May 30, 2012

Have Apple And Walmart Proven That Brands Can Be Invincible?

By Aaron Kwittken, CEO and Partner, Kwittken + Co.

There is a scene in Terminator II when Arnold Schwarzenegger's character walks into a seedy biker bar, rudely demands that one of the patrons give up his clothes, boots and motorcycle and then completely dismisses the inevitable response. The Terminator doesn't even flinch when a lit cigar is extinguished on his chest, a pool cue broken over his head or a shank thrust into his abdomen. Instead, he blithely, tosses his victims around the bar like rag dolls and rides away atop someone else's Harley Davidson.

Watching Apple survive the corporate equivalent of a barroom beating following The New York Times' exposé of inhumane labor conditions at several of its foreign factories, and seeing Walmart weather coverage of unethical business practices South of the Border, I can't help but to compare these corporate behemoths to the Terminator and the corporate crises they are facing to the aforementioned cigar or the pool cue.

While there was a time when these allegations could cripple a brand regardless of its reputation or size, major corporations seem increasingly immune to damning news, quickly bouncing back from corporate debacles with shockingly little long-term damage to their brand and the bottom line. This alarming immunity grows, despite increased levels of transparency, consumer mistrust and social media vehicles at the ready to spawn consumer activism and outrage.

Sure, there's usually an obligatory investor backlash, but it's generally short-lived. While the air of invincibility and arrogance have caused an epidemic of a "rules don't apply to us" attitude, perhaps the overexposure to corporate crisis and new levels of transparency have resulted in a shockingly high-level of public leniency, apathy or sheer ignorance.

It seems as though Walmart's average customer is less concerned with the allegations of the retailer's shady international corporate businesses practices than the steep discounts on toothpaste, DVDs, French fries and the like, and that Apple's target user is too head-over-heels in love with Apple products to ever boycott the brand.

Considering that Apple's stock price resiliently continued its march to a $1,000 mark shortly after accusations were made in January, it will be no surprise when Walmart's 5% dip following last week's claim that bribes were covered up by top executives will bottom out and share price quickly bounce back to normal levels. And don't expect The New York Times' recent exposure of Apple's shady tax practices to create any significant speed bumps.

The sad truth is that the general public appears to be numb to corporate wrongdoings and the companies themselves, in turn, may feel a diminished responsibility to change their practices and at the very least communicate with greater amounts of remorse when alleged wrongdoings are exposed. Maybe the sorcery practiced by brand warlocks, wizards and witches like Walmart, Apple and Carnival have cast irreversible spells that turn consumers into sell outs, when sometimes they need to "sell words."

This article originally appeared on Forbes.com; reprinted with permission.