Charity and profitability have traditionally been viewed as mutually exclusive, but a new wave of business models is establishing a “third way” that combines social good with sales and marketing—and it’s proving popular with ethically minded Millennials. Toms popularized one-for-one (buy one, give one), a great example of this new mode, and has expanded from shoes to eyewear to an entire marketplace in the past year. Founder Blake Mycoskie describes one-for-one as a “movement”: something bigger than commerce that will transform one category after another. Coffee is Mycoskie’s most recent addition—each bag sold provides a week of water to people in need. In using philanthropy as the lead, Toms is also driving sales; the brand is valued at $625 million. More companies are starting to employ its model. San Francisco-based food delivery company Munchery, for instance, donates a meal for every meal bought, and Warby Parker has used a donation model with eyewear.
Consumers, particularly Millennials, are increasingly discriminating between brands by looking for ethical behavior and sustainability. They are also looking for brands and companies with clear values.
A growing number of brands are focusing on doing rather than talking as a marketing platform, using activism, innovation and philanthropy projects to connect with consumers and inspire marketing content. Kenco, for instance, sources its coffee from some of the most beautiful countries in the world, but many have a strong gang culture. In a campaign executed by JWT London, Kenco has embarked on a yearlong training scheme for at-risk people working in coffee farming—advertising showcases the project, not the coffee. Toms does not advertise but rather takes a group of customers each year on a “giving trip,” during which they hand over the donated pair of glasses or shoes to the person in need. Customers, who become lifelong “super fans,” share videos of the trip online.
Patagonia has launched several innovative sustainability initiatives. In 2014, it created an eco-friendly wetsuit with manufacturer Yulex. Rather than lock Yulex into a lengthy exclusive contract, Patagonia signed the company for just a year, inviting competitors to work with the new material to drive down its price. Patagonia has also announced it is using tax credits to invest $13 million in the construction of solar panels on 1,000 homes in surf haven Hawaii, where utilities are very expensive, joining forces with a local solar company and a Hawaiian bank to do so.
Rather than focus their efforts on self-serving content, brands are increasingly using innovation and social initiatives with genuine merit to tell their stories, and allowing social media to do the rest.
A clutch of new platforms invites consumers to create personalized and local “brands” in their own image—recognizing the sharing economy’s growing desire for personalization, collaboration and consumer entrepreneurship.
Pernod Ricard’s Our/Vodka invites customers to create their own local version of its brand in a business partnership. Our/Vodka micro-distilleries in Berlin and Detroit, among other cities, were opened in partnership with local stakeholders, who receive 20% of the profit in exchange for investing their time and managing the distillery as well as marketing and events. Pernod Ricard invested the capital and supplied a global recipe, which is adjusted to include local ingredients. In Glasgow, the new boutique brewery Drygate invites consumers to create their own beer “brand,” complete with personal labeling. In May 2014, Tumblr updated its iOS app, allowing users to customize the look and design of their blog from within the app for the first time; they can also change colors, fonts, pictures and much more. The total number of unique iterations possible is now 3.3 billion, one for every Internet user in the world.
Consumers, particularly Millennials, are increasingly starting to think of themselves as brands, curating their online image and monetizing it through social media clout, micro-retail platforms and YouTube. They’re also using new platforms to become micro-entrepreneurs. This is a way for brands to connect with this spirit and empower it.