It’s getting to that time of year: not Christmas itself, but the bizarrely self-indulgent advert-waving competition between major high street retailers. Is John Lewis’s ad this year enough of a tear-jerker? Does M&S miss the mark? Why would Asda think having anything to do with Michael Bublé was a good idea?
One way to elevate yourself above the fray is by not engaging at all: by self-importantly opting out of the whole Christmas advertising business. That’s what Iceland have done this week. Is that decision a noble one? Or is there something more to it?
This week’s article
Why Iceland’s decision not to air a TV ad isn’t all it seems
There’s a chain of supermarkets in the UK called Iceland. They sell mostly frozen food to a budget-conscious consumer, and they’ve had a bit of a tough time of it recently. Rising energy costs are bad news in a business with low margins and lots of freezers; those increased costs wiped out the entirety of Iceland’s profits last year. The cost-of-living crisis has hit their lower-income shoppers particularly hard. And they’ve got lots of debt, which has become increasingly burdensome as interest rates have risen; they had over £500m worth of bonds downgraded to “distressed” status last year. All in all, a pretty crappy situation.
If you think of the options open to Iceland at this point, their hands are tied in lots of ways. They don’t have lots of cash to splash. They certainly don’t have enough money to do what supermarkets ordinarily love to do at this time of year: to make a glossy, celebrity-led Christmas advertising campaign and spend millions buying media for it, in the hope of capturing a share of that all-important festive pound. I’m sure they’d love to – and I’m sure it would be good for cashflow – but they simply can’t do it.
What’s interesting is to see Iceland draw attention to that fact. Amidst coverage of other supermarkets’ actual Christmas ad campaigns, a not insignificant amount of trade press column inches have been dedicated to Iceland’s non-campaign. But why would Iceland want to alert people to something that’s the result of their dire financial situation? Why would they announce that they’re not doing something, at a time when they’re not doing a large number of things – and for mostly undesirable reasons?
Iceland’s chairman Richard Walker, son of outspoken founder Malcolm, offers his explanation:
“As a business we were faced with a decision. Do we spend millions creating and sharing a TV advert or do we invest the money supporting our customers during the cost-of-living crisis? This was a no-brainer for us. I am grateful that as a family-run company, we can make the decisions we believe are right for our business and our customers.”
It sounds pretty noble when you put it like that! But that probably isn’t the reason why they did it, because we know that they had no alternative. The reason why they chose not to do a TV advert is immaterial, because they didn’t choose not to.
Taking something that you were going to do anyway, or that you had to do, and presenting it as a difficult, sacrificial choice to do the right thing, is incredibly common. Ben Thompson coined the term “strategy credit” to describe it. It’s hinted at in Bill Bernbach’s famous adage that “a principle isn’t a principle until it costs you money”. It’s more and more common in an era where businesses are expected to do some social good – but where doing good often competes with making money.
It’s not that Iceland have done anything wrong, or that their commitment to helping their customers with the cost-of-living crisis is anything less than sincere. It’s just that, when evaluating the decisions of organisations, we have to acknowledge the difference between doing the right thing and doing the easy thing. It’s a little more impressive to do the right thing when it’s not something that you would’ve done anyway.
Image: Wikipedia user Mutney, CC BY-SA 4.0.
This week’s four interesting links
I enjoyed this discussion between Rory Sutherland and everyone’s favourite softly spoken coffee YouTuber, James Hoffman.
One idea that stuck in my mind, from Rory:
“Consumer whimsy in aggregate leads to far better markets. If consumers all bought cars to the same formula, cars would be absolutely wonderful according to the five points that consumers factored in but dreadful according to every other aspect. Consumer whimsy contributes to quality and variety.”
Anne Helen Petersen on “the friendship dip”, that period of life where making and maintaining friendships becomes particularly hard:
“I call this period the The Friendship Dip. And I think it makes a lot of us miserable. First in our late 20s and 30s, when we don’t really have a name for what’s happening but can nevertheless feel it….and then in our late 30s, 40s, and 50s, as the extent of the wreckage becomes clear and we attempt to rebuild.”
I wrote last week about Sam Bankman-Fried and the corruption of noble causes. The LRB just published this tour de force from John Lanchester, reviewing both Michael Lewis’s Going Infinite and Zeke Faux’s Number Go Up. Lanchester is, it’s safe to say, no fan of SBF:
“Going Infinite is wildly entertaining, surprising multiple times on pretty much every page, but it adds up to a sad story, even a tragedy, for its central character and for all the people who lost so much thanks to his actions. Lewis, whom I know, is charming and amenable to charm; he likes SBF and is amused by him. I don’t feel the same, mainly because SBF, as well as being reckless with things that don’t belong to him, and deeply arrogant about his own intellectual superiority, is unredeemably careless about people. ‘The notion that other people don’t matter as much as I do felt like a stretch,’ he once said. A worthy insight, but SBF doesn’t act on it: in Going Infinite he repeatedly, compulsively, acts as if other people don’t matter at all. He plays video games during meetings and conversations, fails to be where he’s said he’ll be and do what he’s said he’ll do, and in general does exactly whatever he feels like doing, all the time. A detail: ‘I watched as Sam entered the empty townhouse, opened a closet, and, without so much as a glance at the row of empty hangers, tossed the ball of clothes onto the closet floor. We then drove together to the airport and returned to the Bahamas.’ The person whose job it will be to pick up those clothes, as far as SBF is concerned, does not exist.”
…and yet, by the end, he feels oddly sorry for him as he stares down the barrel of decades in prison. I felt exactly the same when reading Going Infinite. #