
News of Ross’s fundraiser also incensed many LGBTQ people, with whom the fitness brands are popular, given the Trump administration’s attempts to undermine LGBTQ rights. Equinox has supported LGBTQ charities and courted the community in its marketing; SoulCycle, whose CEO Melanie Whelan has previously tried to portray the brand as apolitical, has partnered with GLAAD and sold Pride Month fanny packs and bandanas.
“There are a handful of billionaires who own everything and many support Trump. Practically speaking, it’s probably impossible to completely avoid them,” tweeted comedian Billy Eichner, who is gay. “But considering @Equinox’s clientele and how they’ve pandered to us, this one feels particularly hypocritical and shameful.”
Spokespeople for the company did not respond to a MarketWatch request for further comment. In a statement posted to Twitter, Equinox distanced itself from Ross.
“Equinox and SoulCycle have nothing to do with the event and do not support it. As is consistent with our policies, no company profits are used to fund politicians,” the statement read. “In fact, we are committed to all our members and the communities we live in. We believe in tolerance and equality, and will always stay true to those values. Mr. Ross is a passive investor and is not involved in the management of either business.”
Ross’s event, along with another Hamptons fundraiser, raised $12 million for Trump’s re-election, according to Republican National Committee chairwoman Ronna McDaniel. The president reportedly even addressed the backlash: “Steve Ross got into a little bit of trouble this week,” he said, according to the New York Post. “I said, ‘Steve, welcome to the world of politics!’”
How consumer boycotts can hurt — or help — a company
The Equinox boycott marked the latest furor over a company, executive or owner’s stance on a polarizing political or social issue.
“People have traditionally exercised their political will as citizens when they go vote,” Neeru Paharia, an associate marketing professor at Georgetown University, told MarketWatch. “Now there’s a trend where people are exercising their citizenship and their political efficacy in the marketplace, and they’re using their dollars as a way to vote, as a way to make a political statement.”
For example, Grab Your Wallet, a boycott effort led by activist Shannon Coulter, launched in October 2016 to motivate companies and their leaders to sever financial ties with the Trump family. More than 70 businesses have been removed from the boycott list, usually after ending those relationships, Coulter said Sunday in an announcement that she had begun adding new companies.
Boycotts don’t always hurt a company’s revenue. Though Chick-fil-A faced a boycott in 2012 over multiple instances of its owner expressing anti-gay beliefs, the company also attracted business from like-minded chicken eaters. It’s the reigning favorite fast-food joint in America, with sales increasing from $8.97 billion in 2017 to $10.18 billion in 2018 and outstripping Taco Bell
Subway and Burger King
also faced a boycott — including some customers burning shoes they had already purchased — after centering a 2018 “Just Do It” ad campaign around former NFL player Colin Kaepernick, who led athletes protesting police brutality and racial injustice by kneeling for the national anthem. The company’s online sales took an initial hit before increasing 31%.
whose reputation tanked after the 2013 documentary “Blackfish” exposed the theme park’s alleged treatment of whales in captivity, appeared to have rebounded by last year, with earnings that beat most analysts’ expectations, which were in part helped by a small increase in attendance.
But boycotts generally seem to impact a company by damaging their reputation, said Brayden King, a Northwestern University management professor who studies boycotts. “The more news there is about a boycott, the more potentially damaging it is to a company’s reputation,” King told MarketWatch.
“In reality, very, very few boycotts adversely affect sales in a way that we can see,” agreed Mary-Hunter McDonnell, an assistant professor of management at the University of Pennsylvania. Companies fear boycotts, she suggested, “because of the more diffuse reputational threat that they can present.”
Boycotts can also hurt firms’ access to politicians through “guilt by association,” McDonnell’s research has shown, by “increasing rejected corporate campaign contributions, decreasing opportunities to testify in congressional hearings, and reducing awarded government contracts.”
“Any time you see companies that are facing some adverse reputational dilemma, politicians very quickly distance themselves from that company,” she said.
What factors determine whether a company benefits or suffers
Some firms that have bounced back quickly from boycotts did so “because they have a darn good product” and loyal customers, said Rhonda Reger, a professor of management at the University of Missouri. In other cases, market power can help a company endure PR turbulence, as United Airlines
did in 2017 after video emerged of a passenger being forcibly dragged down the aisle of a plane, she said. “If you’re flying on certain routes, you just don’t have a lot of choices,” Reger said.
Sometimes, she added, there’s just not much overlap between the people who boycott a company and the company’s core customers.
And while social media has amplified activists’ ability to spread their message, it’s also easy for a boycott to fade from attention in a rapid 24-hour news cycle, King said. “One of the things companies are discovering is if you don’t like the boycott … just wait awhile, and eventually the public’s attention will shift to something else,” he said.
But while boycotts may be hard to sustain, one factor that helps drive them is the perception that a company has been hypocritical, said Daniel Korschun, an associate professor of marketing at Drexel University. “It’s not just that they’re reacting [to] whether they agree or not,” Korschun told MarketWatch. “They’re looking at how honest they feel the company is being, and they’re extending that to the rest of the consumer relationship.”
In the case of Equinox, he said, “we have a company that is giving to opposite sides of the political spectrum at the same time.” “That inconsistency is very problematic to people, because they don’t know where the company stands,” Korschun said.
Companies that tend to weather the boycott storm are ones that can reconcile their inconsistencies by explaining their reasoning or taking action to rectify the situation, he said. Nike has made its stance on social issues very clear, he said; Chick-fil-A, on the other end of the spectrum, has also been open about its views.
“People are surprisingly tolerant of companies taking stands, even on things they disagree with,” Korschun said. “I think we overemphasize the importance of agreeing with brands. What really bothers people is dishonesty.”
How Equinox could take a hit
Chick-fil-A fans may have rallied around the chicken chain in a “buycott” counter-movement, but Paharia doubts the same will happen with Equinox. The boycotting effect may be stronger than any hypothetical buycotting effect by Trump supporters, she said.
“When you look at the consumer base and where these facilities are located, it seems like they’re looking at mostly a wealthy, urban phenomenon, which tends to be pretty liberal in its demographic,” she said. “If you look at the segmentation that way, it seems more likely you’re going to lose people than you’re going to gain people.”
Korschun also predicts the fitness chains will face employee-retention problems, including with trainers. “They have a choice of where to work,” he said. “I suspect that many of those will start to become uncomfortable being a trainer at the company, and some of them will take their customers with them to other places.”
The nature of classes purchased in packages and a membership-based fitness program makes it possible that the boycott’s consequences will “unfold over a series of weeks and months” as new customers sign up and existing ones decide whether to continue, Korschun said.
“We’re going to see how strong the reaction really is at the beginning of next year, when people tend to switch gyms and tend to start a new fitness program,” he added.
By then, however, it’s also possible that Equinox could benefit from an easily distracted public amid the fast-moving news cycle.