As retail continues to undergo the biggest transformation of our lifetime, traditional operators are repeatedly confronting the fact that there isn’t just a single reason they might be struggling for relevance, but a host of them. Many legacy retailers and brands that were late to the e-commerce game want to be sure they don’t repeat the error and are working hard to keep up with how consumers want to interact and shop with them on new channels and social platforms such as Instagram. But it’s challenging because consumers’ preferences, and technologies, keep changing quickly.
At the same time, legacy brands have had to fight to maintain share as new rivals, online marketplaces, and rental and resale models have soared in popularity. They’ve also been forced to rethink their stores and integrate new retail technologies that can help provide a seamless omnichannel experience.
Another area where many traditional retail companies have struggled is in developing corporate social responsibility (CSR) initiatives and making them a core part of their operations. On that front, the legacies have a high bar to reach, as popular digitally native brands like Toms have built CSR into their very foundations, integrating both charity and profit-making into their business models.
I worked with Toms founder Blake Mycoskie in the company’s early days, long before the company established itself as a global leader in CSR and partnered with the likes of The Clinton Foundation and the Wildlife Conservation Society. Toms’ one-for-one model was built in from the beginning: The company was actually created to fulfill the mission, which was originally to donate a pair of shoes to a child in need for every pair purchased. Over time, the company has expanded its charitable reach along with its product offerings. The brand now offers shoes, eyewear and coffee and works to restore eyesight to people who are visually impaired, provide clean water to people in need in six countries and support safe birth services, among other initiatives.
The thing Toms gets just right as a leading social business is that it provides an emotional connection that lets consumers be part of something bigger. The brand also shares original content on its web site to drive further engagement and let consumers know how they are helping people in need by making Toms purchases or taking action in concert with others in the Toms community. The company encourages shoppers to “wear your beliefs” and allows them to choose one of six social causes to support (equality, safe water, people experiencing homelessness, mental health, giving shoes or ending gun violence) when making a Toms purchase.
Of course, many established brands have indeed been giving back for years, but their efforts often focus on health initiatives; few are centered on alleviating the effects of poverty or homelessness. For example, Ralph Lauren launched its Pink Pony Campaign to help in the global fight against cancer way back in 2000 and Bono and Bobby Shriver created (RED) in 2006 to fight HIV/AIDS in Africa. Brands such as Gap, Converse and Apple have launched (RED)-branded products and donated portions of the profit they have made on those items to the Global Fund. The initiative has generated more than $600 million to date.
But there is still plenty of room for CSR development and transformation among traditional retailers, and in my own work, I’m focused on helping them boost customer engagement and shopper traffic, while contributing goods and encouraging customers to donate. The goal is to create a circular system that drives customer engagement, sales and traffic while also encouraging customers to participate in giving back alongside the company.
Why Companies Should Incorporate CSR?
Giving back is good for business. Consumers are increasingly educated about how the companies they buy from operate, and they are conscientious about the impact their personal spending decisions might have across the world. A 2017 survey by Cone Communications found that 89 percent of Gen Zers would rather buy from a company that is addressing social or environmental issues than a company that is not, and 92 percent say they would switch brands to a company associated with a good cause, all else about the product being equal. In an environment where shoppers are provided nearly endless choices, anytime and anywhere, brands that incorporate social good initiatives have a competitive advantage.
Giving back is good for others. Donations of money, product, or time and effort don’t only help the end recipients — they benefit those doing the giving. Shoppers who buy product from brands that give back get to participate in something much bigger than a retail transaction. It may seem obvious, but it simply feels good to do good.
Giving back is good for employees. Company-led social good initiatives boost employee morale and unite teams in pursuit of common goals. Giving employees at all levels the opportunity to work together on projects that benefit not only customers or clients, but society, improves company culture, strengthens communities and allows people to serve a purpose that goes beyond the company’s own profitability goals. CSR initiatives can also be fun for teams, allowing them to work together and bond with one another through volunteer initiatives outside of the workplace. And, finally, there’s a strength-in-numbers benefit: While millions of individuals volunteer for and donate to various causes each week on their own, when a company gives its entire staff the opportunity to do good via a specific initiative, the end effect is multiplied.
Some Best Practices for Incorporating CSR
Publicize your efforts. Gen Zers’ affinity for brands that reflect their own values is well documented by now, so companies should ensure they are publicizing their CSR efforts to these young consumers and shoppers of all ages. Digitally native brands are using social media to their advantage, and consumers have easy access to much more information on companies and products than they used to. Legacy brands should use their web sites to share their social good initiatives, of course, but also use in-store signage and video displays, social media, and traditional advertising to spread the word. Incorporating personal stories that help people feel emotionally invested in a cause can help drive awareness and action. However, brands can face consumer backlash against marketing campaigns that position the company as being more talk than walk when it comes to corporate giving and CSR, so it’s important to keep the focus on the charitable initiative rather than the brand’s involvement in it.
Partner with established charities and nonprofits to maximize effectiveness. Organizations like Dress for Success, Bottomless Closet, Delivering Good and even Amazon, which just rolled out its Fulfillment by Amazon (FBA) Donations program in September 2019, have the resources and infrastructure that can help retailers and brands donate excess product to people in need rather than discounting or liquidating it. These and other organizations donate certain excess and returned products to charities, managing the logistics and ensuring that items are distributed in a responsible and timely manner. Donating excess inventory has obvious cost-saving and tax benefits for companies, but it can be challenging for traditional retailers to set up donation systems and vet networks on their own.
Look for ways to give back that make sense for your business. Not every traditional retailer and brand will be able to operate a buy-one, give-one model like Toms. Some might be better served by focusing on local-community mentorship or volunteer opportunities for employees, or monetary donations. For those seeking to donate product, it’s best to consider when and where certain items might be most needed. For example, items such as water, food, blankets, diapers, toiletries, and socks and underwear are often needed immediately when a community is hit by a natural disaster like a hurricane or tornado. Warm coats are needed every winter. People experiencing homelessness or long-term poverty often have different food and clothing needs than those who have recently been affected by disasters. Traditional retailers and brands should consider the needs of different communities, and how they might best help, and then partner with organizations that have proven records of effectively distributing goods, money or services within localized networks.
The point is to create a CSR strategy that fits your business and then commit to following through by allocating the resources needed to achieve specific objectives. Monitoring progress metrics over time and sharing news about various initiatives’ impact with consumers are also key to doing well by doing good.
Andrea Weiss is chairman Delivering Good, a nonprofit organization that unites retailers, manufacturers, foundations and individuals to support people affected by poverty and tragedy. She is also founder and chief executive officer of The O Alliance and currently serves as a board member of several publicly held companies.