I bought my two-year-old daughter a new pair of shoes this past weekend. It came down to the pink Converse low-tops vs. the pink TOMS Mary Janes. It was an easy choice for me. As I was cajoling Chloe to try on the TOMS Mary Janes (under some degree of protest), I said, “You know, Chloe, if we buy these shoes, another kid who doesn’t have any shoes will also get a pair.” I can’t imagine Chloe really understood what I meant, but she stopped wiggling, looked down at her feet and declared them, “Pretty!”
Later that afternoon my mind started nagging at me … had I made the best choice? I’d read some stuff about TOMS in the past, I seemed to recall, that wasn’t so flattering. So I did what we all do – I Googled it. My quick search didn’t reveal anything nefarious … but I ran across a Fast Company article that derided TOMS for not solving any problems at all and, instead, creating new ones. The article posited that when do-gooder organizations come into an impoverished setting and give stuff away, it makes it impossible for local entrepreneurs to sell their goods, thereby keeping the local economy dependent on handouts. The article implored TOMS to change its business model to deal with the macro problems of economics and disease (specifically hookworm). The article also declared that “there is a finite and unpredictable market for the feel-good value proposition – consumers are fickle when it comes to committing to brands based on nonfunctional attributes.”
Our data supports that last assertion. According to our forthcoming Eco PulseTM study, roughly one-third of Americans claim that “a company’s nonprofit partnerships and donations impact my purchase decisions.” However, only 3% of the population can actually call to mind a brand they’ve bought for that reason … and Newman’s Own has been the most-often recalled brand two years in a row now. And when we ask, “What are the three most important things companies should be doing to positively impact your purchase decisions,” manufacturing in the U.S.A is at the top of the list, something TOMS doesn’t actually do. In fact, the TOMS model, which I’d put in our “donate to health and human services” bucket, is only preferred by 5% of the population, and when it comes to CSR activities, most Americans prefer an organization’s charitable activities to be local.
All that said, I’m a believer in throwing a rock in the pond as a way to change the world. Adam Lowry of Method put it pretty simply last week at Fortune Brainstorm Green: When Method “greens-up” its product lines, so do the category leaders. According to Adam, when Method launched a 3X concentrated laundry detergent, Unilever launched one within a year, and P&G launched one within two years. Same with the 10X concentrate. So Method – one of the little guys in the laundry category – is changing the entire category through its green innovations, forcing its competition to follow suit.
TOMS will absolutely not solve all the problems in the countries it serves, but by throwing a rock in the pond like Method, they will likely be a catalyst to create those changes. And by broadening their design/style choices (which is certainly the main driver behind Method’s sales success), TOMS will appeal to more people who don’t give a rip about sustainability or their buy-one, give-one business model. Consumers, like Chloe, will buy their products because they’re pretty. To the industry – and other industries – though, it will appear that the buy-one, give-one model is the cause of TOMS success, and competitors and other entrepreneurs will focus on ways to beat TOMS at their own game. Eventually, the broader health issues and economic issues TOMS isn’t addressing will get tackled by those entrepreneurs looking for a new value proposition upon which to grow a business – all because TOMS threw a rock in the pond. And that’s exactly how we change the world.