Plus: Steak ‘n Shake investor capitalizes on Cracker Barrel’s logo drama; Atlanta Journal-Constitution drops print.
There’s a policy not many consumers know about that’s ending today.
It’s called “de minimis” and before now, this meant that anything imported into the U.S. under $800 was exempt from duties, fees and taxes. Think of Amazon, Etsy or Shein purchases. The consumer is getting these things fast and cheap, often with free shipping, sourced from places like India, Canada, Mexico or China (this policy ended for Chinese products in May).
But businesses will now be responsible for helping consumers understand changes in this policy, why prices may be higher, or why they will no longer be shipping products to the U.S.
To put it in context, last year, the U.S. saw “1.4 billion de minimis shipments, more than double the 637 million in 2020, according to U.S. Customs and Border Protection data,” CNBC reports.
“All shipments — including beauty products from Korea, leather shoes from Italy, kitchen knives from Japan — will be subject to additional fees and taxes, such as tariffs that the Trump administration has levied on most U.S. trading partners,” the outlet said.
This could increase prices for the consumer between 20% and 60%, CNBC reports.
Some small business owners are now grappling with how to respond, with Canadian bridal accessories owner Blair Nadeau saying, “This is devastating on so many levels and millions of small businesses worldwide are now having their careers, passions and livelihoods threatened,” she said in an Instagram post. “Just this past hour I have had to turn away two U.S. customers and it broke my heart.”
Why it matters: No one likes paying more for products, especially in a rocky economy. This is a move consumers are going to frown about for some time and may put hardships on small businesses.
Companies will now be tasked with explaining how and why there’s a price increase, product shortage, or why they’ve stopped shipping to the U.S., all while grappling with meeting business goals.
This is a time when companies must get inventive, reaffirm loyalty among customers and focus efforts on what can be controlled. For some companies, could you enlist more influencers to share testimonials about your product? Could you emphasize quality versus cost?
Another avenue may be to eat the costs, as some companies have pledged to do in order to foster consumer loyalty and trust. But this model won’t work for every organization, especially for smaller organizations that depend on their digital storefronts.
It’s imperative that affected companies help explain the policy change by using plain language and being extremely transparent. Consumers can be forgiving if they understand the why.
Editor’s Top Reads:
- When Cracker Barrel’s logo-gate was in full swing, Steak ‘n Shake CEO Sardar Biglari, who also has an investment firm and owns stock in the country store, seized the moment to insert himself into the debate. Taking to social media, he called for the firing of Cracker Barrel’s CEO and criticized the spending on the chain’s renovations, the Wall Street Journal reports. When Cracker Barrel rolled back its decision on the new logo, Biglari, who has been consistently outspoken on the brand’s moves and publicly critical for years, called for the restaurant to use money from its rebrand to instead keep prices down for customers. Steak ‘n Shake’s Operating Chief Dan Edwards this week hailed Biglari for being “authentic.” Whether or not the intentions are pure, Biglari is an investor, and he’s making a move when Cracker Barrel is vulnerable and people are paying attention. When companies face crises, especially public ones, they open the door to potential hostile takeovers. Their next moves could determine whether the whole operation slips through their fingers or they resiliently bounce back from the fallout.
- The Atlanta Journal-Constitution announced it will quit printing papers and go digital only this week after being in print since 1868. The decision was made after its publisher and president, Andrew Morse, said the paper had developed a robust digital presence and “it was time.” While print news has been in decline for two decades now, Atlanta is a major metropolis with 6.3 million people, The New York Times reports. “Most major American cities continue to have some version of a print newspaper, in part because the print editions often remain profitable, at least for the moment, unlike the online operations of many outlets,” the outlet said. The move is another indication that media sources are diverging. People are consuming information in new ways and even large metros aren’t immune. Businesses have to get more creative and inventive in their approach to reaching audiences, even in unexpected regions with longstanding support of traditional media.
- Employers are cracking down on workplace political dissent. Microsoft, Tesla and JP Morgan are just some recent examples of companies who have fired employees over acts of political protest at the workplace. Why? It’s a risk they don’t want to take — spurred from White House-imposed pressure and losing control of the hierarchy of the company, WSJ reports. “The result is a more adversarial employer-employee dynamic in which bosses are far less concerned with accommodating their workers’ political and personal views,” the outlet said. “These days, many business leaders would just as soon trim head count as appease vocal staff. That has fired up some office activists even more.” Companies must walk a fine line between placing value on employees’ personal views and causes important to them with work-related goals, its own CSR policies and bottom lines. This is tricky and could have bigger implications in the long term. It will be interesting to see how other businesses cope with the growing divide and what will, and won’t be, tolerated in the workplace.
Courtney Blackann is a communications reporter. Connect with her on LinkedIn or email her at courtneyb@ragan.com.
The post The Scoop: How will businesses explain de minimis changes? appeared first on PR Daily.
