The uproar is focused on plans for an employee walkout tomorrow, organized after Wayfair CEO Niraj Shah said Wayfair would not stop selling to BCFS, a government contractor operating camps at the U.S. border.
More than 500 employees signed a letter making that request. In response to Shah’s refusal, they asked that the $86,000 it earns in profits be donated to RAICES, which provides legal aid to immigrants in Texas.
Many companies have been bashed from both the right and the left. But for a fast-growing company that’s struggling to hire all the millennials and centennials it needs to mail out those throw rugs and ottomans, the stakes may be higher for Wayfair than other consumer-goods companies.
Wayfair hasn’t responded to Marketing Daily’s request for comment. Stories about the walkout and the growing calls for a boycott hit media outlets worldwide.
On its Facebook page, the employee group is demanding Wayfair “cease all current and future business with contractors participating in the operation of migrant detention camps,” and “establish a code of ethics for B2B sales that empowers employees to act in accordance with Wayfair’s core values.”
The company’s decision is unlikely to have much of an impact on sales, says Phillip Haid, cofounder-CEO of Public Inc., a Toronto-based marketing agency. “I do think it will have a modest negative impact on brand perception as the company is clearly not living its values — values that its millennial audience care deeply about,” he tells Marketing Daily.
Social-media powerhouse Alexandria Ocasio-Cortez, the Democratic congresswoman from New York who has 4.5 million Twitter followers, weighed in, tweeting: “Wayfair workers couldn’t stomach they were making beds to cage children. They asked the company to stop. CEO said no…This is what solidarity looks like — a reminder that everyday people have real power, as long as we’re brave enough to use it.”
Donating profits might be a problem for the company.
While it has plenty of buzz and soaring sales — $1.94 billion in its most recent quarterly report, up from $1.4 billion — its losses are mounting, too. It posted a net loss of $200 million, almost double the $100.7 million it lost in the comparable period of the prior year.
Haid thinks Wayfair is disillusioning employees and seeding resentment. “Usually, this translates into a loss of employee retention and could possibly impact recruitment efforts,” he says.
More importantly, he says the company missed the boat by “not engaging in a dialogue with them and flatly declining the request” to donate those profits. He points out that a greater percentage of young workers choose to work with companies they believe in, citing a recent Economist survey, with 74% of next-generation employees saying they seek employers that work toward social change
Perhaps most troubling, especially for a company that positions itself as a tech leader, Wayfair “is signaling it is an old-school company in a new economy model.”
According to a recent Forrester study, organizations that can’t find trust from employees have trouble finding it with customers. Its Employee Experience Index finds that 85% of employees that agree with company values are productive at work, compared to 72% of total employees. Further, 76% of employees that agree with values recommend the company’s products, compared to 55% of total employees.