My spring carnival tip…. Purpose over profit
The power of a good narrative can’t be underestimated. We no longer interact with brands only to buy. That can be done anywhere, anytime. We go to experience, feel and be connected with the brand.
Stories inspire – as retailers we should seek opportunities to share our narrative with consumers and link our brand to their values in a meaningful way.
In recent times a number of retailers have put in place a “purpose over profit” strategy which has resonated with consumers, staff and investors. Here’s why this approach makes sense and why it should form part of your strategy and your brands narrative:
Consumers will buy from you if they are emotionally connected to your brand
Put simply, the numbers don’t lie. A recent survey suggested that approximately 90% of consumers are more likely to purchase from you if your company supports something that they care about. Further, there is evidence to suggest that consumers will pay more for sustainable offerings particularly among millennials.
A number of retailers have reacted to this trend. One of my favourite initiatives comes from Toms Shoes (A U.S based retailer who recently opened its first physical Australian store in Little Collins Street, Melbourne). For every pair of shoes purchased, Toms has made a customer promise to deliver a pair of free shoes to a child in need.
Socially conscious brands will attract and retain employees
Today’s employee is more concerned about what their employer stands for. Certain companies are struggling to find and retain the best talent based on the industry they operate in. As part of a recruitment survey almost 80% of Millennials considered the company’s social and environmental commitments when deciding where to work. One would expect that this trend would apply to Gen Z and future generations.
I’m no human resources expert but it isn’t hard to draw parallels between an engaged and talented workforce and a high performing business that is delivering exceptional customer outcomes.
Investors are observing the trends
Investors are sensing that this shift to purpose over profits has potential that deserves their attention. This is due, in part, by the millennial entrepreneurs they are coming into contact with that are seeking their funding and sharing their business ideas. This new breed of business developer, owner, and leader is focused on purposes rather than making money. One in four entrepreneurs aged under 35 said they were more motivated by social impact than by moneymaking, compared to just over one in 10 of those aged over 55, according the results of the HSBC survey.
It’s a perspective that presents a unique challenge for investors who have always been about the return that they would get from funding a business. Now, like corporations, they are considering what it means to first look at solving a problem and making significant impacts on social concerns, and from what they can see, it has potential.
Stand out from the crowd
People like to feel part of something bigger. At a time when the quality of most products is good or better, offering a sense of purpose will provide your brand with a point of differentiation. Given similar quality and price almost 90% of consumers will consider switching brands to one that is associated with a good cause.
“A brand is a living entity – and it is enriched or undermined cumulatively over time, the product of a thousand small gestures,” Michael Eisner, former CEO of Disney.
Contact Mark Schivaello and learn more about how BDO can help your retail business.