Impact? A New Study Sheds Light
By INSTITUTE FOR OPERATIONS
RESEARCH AND THE MANAGEMENT SCIENCES
A boycott is a form of protest in which individuals or groups
refuse to buy or use a particular product or service in order to show their
opposition to a company or entity.
ACLU
Boycotts are often organized as a way to apply pressure on companies or governments to change their policies or practices. They can be motivated by a wide range of issues, such as human rights violations, environmental concerns, or political beliefs.
The
political controversy surrounding Goya CEO’s political statements in 2020 has
shed light on the question.
The CEO of Goya, a well-known Latin food brand, publicly endorsed
then-president Donald Trump during a campaign event in the 2020 US presidential
election. This sparked a boycott and a counter “buycott” movement in support of
the brand.
Do such boycotts or “buycotts” have any impact on brand sales?
A recent study examined the impact of these actions on Goya’s sales in both the short and long term. The researchers found that the immediate increase in sales due to the buycott was significant, but not sustained over time. On the other hand, the boycott had a temporary impact on sales in heavily Democratic counties.
The researchers’ study, which was recently published in the
journal Marketing Science, was conducted by Jūra Liaukonytė
of Cornell University,
Anna Tuchman of Northwestern University,
and Xinrong Zhu of the Imperial College Business
School in London.
“After the CEO made his statements, Goya sales temporarily
increased by 22%,” says Jūra Liaukonytė. “But this net sales boost fully
dissipated within three weeks.”
Anna Tuchman adds, “There was a lack of empirical evidence on
buycotts, and we wanted to know, ‘What was the net effect of the boycott versus
the buycott movements on sales? How long did the sales impact last, and how did
it vary across local markets based on political affiliations?’”
To get the answers, the researchers analyzed sales data over time
and by market, as well as the rates of social media and news media activity on
the issue.
“Goya’s sales were historically stronger in more Democratic
markets,” says Xinrong Zhu. “Among consumer packaged goods (CPG) companies,
Goya is one of the most Democratic brands. Consistent with this, we found that
the boycott generated 75% more chatter on social media than the buycott. And
related media coverage was overwhelmingly dominated by the boycott narrative.”
Still, the researchers found that the actual sales response went
in the opposite direction, which suggested that in the case of political
consumerism, social media metrics may not be a good proxy for actual demand. In
fact, the buycott effect dominated the boycott effect, increasing the company’s
sales by around 22% on net in the weeks after the scandal. The effect, however,
was short-lived.
“We found that the temporary increase in Goya’s sales came from
consumers not traditionally thought of as the brand’s core customers,” says
Tuchman. “First-time Goya buyers were from heavily Republican areas who did not
continue buying the brand, and thus were not particularly valuable in the
longer term.”
In heavily Democratic counties, the researchers found that the
buycott effect was outlasted by a modest boycott effect that persisted up to
eight weeks after the event. At the same time, the study authors found that the
brand’s most valuable customers, Latinos, did not decrease their purchases of
Goya products.
Ultimately, neither the boycott nor buycott had a lasting impact
on sales.
Reference: “Frontiers: Spilling the Beans on Political
Consumerism: Do Social Media Boycotts and Buycotts Translate to Real Sales
Impact?” by Jūra Liaukonytė, Anna Tuchman and Xinrong Zhu, 11 August
2022, Marketing Science.
DOI: 10.1287/mksc.2022.1386