Niche businesses that aim to help the poor attract competitors
When Blake Mycoskie founded TOMS shoes six years ago, his pitch to consumers—buy a pair and a second one will be donated to the needy—helped launch a phenomenon that retail consultants call compassionate consumerism. Since then it’s been imitated widely by established brands. Inspired by TOMS, Skechers USA launched a brand called BOBS, as in Benefiting Others By Shoes. Urban Outfitters stores feature apparel by Threads for Thought, which gives part of its sales proceeds to humanitarian groups.
For retailers like Skechers, whose revenue fell 20 percent last year, the charity angle is a way to persuade wary consumers to spend in a tough economy. Shoppers in their late twenties and early thirties, the so-called millennials, are particularly susceptible to such pitches, because they don’t have the means to make big donations and they admire brands that embody their save-the-planet ethos, according to Mara Einstein, a Queens College professor whose book Compassion, Inc. was published in April. Still, the efforts increasingly seem like a naked marketing ploy to spur sales and could backfire, she says. “It’s almost become marketing wallpaper,” she says. “Everybody is getting on the bandwagon.”