B (2:58)

Melissa, there were many inquiries this week and yours was one of the ones that flew to the top of my list as a yes.

A (3:03)

Oh, thank you, Melissa. This one's yours. What's the story with American Eagle? And give us some more context and maybe what's getting buried underneath all the noise.

C (3:11)

So before we dive in, let's set the scene. American Eagle Outfitters, aka AE Star, started back in 1977 as your classic mall brand. By the early 2000s, it had become the go to for teen denim thanks to its affordable, laid back, cool kid aesthetic. Graphic tees, ripped jeans and hanging out at the food court. That's what it was all about. But AE didn't just ride the wave, they expanded smartly. In the 2010s, they launched Aerie, their loungewear and intimates brand. And that's where the magic really happened. Airy rejected the airbrushed supermodel look. We can have that as a topic another day because now Vogue just talked about AI models and lean into body positivity. Real people, real bodies, no retouching.

B (3:58)

And it worked.

C (3:59)

26 straight quarters of double digit growth before the pandemic. Fast forward to today and the picture is a little complicated. AE is now a $5 billion dollar business, but it's facing serious headwinds. Mall traffic is way down. As we've discussed, about 40% of their stores are struggling Class B and C malls. Gen Z, they're thrift shopping. I have Gen Z kids. They haven't bought anything that's not secondhand in over five years. Scrolling TikTok, you know, buying from influencers and living online. So AE has been trying to pivot closing mall stores, going off mall running heavy promotions like this one. But it's squeezing margins. So in quarter four of 2023, profits were down and discounting cut their margins to just over 34%. A very noticeable drop from pre pandemic highs. But here's the real pressure point. Over 60% of AE's customers today are Gen Z, and Gen Z doesn't play around. According to Morning Consult, there are three times more likely than millennials to boycott brands over missteps. So when American Eagle rolled out their Sydney Sweeney campaign with the tagline y, you've got the genes, we've got the genes, the Internet cried foul over the latest, even eugenics adjacent phrasing. It wasn't just about one bad ad and it's about whether AE really gets the customer they're trying to reach today. You know, I just shared what the ad was. Social media backlash was quick, you know, and it's been very interesting because what has American Eagle's response been? And we'll get into that versus what some of the other brands that are parallel to American Eagle have done. So Levi's. Wow. Smart, smartly had. They now have a ad with Beyonce that says Beyonce has great jeans.

B (5:58)

Right.

C (5:59)

J E A N S. Right. So they're jumping on that. And Old Navy came in with a very beautiful group of all different shapes and sizes, colors, and kind of said the same thing about the, you know, kind of did something, a play on the words with. With jeans, using the real jeans, like denim jeans, and really kind of getting. Jumping on the bandwagon. So I think it's an interesting topic for us to try to fix today. And Lola, you have been fairly outspoken about your take on the situation. I would love for you to share some of your overall thoughts for us to start to dive in on culture, operations, marketing, all the things that we need to think about as we try to fix this.

B (6:46)

Absolutely. I mean, I think where we need to start is the role of a marketer. Right. I remember my very first marketing job, fresh out of college. Now I could have been a college athlete, but I wasn't. I knew nothing about the Gatorade core consumer. I knew nothing about the Gatorade sort of ecosystem. But what I was there to learn in the PepsiCo sort of training ecosystem of marketers was to decenter myself and learn about the person, the people that we are trying to market to and excite and engage. And I think it was actually a brilliant first placement of a role because the idea was nothing that I personally thought or knew really should have had anything to do with my approach to marketing this brand. And I think that's where we start to get really confused. This isn't about, and I'm not being ageist at all, but I'm just being factual. What middle Aged white men think about Sydney Sweeney. I really don't want to spend much time thinking about that, quite frankly, because it's all dodgy. But, you know, she's a beautiful model, just like many models are. But the question is, does she as an individual, given some of the backstory on her alignment with maga, we won't even go into that. But does she alone, as one individual celebrity, connect with AE's target audience as a whole in a world where generation Z and A are known to be the most diverse generations in history, especially at a company where, like you rightly said, they very much understand that the connection point between inclusivity and business results, they've done it with Aaron. So what mystifies me is why this shift back to the other guardrail? Is it driven by wanting to appease the powers that be in Washington, or is it driven by. Unfortunately, what we're seeing across our industry in a lot of instances, is people wanting to go back to a comfort zone where those in charge no longer have to think about things that make them uncomfortable or that they don't really understand. Inclusive inclusivity being one of those things. So I think there's a lot of groupthink that can happen when you're not centering your actual consumer, and that's what we're seeing here. Like you said, it would have been so easy to take the gap approach. They did it in about five days. If you look at all of the. A lot of the responses on LinkedIn, people have immediately been brainstorming. This could have been so easy. Another play on genes and jeans that represented more people. And not only is it the right moral thing to do, let's take that out of the window. I'm an NYU Stern mba. You know, whether or not I believe capitalism is the best system for our economy, it's the one that we're in. And so if you're thinking purely from a standpoint of how do I grow my pie, how do I protect my market share, how do I mitigate some of the risks of continuing to decline that you spoke about so eloquently as far as their numbers, well, what do I need to do? I need to engage more people who might buy these jeans. And most of the people who are loving this campaign, if you just look across social media, are not those people. Look at the responses to the brand posts, and I think that's one of the, you know, without having a ton of data, which we're going to start to see folks who have access to tools, who can actually show us the connection point between point of sale activity and, and, you know, this campaign in the coming weeks. What we don't, what, what we don't know is whether this is actually a commercially successful ad. Mark Ritson might have said that on his LinkedIn, but I guess in his mini MBA, they don't talk much about the fact that Wall street doesn't determine what actually happens at the point of sale. And we're already seeing those stock prices in the last three days begin to dip consecutively day over day over day. We've seen red lines, red lines, red lines. All of that doesn't even really matter. We need to see what happens in the next two or three months at the point of sale, and that is going to determine whether this was the right move for American Eagle Outfitters. My bet is going to be no. Target is a benchmark that showed us that moving away from anything inclusive is going to create a firestorm where not just even those people who don't feel represented, aren't engaged, but also the majority of Americans who, who do want to have a unified society. So I don't even think they're just gonna lose white consumers. I think they're gonna lose consumers with empathy. And that's Gen Z. Yeah.

C (11:29)

Khadira, what do you think from a culture and what do you think the employees there at AE are thinking and how are they feeling about being in the middle of this firestorm?

D (11:41)

Yeah, I mean, I think. So here's the thing. If we back up a little bit, and I'm glad we're talking about employees because I think we often forget that they are a key stakeholder. Right. This is an opportunity for, I think, companies to really expand the conversation around how we talk about corporate social responsibility and who we have an obligation to. You know, most companies align their CSR strategies with their values and they're thinking about those key stakeholders. So as you said, their employees, the customers, of course, their shareholders, of course. Right. The investors and things like that. But it's an opportunity for them to look at their values and, and make sure that it aligns with how they're showing up in society right now. So many companies, especially over the last, you know, let's say five years, have really been talking about this commitment to being ethical and inclusive and, you know, having these community oriented practices. If that's the case, then they have to make sure that how they're showing up aligns as well. Right. And so they absolutely have to be thinking about, you know, how is this going to resonate with our employees? Do our employees still want to work for a company that is putting out slogans like this? You know, because it's not just about their brand externally, it's also about their brand internally as well. And so when we talk about, you know, this conversation of, you know, well, maybe they didn't know, maybe they didn't know that this was going to land this way with their employees. Maybe they didn't know that this was going to land this way with the customer. That's not cutting it anymore. Right. There's too many opportunities, there's too many frameworks out there. There's too many checks and balances to be put into place where they could have gone on a listening tour with their employees, with customers, done focus groups to really understand how would something like this message really land? Because as we know, again, slogans, again, ads, all these things build your trust, build your reputation internally, externally, and it absolutely is going to impact your revenue. So, yes, I imagine there is a significant impact with their employees as well.

A (13:40)

Yeah.

B (13:41)

And let's. And let's, like, let's also shine a light on what they told us. This is the part that it's kind of like, wow, if there are PR people in the room, I'm really confused. And we know that they were. I'm not saying anything that's not on the public record, but the PR firm Shadow was in the room when this was being brainstormed. And I know that because a number of American Eagle outfitters executives, including the cmo, went on a sort of very premature victory lap the end of last week and into the weekend on how excited they were about this provocative and cheeky campaign that's really going to turn heads by referring to denim ads of the past. They use all this language. They're winking at each other. We really had fun with this one. They're pretty much telling us that they meant for us to go where we went. Right. Because if it was just about a sexy girl, I'm not sure where the provocation is. Take away any of the words used around the ad offspring, parents, you know, you know, what was. What was the sign off of the ad? My jeans are blue as they pan up to her eyes. These are all intentional decisions by people who are very smart and at the top of the game with their industry. So if their argument is, oh, we didn't think anyone would think anything provocative or maybe distasteful about this, then either they're lying through their teeth or they should immediately be replaced by the board with people who are a little bit more culturally literate.

A (15:14)

Yeah, well, it's, it's troubling either way. If there's intentionality behind it and they ran with it and they got the desired result and they got it from, you know, the motivations that this is going to explode for the reasons that it did.

B (15:28)

That's.

A (15:29)

There's trouble. That's, that's, that's, that's challenging.

D (15:32)

Yeah.

B (15:32)

I mean, the arguments we're going to hear continue to come out are, oh, well, it's shock marketing. It works for Duolingo. You know, we're just trying to sort of be a little cheeky and be a little shocking. But when you, when you take that mindset and then you, you sort of forget the historical record, especially with everything going on globally right now when it comes to the. I'm going to say it out loud, loudly and plainly like I did on the CMOS post. The reverberations of World War II were not even a generation ago the reverberations of an actual attempt at creating genetic purity using eugenics. I'm not saying that aeo, that company and their executives and their board were trying to start that movement happening. That's kind of how they're mocking the critique. Of course we're not trying to eradicate. No, but if you're nodding to it, it's a problem. Why would we want to nod to something like genetic Pur when millions of people lost their lives within, you know, a generation or two due to those ideas actually being implemented? It's not fun.

C (16:44)

Yeah, I mean, I guess the question, I mean, we also want to talk about is when we think about how viral this has gone and how everybody is responding to it. Everyone from who don't even have anything to do with ae, but they're responding to it, are jumping on the bandwagon. Is viral like, like this kind of guerrilla warfare in marketing, is it worth it or is that brand responsible for this action and their words and where do we, you know, where do you go from here? So like Aaron, from like a brand and marketing perspective, they could say, oh, to your point, Lola, they're taking a victory lap because they're get. Their name has all of a sudden become the most relevant thing. Right. Supposedly. But like, is it worth it?

B (17:32)

So, yeah, I mean, I think it's. And I, I promised myself I would never talk about Astronomer because it's just. But the reason why I'm going to bring it up now is it's a very good example of how not all attention is good attention. Right? So when people are saying, oh, this ad was successful, everybody's talking about them. Well, everybody's talking about what's, what's his name? Is it Einstein? Pretty sure. Or. Or Jeffrey. What's his name?

A (17:59)

Epstein.

C (17:59)

Epstein.

D (18:00)

Sorry.

B (18:00)

Yeah, I want to wipe him from the record of my mind as well. Everyone's talking about Epstein's out there selling jeans somewhere, right? No, he's not. He's a topic of discussion for all of the wrong reasons. I had someone share the Google trend search results of American Eagle letter saying, look, see how well this worked? Well, but does that translate to their business goals? And. No, it doesn't. So not all attention is good attention. Some attention is terrible attention. And we will not know how this is going to affect the business until we hear some official results of what this does to, you know, their, their goals and their business results at the point of sale. And like you said, Kadir, I think what this does to the attrition of their employees.

D (18:46)

Yep, absolutely. Well, Look, I mean, 30, 50 years ago, you know, we weren't using the term cancel culture, for example, right. And all news was good news. Right. Or there was kind of that idea, you know, all attention is good attention. But to your point, that's not the case anymore. We really have to acknowledge that cancel culture is a thing. Matter of fact, it's a tool. Right. And it's not going away anytime soon. And from a company standpoint, this really puts corporate reputation on the line more than ever. And so while I think, you know, we can look at this and say, you know, is the consumer, is the customer, is the public overreacting, I think this, this is really an opportunity for us to acknowledge and for more companies to lean in and say, this is really about accountability. You know, we talk about, for example, Melissa, in your opening, you talked about Gen Z and like, how they demand. Right. Again, you know, generations past might not have been that, you know, focused on accountability. It might have been more forgiving, but that's not the case anymore. And so I think companies that prepare, you know, to have checks and balances in place, they have those diverse voices at the table proactively not to do damage control, because that gets exhausting. That are prepared to listen and act with integrity, they can come back from that. Right? And, you know, we can look for examples, right? You know, Lola, we can look for examples of where that's happened. But I think where companies will mess up is when they think that, okay, we can outsmart the public, we can Outsmart the customer. We'll go ahead, we'll make a statement, we'll say what we think people want to hear, and then we're going to continue on to do what we want to do and give lip service. I think that's when it's going to be tougher to come back from something like this.

C (20:30)

Well, and, you know, the deib and inclusivity is not just a trend. It's a proven revenue strategy. So from an operational perspective and business perspective, it's a growth lever. Brands that center on inclusion as strategy outperform their competitors, and that's across loyalty, engagement, spend. You know, we've talked about Fenty Beauty, you know, Rihanna's makeup with the 40 plus foundation shades. It's a $600 million brand now capturing, you know, a very underserved, diverse marketplace setting new industry standards. And so then you've got all these people kind of trying to jump on the bandwagon. You know, Patagonia is another example that's long embedded their core culture values like environmental justice and fair labor laws into their identity. And that's not just about goodwill. That's about brand equity.

B (21:29)

Right?

C (21:29)

So that's about the brand. And their customer loyalty scores are 20 points higher than other outdoor apparel competitors. So there's a, there's, there's, you know, there's a thought when you think about the strategy. And these companies are not in it because they're nonprofits and they're trying to do good. Let's just get real, right? They're in it for profits. And with American Eagle losing profits from, you know, when you're, when you're going, you're riding the rocket ship, right? And then all of a sudden you, you get hit to your point. Kadira, you know, cancel culture is real. Look at what, what happened to Target. Look at what's happened to Tesla. Look at, you know, these are brands that are suffering not due to not having the same goods that they've always had.

B (22:18)

Right.

C (22:19)

They're still selling the same stuff, Right. But it's because of their stance on, you know, eliminating some of these inclusive policies, you know, and them kind of bowing to the pressures of the current, you know, administration. And so I think that it's, this is a very interesting place for American Eagle, and they need to think about, like, the long term, you know, repercussions of what has just happened, because they are in the news. But, like, we haven't heard. Lola, to your point, we haven't heard a really good response from them.

B (22:59)

Right.

C (23:00)

It hasn't been a response that has.

B (23:02)

You know, really want people to take away from our conversation today. If anything, brand leaders listening to this, you don't need to. And certainly the PR team who helped you come up with this, please go to a couple different people than them. If I had to make a plug for a firm that is at a full service level, I would recommend right now. It's worthy. Started by my friend Miles Worthington, who's the agency of record for Tubi when it comes to PR and communications and I'm a partner with them. We do talks together at Cannes every year. And what they would, I would predict, help this brand understand is that cancellation happens when you don't communicate.

C (23:42)

Yep.

B (23:43)

And I talk about this in my book. What we're calling being canceled online is really also easily reframed as a call for conversation. We used to pay for focus groups, now we have them for free. So what would it look like for American Eagle Outfitters to start engaging in not all, but some of the more high profile comments on their brand posts and say we hear you, we're listening. Thank you. There's nothing more important to us than our fans feeling respected. And we're going to be going into the trenches over the next couple of days and weeks and figure out how we can make sure you all do feel respected. There was no apology there. I think legal would be fine with it. There were no promises. But what it is is just acknowledgement of listening. And that's what consumers really care about every day that they refuse to do that and instead do what I call. There's three things leaving us in suspense. We don't love that. Then there's the sort of defensive reaction, passive aggressive, putting a post up of an ethnically ambiguous woman who could harken ideas of Beyonce, then using her actual lyrics, which they did on a post. Levi's, Levi's, Levi's or what was it? Denim, denim, denim. Kind of pulling from her song Levi's without, without attributing her. And that's the defensive response that we're supposed to resonate with. No, they should skip the suspense. Don't leave us there. They should not be defensive and they should quickly, quickly start to go into a place of repentance. That's what really is going to work. And that just could be as simple as starting a conversation, acknowledging that the people who buy their jeans are, are being heard more than the people on X who think this is a great way for us to move towards whatever it is Washington is trying to Move us towards. I won't go into that.

A (25:35)

Yeah, no, I totally agree, Lola. There's, there was a fault here. However you look at it, if they, if they knew the repercussions and they were appealing to the basis levels of our society and let's just say they, that this was fully intentional to the worst degree, that's a problem. If they put it up. We know how these things work. Like, you need a lot of consensus, you need a lot of sign off, you need a lot of oversight. If they had those checks and balances in place and they ignored all the feedback and the signals and people internally, hopefully saying this is, this doesn't appeal to me, this is wrong, I don't like it, and they went for it anyway, that's a problem. And if they thought this was a cheeky, fun thing and they misread the room of the, you know, what, what people would want to see from a brand and they don't know their audience and they don't understand the culture, that's a problem too. So by the time this comes out, there might be an official statement, they might do something very good and productive. They might stumble again. We don't know. But I believe you have to control the narrative around your brand. And the longer this goes on without them taking, regaining control or saying something official, good or bad, we don't know how they stand and which, which of those faults they made.

B (26:47)

You know, Sunny Bunnell of Motto and I were quoted in an adage article about this yesterday and I could quote something that I said, but I was really compelled by what she said, which was that paraphrasing audiences now own the narrative. Brands don't. So your, your, your responsibility as a brand steward is primarily listening to far more than talking. It's primarily not reacting, but sort of regarding what you're hearing from the people who are in your target audience. And if you're not doing that, you're not going to last in that C suite role very long. We look at someone like Corey, like, if we're looking at an example of who does this best, right, the CMO of Elf Beauty. They also have those growth, you know, year over year, month over month, like tremendous amounts of growth. And it's because they stay true to their mission of caring about every eye, lip and faith and face. They don't even use she when they talk about that. It is every eye, lip and face. And so if American Eagle wants every, you know, bum body and person of Gen Z and Gen A age in their genes, they've got to start stopping, start adopting a more inclusive approach that they already know how to do. Hello, Ari. Yeah, so.

A (28:07)

So if they admit, let's say in the next few days, they admit mistake to some degree. They said, we're listening. We. We. We did do something that we thought was in this, you know, we. We thought we were doing something, and it turned out it was misinterpreted. It's not what the, the pushback of the. The Internet detractors are saying, everyone calm down. They're not doing that. They're saying, yes, we did something wrong. Are there repercussions? Do, do or, you know, do people lose their jobs over this? Do they. What's, you know, what, what happens?

B (28:36)

Well, and I'd love to hear what everyone else has to say. I'm talking a lot. I don't think there have to be. If it's done in the right way. And key, Aaron, I think, is to avoid. And this is apology. We learn how to apologize in kindergarten. Right. When you're apologizing to someone, you don't start with what you meant to do. I didn't mean to step on your toe. No, it's. I'm so sorry that I accidentally hurt you. Yeah. I really want to do anything I can to make you feel better.

A (29:02)

Yeah.

C (29:04)

I also think besides taking accountability, which I think is what is lacking here, we've talked about that. And Lola, I love when you say keeping us in suspense, right. Like, are they going to say anything? Are they not going to say anything? Right. You know, I feel like that's a huge issue right now, but I also think it has to go back to the beginning. So when we talk about the creative process, and I know Lola and Erin, you can talk more to this than I can, I'm more on the operations side. But, like, you know, we all need to have diversity in our decision making, Right. Diverse perspectives, diverse expertise so that you eliminate any blind spots. So I really feel like embedding those diverse voices early, earlier on. And, you know, Lola, you mentioned, like, with the PR firms and risk consultants and things like that, that can help you earlier on in the process to empower the team to kind of know what's coming up. And yes, you want to take some risks. Let's get real. Like, there are some really fun campaigns out there that everybody has jumped onto, but really, like, what could go wrong auditing a big marketing campaign? Like, this should have happened.

B (30:20)

Right?

C (30:20)

Like, you know, you know, you sit down and I know that, you know, in operations, when we're Getting ready to launch a new product.

B (30:28)

Right.

C (30:28)

We've been spending months and months and months building it, probably a year building it with our product teams. You do before a launch date, you test it, you figure it out and you're like, okay, what are all the things that can go wrong? And then you have a war room of how you're going to address it. So, like, for them to have this gone on for two weeks and not address it with something else, it feels. I mean, I'm feeling as a consumer and a client and in the audience here, you know, you're just eating your popcorn, just waiting for something to drop.

B (31:03)

Right.

C (31:03)

So I do feel like they need to really focus at the front end just as much as at the back end on their response.

B (31:13)

And I think too, in operations has a lot to instruct. Like you talked about building with. You're building with product experts. They should have building with. Been building with community. Kadira. Sorry.

D (31:26)

Oh, yeah, no, look, exactly that. Right. Like, there's a DEI framework. I can't recall the name of it for the life of me right now, but it basically talks about like nothing, you know, for us, without us. And so that. That really should have been or should be. Most companies approach when they're thinking about, you know, inclusive practices and all those things. And we can talk about, you know, policies and training and all those things. Absolutely. Which can help. But I think, yes, it's earlier, it's in the building phase. I also think when we talk about having diverse voices at the table, it's important that we think about where that ranks in the decision making, because we have to make sure that, yeah, we can talk about having diverse voices at the table, but if we want have it empowered those folks to actually have a voice, make change, hold others accountable and. Or they are not in positions of power to even do anything about the suggestions, the feedback, et cetera, then we're kind of just, again, we're back to kind of that, giving lip service, being performative, all the things. So I think it's this multi layered approach that has to happen because again, you know, it's one thing to kind of invite people in to the table. We talk about that, being in the room, being in the table and all those things, but we also need to make sure that folks are in positions of power to make change. And furthermore, even those people who might be in positions of power, that they're not going to be penalized for speaking up or trying to kind of, you know, put into practice some of the things that may not have been so popular that were raised at the table.

B (32:58)

Oh, my goodness. You are literally, literally. This is the thing that I always say. This is the thing everyone needs to remember. This is the thing everyone needs to remember. We are not saying pepper your executive team with people of all different colors and backgrounds and then have the same, you know, CMO at the top who may not have understand, understood the importance of giving those people agency and control and responsibility. The person who could have said no to this needed to be someone with both, or at least either a combination of the lived experience to understand what could have gone wrong and, and the professional experience. And by the way, that person can be of any ethnic background. Right? That professional experience can come from someone who sought out the importance of having it right. So we're not saying. And also, if somebody is, you know, a person of color who has been beaten down and silenced throughout the course of their career, it's very easy for that person to be safer as a figurehead and nod along and not actually say what they think when they're the only in the room. And it's not on that person to be the savior of the day. We put too, way too much pressure on those individuals who are the only in the room to solve all of the problems. A brief example of this. I won't name the organization, but I'll just say they were involved in that book. Careless people that we all. If you haven't pored through it, you have to read it. I hope everybody you know what I'm referring to the book about what went on at. Let's just call it better. I won't call it the company that it's actually called. And this. The writer talked a lot about that and how when she started to speak out, that was what led to the downfall of her career. So I actually critiqued a women's history campaign that came out of the philanthropic arm of that. Of that community. This was maybe two or three years ago, all documented on LinkedIn. And you know what the response was? Oh, well, the copywriter who we had do that newsletter was actually a black woman who had about a billion bosses on top of her, but they were so quick to throw her under the bus, she should have caught it. So, yes, there are a lot of structural and workforce issues that me as a marketing expert won't get into, but there are so many people who can help these organizations work through that, and they really need to take this seriously because it wasn't a blip. It was a symptom of an illness that will continue to affect them if they don't address it.

D (35:28)

Absolutely. And so I think, you know, that that's a really good point of. It's not that we can't fix it. We know how to fix it. The question is, do we want to fix it? Do we truly want to fix it? Because, again, we can have all the different policies, Lola, to your point, we can have, you know, a person of color or a female CMO or whatever needs to happen, but do we truly want the solution, or are we, again, just going to continue to be performative?

C (35:51)

And the reason, Kadira, what you said about who is the true decision maker. Right, because having a diverse table. Table is one thing, but if the decision is only made by a very small subset and they, you know, and to Lola's point, they can point the finger later on and say, well, y' all were there, but we didn't all get an equal vote, that definitely has, you know, or, you know, our feedback isn't being received, you know, and processed and digested the way we would hope it is. I mean, I think that's something that really impacts businesses today.

B (36:31)

Right.

C (36:31)

Like, you know, I've seen it. I've.

B (36:33)

I've.

C (36:34)

It's just a very. I've been a part of it. I've seen it and I've felt it. And it's just an interesting thing of how the tide has been turning and how we really need to be very, very intentional about how we move forward. And I think, you know, you know, I'm sure, Erin, you're probably getting ready to ask us, how are we going to fix a American Eagle? But it's. This is a complex issue, and it's not just American Eagle. I mean, this. They're bringing it to the forefront. But it seems like we're having these missteps so many more times. I mean, it's just it. And it's dumbfounding to me that we have people that aren't taking accountability or can't see, like, where, you know, where they have a role in this. You know, I mean, I know. Lola, you brought up Astronomer, and we weren't going to talk about Coldplay, but, like, the fact that the CEO is going to sue Coldplay, really, Like, how is that even. Like, where is his mindset? Like, like, that's his mindset that I can sue the ban for blowing my life up. And I'm like, But they had nothing to do with it. It was your life that you blew up yourself. So I don't know I mean, I think that's the thing that you have to look at American Eagle and say, hey, you all made some choices and now you have to live with them. So how are we going? How are you going to move forward? And it's really, really interesting to me that, you know, like, I just, you know, I said early on, but, like, it's just being viral enough. Like, yeah, maybe it is. Maybe in their mind that is right.

A (38:10)

More I think about it.

B (38:11)

Of course it is. If I was a strong, I was a shareholder and astronomer, I'd be like, hold on, hold on, hold on, hold on, hold up, hold up. Sass high ticket B2B product. You thought that blowing who, who knows how many multiples of your quarterly or even annual marketing budget on getting Gwyneth Paltrow to make you feel cool about yourselves was a smart business decision. Like, run me my shares back, please, because clearly I can't trust you all to make sound decisions. The new cycle was ending. And I bring that up because so much of what you know and I love professor for Professor Scott Galloway in a lot of ways. He was my professor in business school. We disagree on some things, but one of the things that I think he always gets right is the agency problem between ego and really what's right economically for a business. So much of what we're talking about today has to do with brand ego, and that is driven by what I call corporate fragility. Yes. It is a play on the other type of fragility that we've been talking about a lot in the last couple of years. But when you're coming from that place of, oh, my goodness, I would rather literally deactivate my LinkedIn and turn off my comments than hear anything critical about myself. And even if it's affecting the economics of my business, why, why are you the steward of that business?

C (39:31)

Yeah, yeah.

B (39:32)

When did your ego come into it? And when did your corporation become so full of people who are so entrenched in ego that they've created a massive one that's bigger than the sum of the parts of all the egos inside that lead it? Right, Right. I think you should be able to. A public event with other people on your team and do something that could harm families.

C (39:56)

Right.

A (39:56)

Yeah, Just keep. Think. I keep thinking about. I don't think there, there is a tasteful way to do this campaign that they did. If they did, let's say it's. It was full representation and, and they did, you know, the Benetton version. Right. And then it's Showing look, the our group of people models have genetic superiority over you, our target consumer. That doesn't land. Right.

B (40:19)

Well, there was the dove real beauty approach. Right?

A (40:23)

Yeah, but that was supposed to show.

B (40:25)

Every jeans look great in our jeans.

A (40:27)

That's supposed to show everyday people, right?

B (40:29)

Yeah, yeah. And isn't that who buys American Eagle Outfitters?

A (40:33)

Sure, but I'm saying if they took them, we want to show models in our jeans they look good to our consumers. And it was, you know, our jeans collectively are better than your jeans. That doesn't work.

B (40:46)

And they should have learned from the disruptors in this space who are doing it exactly the wrong way. You can say what you want about the Kardashians, but Good American is a perfect example of a brand where if you go on their website, they show their jeans in every size range. They've invested in technology which I'm sure is more expensive than just showing one model and one pair of jeans or even the two poles, the smallest size and the largest size. They have models in numerous sizes modeling all of the jeans, showing what they look like. It's again about that transparency and acknowledging the reality of who your customer is and making sure that they know this is not just for them or them, but it's for all of you. And we are showing you that.

A (41:33)

Right. So does that work if they have everyday people looking the way people do and they say our genes are great?

B (41:39)

Genesis, I mean, listen, I'm no copywriter. I'm not taking those jobs away from the folks who are really good at it. But I think that if in this 45 minute podcast we can come up with something marginally better than what they did, investing in months and you know, tens of thousands, probably hundreds of thousands, and coming up with the right creative, the right team could have come up with something masterful along these lines. And to be frank, I think it could actually have been a sort of counterpoint to the call it white was whitewashification of patriotism that we're starting to see. Because I personally reject that. I'm a first generation immigrant. My parents came here from Nigeria, had me here. I've got my blue passport. I was born at Howard Hospital in D.C. and I consider myself way more American than anybody who thinks that the American ideal is just for people who look a certain way.

A (42:35)

Yeah, well, we are getting closer to our end dinging time and we. It's time to fix it. So if. Let's just give ourselves the, the control over American Eagle. So we, we messed up for a second. What are we going to do about it. Let's, let's talk that out and then we'll, we'll see if we fix the situation. So this is, it's our mistake. What are we going to do?

B (42:59)

Who wants to start?

C (42:59)

I would start. I mean, I think we've already mentioned this. I think that there's a need to be, there's like three things. They really need to be more strategic in their actual creative process and other processes, operations from everything all across the board to be looking at the diversity table and really understanding how that impacts their growth. Because like I said, inclusivity is not just about that, it's about revenue. I also think that they need to respond, I think take accountability and have some sort of response to this. I'd like it to be that they don't have to respond to a negative or viral situation and that they're going to think about it more in the early stages and be more strategic and be more intentional. But right now I think that to me it's hurting their brand by not responding in a way that is really addressing. I mean they're the ones who put it out there. They need to address it.

D (44:02)

I would agree with that. I think, you know, the accountability again is a big piece. Again, we live in this society where you know, folks are going to hold you accountable, the customer, the consumer is going to hold you accountable. And look, maybe there are some groups, there are some groups we know that in fact that are out there that like, hey, what's the big deal about this? Right? Don't lean into that. Right. You need to still acknowledge that there was an impact here around what you did. Again, it could be the difference between the company having, you know, going under and having a really tough next few quarters from a revenue and shares perspective or being able to bounce back from this. So I think I would, I would agree with that. With Melissa around the, the accountability and response piece, again, I think they need to really ask themselves do they want to fix this and how are they going to empower folks to actually make decisions definitely next time. So not just kind of get into a room and you know, say that we had diverse voices and diverse thoughts, but that we really did and we really did empower folks and we didn't, you know, I know this is a dirty word, but we know it happens retaliate against folks when they did speak up because we know that that, that happened. And then finally, you know, I mentioned this at the top, but again, I think AE as well as other companies need to make sure when they are talking about corporate social responsibility, that it's not just kind of what we think is cool and sexy, but that it really does align with their values and that they. And then in that case, that they've got frameworks, that they've got policies, that they've got strategies in place to make sure that the say lines up with the do.

B (45:34)

I couldn't put it any more succinctly if I actually read, which I'm about to do, one or two sentences from AEO's actual value statement. Please, you'll allow me?

A (45:46)

Absolutely.

B (45:46)

Our values are at the center of every decision, every product, in every interaction. They represent the foundation of our real culture. We all have a vital role to play in creating an environment where everyone feels respected and empowered while we continue to grow as a community that promotes individuality and difference. AEO celebrates the diversity of one through the conclusion of many. I'll repeat that line. AEO celebrates the diversity of one for the inclusion of many. Come in. Be you. So I think they should take their own advice. The number one thing I would do is start to pull and interact with the people at the front lines of the organization, the folks who work in the retail stores, and then also, I think very crucially, the social media team who are trying to handle this firestorm as quickly and as smartly as they can. What have they learned about what should happen next? Talk to them. Maybe they have better insights than the PR team that you have been working with. I would. I would definitely evaluate my set of vendors and let them know what. What. I'm not even. I'd never advocate for anybody to be fired. I think everybody can be evolved and changed, but what do they need to do to better be able to serve AEO's leadership at a time like this? And then thirdly, you know, we've touched on this, but they need to avoid corporate fragility and what I call the fauxpology. And a faux apology is where you acknowledge it, but you meant to. We didn't intend to. But this isn't me. This is Robert Livingston, a Harvard social psychologist. I quote in my book. He talks about recognition, remorse and repair. And they need to do those three things in order to move forward in a way that's going to be positive for all of their stakeholders, shareholders primarily included. They are not pandering to the Wall street day traders. I think they're pandering to the people who want to hold their stock over a long term. And those are the people they should be thinking about when they're looking to course. Correct.

A (47:59)

Thank you, Lola. So if I'm getting it all, if they read their value statement and actually understand what they put out into the world, sit down with their employees and be active listeners and make decisions and make changes accordingly, admit harm was done for real and respond with accountability, if they make sure that there's representation with positions of authority and these types of decision making and before a campaign never sees the light of day, if they diffuse the noise that just quiet down, that's not a valid response. You know, if they get ahead of that and if they look at who their vendors and their supply chain and who's whispering in their ears and who's telling them to do these types of moves and they, you know, either get, make sure they get on board or get out of the way, is this a good playbook? Is this a good roadmap? Do we give them the ability to change? And do you think they will? I'll start with Lola. I'll go to you last. What do you say? Did we fix the situation?

D (48:56)

I absolutely think it's fixable for sure.

A (48:58)

What about you, Melissa?

C (49:00)

Ditto.

B (49:01)

Agree.

A (49:02)

All right, Lola.

B (49:03)

I love a yes and. And it's a yes and with one caveat. The thing we haven't touched on is the rise of this sort of, I don't know what you want to call it, romantic romantization of the past with Gen Z Agency that's never experienced it, what with the trans wives, the cowboy culture, you know, that sort of millennial trend that if you're not thinking about it critically, can say, well, we really are trying to appeal to them. So if they do everything we're talking about, and then also from a number standpoint, understand that while that movement might be loud, it doesn't have the numbers, then I think they'll be safe enough to say, hey, we can engage everyone. Our genes are for everyone. Just like Bud Light said, our beer is for everyone. The next right move would have been to say also people who are transgender. And I hope that AE makes the right move and says our genes are for everyone, you know, in a certain demographic, and we want them all to feel comfortable, not that we're going to alienate others in order to be for everyone. That's not a sensible argument. So it's a yes, and they have a long road ahead. But with the right advice, starting with this podcast, I hope they all listen to it. You know, there's that there's never any brand that can't come back from a faux pas. My alma mater, PepsiCo included.

A (50:26)

Okay, good. Well, I'm glad we gave them some, some building blocks and that's taking us to the end of this one. I don't think it's the end of the story, though. No matter where you land on this, we certainly didn't fix all the societal undercurrents and tensions that led to this moment. But I think we did our best. Lola, you brought, you know, a ton of great advice, and I think we have to, you know, collectively, we have to talk about these things head, head on or they just simmer. This is not going to be the last time there's a societal trigger or a gut reaction to a brand that's just out there looking for attention and making the wrong moves. But no matter your perspective on this, if. If everyone brushes it off as sensitivity instead of paying attention and having these kinds of conversations, then it's a moment lost. So I hope we did a little bit of good here. We did give American Eagle a chance to learn, do better next time and be better. Whether they will. Whether other brands will learn anything of value from this time will tell. But, Lola, I do hope they listen, if not to us, then to somebody. I want to thank again, our amazing guest, Lola Bakari for coming on with us and sharing your wisdom. Lola, please tell the good people out there how they can hear more from you.

B (51:29)

My goodness. Well, you can follow me on LinkedIn. That's probably where most of my stream of consciousness is shared. And if you're not able to find me for whatever reason, the hashtag restrictions, responsible marketing is a good way to look for me on LinkedIn as well. If you're interested in purchasing the book, that would probably be the best thing that you can do to help me continue to spread this mission. And please do subscribe to Aaron's podcast because I think this is a very important, important platform to talk about real issues and one of the ones I've enjoyed being on, you know, since I've begun promoting the book, quite frankly, the most.

A (52:04)

Thank you. And remind everybody the name of the book.

B (52:07)

Oh, it's called Responsible Marketing. How to Create an Authentic and Inclusive Marketing Strategy. You can go directly to Amazon or wherever your favorite books are sold. Book people, if you're one of the people, want to buy from independence. And of course, there are tons of link to it all over my profile on LinkedIn.

A (52:24)

Fantastic. Thank you, Lola. Thank you, Kadir, Melissa, all you fixaholics, you never miss an episode. We're going to keep giving you more. Season 2. If you want to catch up on anything. All episodes are at wefixeditpod.com or wherever you get your podcasts. Thanks for listening. Keep being your best self and we will see you next time.

D (52:43)

Bye everybody.

B (52:44)

Thank you so much.

A (52:46)

We hope you enjoyed this episode of We Fixed It. You're welcome. We go into every episode somewhat cold and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. All trademarks, IP and brand elements remain property of their respective owners.