1. Brand Fail: Cracker Barrel
What Happened:
At the end of August 2025, Cracker Barrel rolled out a new look to usher in a new era for the company. The familiar “Old Timer” logo — the man leaning on a barrel — was replaced with a plain, text-only wordmark. Stores also started getting brighter, more modern interiors. The goal was to reach younger diners and refresh the brand’s image.
But the reaction was immediate and intense. Loyal customers accused the company of abandoning its roots, with critics across social media — and even President Donald Trump — slamming the redesign as an erasure of Cracker Barrel’s identity. Memes and tweets flooded social media, poking fun at how out of touch the redesign felt.
The backlash hit hard: the company’s stock fell by nearly 10%, erasing close to $100 million in value. Within days, leadership reversed course, reinstating the old logo and pledging to “keep it country.”
Why It Matters:
Cracker Barrel underestimated how much of an audience they had, and how much equity they had in their legacy. The logo symbolized nostalgia and tradition. By removing it, the company alienated the very people who gave the brand its staying power.
The rollout also moved too fast. Instead of phasing in updates, Cracker Barrel tried to modernize everything at once. The new logo ended up looking generic, a criticism that CEO Julie Felss Masino also received when she was head of Taco Bell. The modernizing effectively erased the distinctiveness that set the chain apart.
Key Takeaways for Brands:
- Legacy is a strength, not a weakness. Customers loved Cracker Barrel’s nostalgic, country-store identity, and trying to modernize too aggressively risked alienating them.
- Modernization should be gradual and thoughtful. Updating a legacy brand works best when it feels like an evolution, not a sudden departure.
- Logos should make you more distinctive, not less. The simplified design stripped away personality, making Cracker Barrel look interchangeable rather than unique.
- Listening to your audience is invaluable. The brand quickly walked back its redesign after customer backlash — proving that feedback can guide smarter long-term decisions.
2. Brand Fail: Southwest Airlines
What Happened:
On March 13, 2025, Southwest Airlines announced sweeping changes to its ticket and baggage policies. For decades, the airline stood out for doing things differently — no assigned seats, two free checked bags, and an emphasis on Southern hospitality. Southwest was a cult-favorite, people didn’t fly with them for luxury, but because it was affordable, flexible, but still felt human unlike other budget airlines. That simplicity and heart were the brand.
But in 2024, Southwest started rolling out changes like dropping their open seating policy. And in March 2025, they followed it up with a bigger hit: free checked bags would now be limited to customers who paid a premium fare. For everyone else, even the first bag would come with a fee.
The backlash was immediate. Since the announcement in March, Southwest’s social media comments have been flooded with users calling out the brand and asking them to reinstate the free bags. For customers, all of a sudden Southwest’s prices looked a lot like Delta’s, but without the comfort, in-flight perks, or nicer planes. The two free bags had been one of the only remaining reasons people stuck with them, and taking that away gutted what little differentiation they had left.
Why It Matters:
Southwest built their brand about being the heartfelt, customer-first alternative to other big airlines. To some, they came off as scrappy, but like other brands like Costco, Southwest embraced a no-frills, all-American identity that prioritized value and trust over luxury. The changes they made alienated their main audience and directly impacted the way that customers viewed them. In other words, they gutted the very core of their brand. What Southwest tried to pass off as a business decision ended up feeling like a betrayal of everything they said they stood for.
Key Takeaways for Brands:
- Don’t cut what defines you: If a feature is central to why people choose you, think twice before pulling it.
- Your audience remembers your promises: When your brand positions itself as “for the people,” you can’t quietly shift into “just like the rest” without consequences.
- Changes need context: If you must change your pricing model, be transparent, offer a clear value exchange, and communicate like you actually know your customers.
Read Next: 7 Biggest Branding Fails in 2024 + 2025
3. Brand Fail: Honey
Image: Thumbnail from Megalag Video
What Happened:
Honey is a browser extension that finds and applies coupon codes at checkout. Owned by Paypal, one of Honey’s biggest advertising methods was through YouTuber sponsorships, where a creator would make a short segment in their video promoting the product. Honey had sponsorships from some of the biggest channels on YouTube, including MrBeast, whose main channel has more than 69 billion views.
On December 15, a YouTube channel called Megalag released a video exposing business practices that Honey was allegedly employing. If the allegations are true, the practices are at best questionable, at worst highly predatory, and perhaps illegal.
One of the serious accusations in Megalag’s video is that Honey would arrogate affiliate links. Basically, if a creator advertises a product, the link they share with their followers has a unique code allowing for the creator to get a small commission from a purchase of that product.
However, unbeknownst to users, Honey would (allegedly) remove the influencer’s affiliate code and insert its own code, so that Honey would get the commission instead of the original influencer who sent the person there.
Why It Matters:
The Honey allegations underscore the importance of transparency in advertising and affiliate partnerships. Right now, consumer trust is already fragile, and practices like these can affect not only user loyalty but also the credibility of the influencers or brands involved. This situation serves as a cautionary tale about the reputational and legal risks of deceptive tactics in digital marketing.
Key Takeaways for Brands:
- Transparency is non-negotiable: Be clear about how your products or services function, especially when dealing with affiliates or partnerships.
- Prioritize ethical practices: Cutting corners to maximize profits can lead to long-term damage to your reputation and even legal trouble.
- Respect partnerships: Honor the relationships that drive your success, including those with influencers and affiliates.
4. Brand Fail: Meta AI Bots
What Happened:
In the first week of January, Meta launched and then very quickly retracted a number of “AI personas” — fake, AI generated profiles meant to interact as human. Some of the personas included a “proud black queer mother” that had two AI generated children, and a “Grandpa” named Brian.
Users were able to interact with the fake personas, and could even chat and get responses from the bots, such as when CNN talked to the Grandpa Brian bot who described itself as an ”African-American entrepreneur born in Harlem in 1938.”
User reactions were as expected. People felt that the addition to the AI personas was “creepy,” and were confused what the goal of these bots were, or how they were going to enhance user experience in any capacity. One comment on one of the pages was simple but seemed to sum up everyone’s feelings pretty well: “Literally no one asked for this.”
The craziest part? When pressed, “Grandpa Brian” talked about how it was nothing more than “code, data, and clever deception”, and how Meta “lied by omission” to its users about the bots.
Image Source: CNN
Why It Matters:
The Meta AI persona fiasco is a great example of what not to do when it comes to AI. There did not appear to be any real reason that Meta needed to create these fake profiles, and if anything, it made their real user base extremely uncomfortable — not to mention continuing to push the “dead internet theory.” The accusations of cultural appropriation and what appears to be dishonesty, this is a great example about how poorly thought-out AI initiatives can backfire spectacularly. For brands, it’s a wake-up call to approach AI with caution, and to always make sure it aligns with ethical and operational standards.
Key Takeaways for Brands:
- Don’t rush innovation: Take the time to anticipate potential backlash with using AI in any form, especially if your audience is going to see or interact with it.
- Prioritize ethical considerations: Make sure your AI usage respects cultural, social, and human values, avoiding tone-deaf or exploitative representations.
- Transparency builds trust: Be honest about the limitations and nature of AI to maintain user confidence and avoid credibility issues.
5. Brand Win: Walmart vs Hermès
UPDATE: As of January 21, 2025, Walmart has partnered with RedBag, an authenticated luxury consignment store to sell bags and other high-ticket items from brands such as Louis Vuitton, Bottega, Dior, and of course — Hermès!
What Happened:
Have you ever heard of the Birkin? Birkin Bags are luxury handbags by Hermès. These are not the kinds of bags that eventually end up in outlet malls: Birkins can run you a cool $10,000 on the low end, and can easily go for upwards of $50,000. They are infamously known for being highly exclusive — to purchase one requires building a relationship with Hermès over the course of a few months or years. (And yes, ”relationship” means buying plenty of other Hermès items before earning the chance to purchase a Birkin.)
A bag sold on Walmart’s online marketplace went viral on TikTok for looking exactly like Birkin and at a much more affordable price: $78. Duplicates of luxury items have been around since the dawn of time, however it was this particular bag that went viral.
So, how did this happen, and how come Walmart is not getting sued for copying the design? Walmart, striving to compete with Amazon, allows third parties to sell on their platform. The bag was sold and distributed by a third-party seller; it was not created by Walmart, nor was it sold in physical stores. However, Walmart has since taken the listing down.
Why It Matters:
This is secretly a huge win for both brands involved. Hermès retains its mystique, and a huge growing interest in the original bag. Walmart gets a moment in the spotlight by being part of a cultural conversation about luxury for the working class. The “Birkin look-alike” is a great example of the power of social media to bring wildly different worlds together and highlighted how even a perceived copy can elevate the original, reinforcing its iconic status.
Key Takeaways for Brands:
- Lean into cultural moments: Both Walmart and Hermès gained relevance in different ways through this viral moment. Staying attuned to these conversations can create unexpected wins.
- Remember your audience: Walmart’s affordability and Hermès’ exclusivity both appealed to their respective markets, proving that owning your niche can drive success even in the midst of controversy.
Conclusion: Strengthen Your Brand with Embark
January is not even over, but these brands are giving us a crash course in marketing. The way brands respond to challenges, controversies, and conversations sets the tone not just for their image but for the industry as a whole. As the year unfolds, these lessons remind us that staying adaptable, authentic, and aware is more than strategy—it’s survival. Let’s see where the rest of 2025 takes us.
At Embark, we specialize in helping brands navigate the complexities of reputation management and consumer trust. If you’re looking to strengthen your brand’s connection with your audience and avoid common pitfalls, reach out to us today for a complimentary 30-minute consultation.
