Commentary

Dick's Sporting Goods Proves The 'Noise' Of Social Media Can Give An Incomplete Signal

In mid-March, Dick’s Sporting Goods CEO Edward Stack expressed pessimism about his company’s prospects soon after announcing that Dick’s would stop selling assault-style rifles and high-capacity ammunition magazines after the Feb. 14 shooting in Parkland, Fla.

He indicated the decision was “not going to be positive from a traffic standpoint and from a sales standpoint,” as the company became the brunt of attacks and boycotts by gun owners and the National Rifle Association (NRA). Three months later, the company’s stock is trading at its highest level in more than 10 months, following reasonably good financial results announced May 30. 

We are not surprised.

We measure two types of consumer conversations — those happening in social media, as well as the ones happening face-to-face over kitchen tables and in workplace lunchrooms. While Dick’s was taking a beating on social media, offline conversations about the company became modestly more positive. Many consumers responded positively to the retailer’s new gun sale policies, while more were unaware of the controversy altogether.

This divergence is something we are seeing more and more in the Trump era. Nowadays, political polarization can lead to extreme reactions in social media that do not show up either in offline conversations or, just as importantly, in business results. Consider these examples:

  • Publix, the supermarket chain, saw social media conversations turn extremely negative in May. David Hogg, a student leader from the Parkland tragedy, organized a “die-in” protest in select Publix stores, demanding the company end campaign contributions to a strongly pro-gun candidate for governor, Adam Putnam. Despite the torrent of negative conversations on social media, the brand’s offline conversations have improved.
  • Delta Air Lines and MetLife both gained positive offline conversations after announcing the end of discount programs for NRA members, even though social media leaned extremely negative for the brands.
  • Starbucks’ highly public racial incident in Philadelphia followed by store closings last month for racial sensitivity training prompted a much bigger negative reaction in social media than offline.

All these cases fit a pattern we are seeing in which brands—including Macy’s, Nordstrom, Amazon, and Citibank—are getting embroiled in politically charged controversy. Notably, the pattern fits whether the social media outrage comes from the right (Dick’s, Delta, MetLife) or the left (Publix, Starbucks). In many cases, social media offers an exaggerated measure of the problem, and companies focusing on Twitter and Facebook as a measure of consumer opinion can make major mistakes.

Our analytics show that online and offline conversations have equally large impacts on consumer purchases, driving about 19% of all consumer sales. But as seen here and in a multitude of other examples, they can be two entirely different conversation ecosystems. When those signals diverge, a company is best served by focusing not only on the outrage erupting in social media, but also by listening to the real-world concerns and conversations of the customers they serve every day.

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