What do you do if your company is in dire straits and the entire industry you serve is going through a cultural mega shift? One thing you probably do not want to do is  alienate the very consumers who could be the solution to your problem. 

That was the dilemma Payless Shoes found itself in recently, when the well-know, low-cost shoe retailer deployed what turned out to be a very clever promotion strategy that, while fun and playful, probably did more harm than good. 

The Promotion 

Payless recently commandeered a former Armani store in Los Angeles and set up a faux high-end designer store called Palessi (cleverly pronounced "Pay-less-y"). The catch was that all the "high-end" designer footwear was actually shoes from Payless that ordinarily cost from $20 to $40.  

The charade even included its own website and Instagram account.  

According to CNN, the company's agency, DCX Growth Accelerator (DCX), invited about 80 social media influencers to celebrate the grand opening and interviewed them as they perused through the store. They were filmed and interviewed as they ogled over the shoes, and many ended up making purchases at ridiculous prices, ranging from $200 to as much as $600.  

Doug Cameron, DCX chief creative officer, explained to Adweek that Payless "wanted to push the social experiment genre to new extremes, while simultaneously using it to make a cultural statement." And according to Payless CMO Sarah Couch, "The campaign plays off of the enormous discrepancy and aims to remind consumers (Payless is) still a relevant place to shop for affordable fashion." 

The Outcome 

The stunt ended up netting about $3000 in sales, all of which was refunded to the influencers when they were let in on the prank. Payless even allowed them to keep the shoes. More important, Payless and DCX was able to capture a trove of valuable video they say will be used for an extended marketing campaign showing how relevant Payless can be.  

But that is where I believe the good news stops. 

Payless has had it problems, filing for bankruptcy protection in April 2017 and shedding 400 of its 4400 worldwide stores. And like most traditional retailers, it is struggling with how to compete with large online retailers like Amazon and Zappos (owned by Amazon). 

While the stunt may provide an ample amount of "gotcha" footage that will look great on Payless social media channels, I believe it created antipathy and will ultimately backfire in the long term. 

The Potential Fallout 

For starters, online influencers are immensely popular and, well, influential. Love them or hate them, the fact is that they will continue to be a significant force for driving consumer behavior in the coming generations. If you disagree, I suspect you are over the age of 30 and likely do not have children. 

I am not arguing the merits of engaging with online influencers here, only that their rise in prominence and influence is an important factor that companies need to consider in their long term planning. 

By making a large number of influencers look foolish and boasting that the company will continue to use the prank for promotional reasons, it breaches any trust and respect these influencers may have had for the Payless brand -- and that breach will get passed onto their fans. 

Yes, influencers come and go, but staying relevant and creating anything the remotely resembles a loyal customer base depends on winning over the millennial and Z generation. Again, if you disagree, you probably haven't had much interaction with them. 

In the end, I actually love the Payless promotion. I love the fact that Payless calls out societal hypocrisies about putting too much value on material things -- like shoes and wine and free agents. After showing my wife the video, she commented that she loves Payless and totally respects what they did. She is a fan. 

But here's the thing, we do not shop at Payless. We get our shoes and just about everything we need from Amazon and a host of other home delivery services. The fact is, if I didn't have children, I might never leave my house. And I know I am not alone in this sentiment. 

But millennials and the Generation Z behind them are different. They have different tastes and habits, and ultimately seek experiences over material things. Their shopping decisions are very much driven by a respect and trust in companies, as well as what is said and recommended by their peers and influencers they trust. That is the extent of their brand loyalty

So, if you cut off the influencers, you cut off their fans and your future. And while I would love to ride out on my white horse and support and save Payless Shoes, I need to stay home for my next delivery of Stitchfix and Netflix new-releases.  

What do you think? Was this promotional stunt a good or bad move for Payless? Share your thoughts with me in the comments below or on Twitter.

Published on: Nov 30, 2018
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