Navigating an increasingly diverse American marketplace 

Editor’s note: Katya Skogen is director of cultural insights at Collage Group, a Maryland-based market research firm. 

In the second quarter of 2023, Target experienced its first sales decline in six years, with a notable 5.4% and 10.9% drop in in-store and online sales, respectively. This decline has been attributed to the significant backlash the brand faced from right-wing conservative groups driving a volatile anti-LGBTQ+ campaign, which worsened with a second wave of backlash from the LGBTQ+ community.

At Collage Group, we’ve worked to uncover the cultural dynamics that led to this backlash, examining how Target's response alienated its long-standing supporters, the LGBTQ+ community. Through our surveys and analysis, we offer insights into this situation, shedding light on the complex interplay of cultural and political elements in an increasingly diverse American marketplace.

This research is part of an ongoing series for the release of our 2023 “America Now” report. 

The sensitivity of LGBTQ+ issues and Target's role

LGBTQ+ issues have always been particularly sensitive topics for advertisers. Yet, for over a decade, Target has successfully engaged with the community and its issues in marketing, merchandising and philanthropic work during and beyond Pride month, earning the company consistently high ranks as a top brand for this community. The brand visibly supports this consumer group, especially during Pride month. Each June, Target features merchandise centered around Pride, including rainbow-themed t-shirts, greeting cards and products for people of all ages.

Given this history, the question arises: What led to the considerable LGBTQ+ backlash against Target in June 2023?

The changing expectations of key consumer groups

By segmenting our data, we were able to investigate the political forces at play that led to the significant backlash against Target. It was clear that several conservative firebrands instigated dismay at Target's merchandise, often using misinformation to stoke the outrage.

But why now, when Target has previously offered other products tailored to the needs of transgender and nonbinary people?

Conservative consumer groups have historically felt brands should steer clear of politics. In contrast, liberal-leaning consumers have been more outspoken about their demands for brands to take a stand. However, Collage Group has picked up on a notable change in trend, an inflection point. That is, now most American consumers – across the political spectrum – expect brands to address certain issues rather than remaining uninvolved. And as usual, these views are amplified by social media and conservative outlets, turning brand criticism into a vocal and public affair.

Target’s reaction and the LGBTQ+ community’s response

In response to mounting pressures from social media, boycott movements and confrontations in stores, Target made the decision to remove or relocate its Pride merchandise from highly visible front displays to less conspicuous areas within some stores.

However, this dramatic shift was seen by many LGBTQ+ consumers as a default on Target's long-standing relationship with the community, leaving them wondering if the campaign was opportunistic and insincere in the first place. Consequently, Target found itself facing criticism from both sides of the debate.

LGBTQ+ consumer discernment and expectations

LGBTQ+ consumers, particularly among younger generations, strongly endorse brands that champion LGBTQ+ causes in general, with a particular emphasis on transgender and nonbinary issues. However, they are also more likely than the broader consumer base to scrutinize a company's diversity, equity and inclusion practices before making purchasing decisions.

In the case of Target, the primary issue that drew criticism from the LGBTQ+ community wasn’t a lack of commitment to diversity and inclusion. But rather, the contentious point revolved around it yielding to the LGBTQ+ backlash. The LGBTQ+ consumers, particularly the younger demographic, are notably less inclined to back companies that recoil in their support for specific issues in response to consumer boycotts. This is likely due to their belief that such boycotts are often sensationalized and lack genuine impact on the targeted companies.

Embracing LGBTQ+ support: Lessons learned from the Target case study

Despite vocal opposition from certain consumer groups, this research illuminates the fact that a majority of Americans express support for the LGBTQ+ community and embrace Pride month initiatives. Specifically, 88% of non-LGBTQ+ individuals maintain either a positive or neutral perspective on Pride month marketing. Brands should take this as a cue to shape their campaigns based on these insights, rather than being swayed by the actions of a minority. This lesson is underscored by the Target case study.

88% of non-LGBTQ+ individuals maintain either a positive or neutral perspective on Pride month marketing.

At Collage Group, we understand the challenges brands face as they try to navigate an increasingly polarized cultural landscape, where endorsing one group can trigger negative reactions from others.

For additional information on evolving consumer preferences, you can preview the 2023 “America Now” report (registration required for download), available to non-members on December 12, 2023. This report gives further insights into the changing consumer preferences of diverse America.