Bombas, THINX, Public and other industry experts question whether socially-aligned revenue models will force brands to go product-less
PSFK’s Editorial Roundtable series takes its inspiration from the traditional roundtable: bringing together industry insiders to share their insights on emerging and compelling trends in an idea-friendly manner. PSFK guides the discussion and our roundtable helps guide the future.
In direct opposition to prevailing political rhetoric, good companies aren’t just acutely aware that they can no longer privatize profits while socializing costs but that social sector problems are business problems. What’s more, in response to mounting pressure from socially-minded consumers and workers, companies must ask themselves whether they’re a business conducting and carrying out social good, or one whose very DNA is socially good in nature.
PSFK’s Labs new report, The Impact Debrief, explores the world of social innovation and business impact. With the implications determined from our study, we ask: how can society expect brands, their business models, and business as we know it to change?
In this month’s three-part Editorial Roundtable, PSFK spoke with industry experts to discuss how companies can elevate impact, influence and innovation in their mission statements, and conversely, how they can be leveraged to drive business growth.
The experts include:
David Heath | Co-Founder & CEO of Bombas – makers of purpose-built socks that are making the world a better and more comfortable place with every pair sold.
Phillip Haid | Co-Founder & CEO of Public – a leading agency-slash-consultancy-slash-incubator helping brands understand how purpose and profit can function in tandem.
Miki Agrawal | CEO & Co-Founder of THINX – a period-proof underwear line—that has a way with words and clever marketing—that trains Ugandan women in the ways of entrepreneurship.
Caroline Hadfield | SVP of Personal Care at Biossance – a no-compromise cosmetics company committed to protecting people and planet.
Christina M. Alfonso | Partner & CEO of Madeira Global – an advisory and analytics firm serving asset managers in the area of ESG (environmental, social and governance) research and reporting in areas such as transparency and stakeholder alignment.
Studies show that consumers are willing to compromise quality or even pay more for a product if their doing so can ensure positive social impact. How does (or how should) this affect a brand’s fealty to its products? Will corporate social innovation push us to a post-product business model where brands can no longer justify a product that runs counter to social good, regardless of how integral it is to a brand’s identity?
Christina M. Alfonso | Partner & CEO of Madeira Global
“Make no mistake; brands are no longer a macro header for a portfolio of products. They now have the power to make a bold statement about our values and the lifestyle we choose to lead. Whether sparked by investor activism or corporate social innovation, companies like Starbucks, Whole Foods and BMW are just a few examples where consumer purchasing power is shifting toward brands whose corporate values are aligned with those of their target consumers. These brands are iconic thought leaders, and their triple bottom lines are proving that this strategic shift can be both scalable and both ethically and financially rewarding.
By promoting a socially-aligned revenue model, they are raising the standard of what corporations are capable of achieving and strengthening their power of influence; how they interact with and value their stakeholders is a key differentiator to both making money and driving lasting, positive change.”
Phillip Haid | Co-Founder & CEO of Public
“Although there are certainly an increasing number of market research studies that make these claims, there still isn’t significant market evidence that these behaviors are in fact true when it comes to most consumers’ purchasing habits and behaviors, despite what consumers say or believe they would do when presented with these choices.
The reality is that most consumers’ decisions are still highly motivated by price, quality and convenience, particularly given the economic challenges and realities in the world today, and it’s overly optimistic to believe that the majority will ultimately sacrifice quality or pay a premium just to ‘do good.’ Rather, they expect companies to solve this for them by figuring out how to provide more socially conscious and responsible products and services at comparable or better quality and price (and rightly so), but will reward companies handsomely that do.
It’s this latter reality—and the potential longer-term benefits and cost savings that result in building a more loyal, repeat and peer/socially influential consumer base—that we believe will ultimately make ‘social good’ businesses more competitive and sustainable in the long run.
For this reason, we also remain skeptical that there is any real likelihood of a near-term future where there is no room for brands or products that don’t clearly embrace some form of social good. Is it truly conceivable that we will eliminate or dramatically reshape the tobacco, alcohol, gaming or pornography industries? That advertisers will remove any suggestion of sexism, racism or other socio-economic disparity as a means of selling certain products? That entire sectors like financial services and non-renewable resources are likely to change their practices so dramatically that they actively seek to balance the interests of every consumer and the planet against the desire and pressure from stakeholders to maximize profits? We doubt it. At least not in the short term.
But will you see more examples of companies like Unilever rethink their approach to marketing a product like Axe, partly in response to perceived criticism of the conflict it created around how they merchandise Dove to women? Absolutely.
And we will continue to see many more brands recognize that being socially good is in no way at odds with making profit, in fact quite the opposite. Profit and purpose must go together if community and business are to thrive. It’s why we believe business will be the real driver for social impact in the world, because no other sector has the reach and influence on consumers’ daily lives to affect the material change needed in society.”
Caroline Hadfield | SVP of Personal Care at Biossance
“There has been a welcome acceleration of corporations willing to adopt business practices that consider the social and environmental impact of their product or services in parallel with driving profits. This movement will continue to grow, particularly in the more affluent developed nations where better informed and educated consumers are more aware of the negative impacts certain products can have, either to themselves or the planet. Good companies, offering ethical products will continue to thrive, and the more their commitment is seen as genuine and sustained, the greater brand loyalty they will create and engage more fully with their customers.
A brand’s loyalty to people and the planet should supersede its loyalty to a particular product. If a product is found to be counter to social good, the product should be reimagined in a new way that doesn’t have such a negative impact or it should be discontinued. If the company has transparency and trust with the public and strong communication, it has the opportunity to create even stronger ties and elevated credibility as a result of making this commitment.
We are already seeing huge numbers of consumers increasingly gravitating toward products that give back or have ethical commitments to workers, users and the environment. The products that will thrive in the future are those that are well-designed, create the results they promise, are socially-conscious and environmentally friendly and communicate those benefits to consumers in each and every one of its endeavors.
Unfortunately, the economic hardships that large elements of the population are faced with continue to ensure that price will be the overriding factor in their decision making. Many would prefer to drive an electric car rather than their 10-year-old gas guzzler or eat organic food rather than fast food takeout, but until the income disparity is dramatically changed, forces of necessity will continue to trump forces of good.”
Miki Agrawal | CEO & Co-Founder of THINX
“For brands, product is an extremely important method of self-expression. It’s a means to communicate who you are as a brand and what you stand for. So any mismatch between your product and your identity or your message will undermine your authenticity. If a brand is committed to social and environmental good, then its products shouldn’t run counter to that commitment.
At THINX, for example, we focus on reusable solutions, not disposables. In the United States alone, 20 billion disposable tampon applicators and pads are thrown into the landfill each year. It is against our ethos to contribute to that, so we choose to innovate reusable solutions.
Even with our giveback program, we choose to partner with organizations that focus on reusable solutions.”
David Heath | Co-Founder & CEO of Bombas
“Mission can’t stand alone. You need the product to back it up. You don’t need to, nor should you, compromise quality in the face of social good. In fact it’s something that can work with you. The more people like your product, the more they will come back and buy it, which will allow you to do more good. For example, while it might be our mission that draws a consumer in initially, if we didn’t have a good product, they wouldn’t come back again. But because we’ve worked to create a high-quality product, our repeat rates are strong and customers can feel good both about the mission and the product they are purchasing.
At the same time, you should never compromise your mission or dedication to ‘good’ for the sake of product. So if a manufacturing partner can produce great product, but has poor working conditions for its employees, that that would be a deal breaker for us. And I think we are seeing this as a growing trend. As brands and consumers are becoming more educated and curious on what to look for and which questions to ask, companies and manufactures are held to a higher level of accountability that will hopefully inspire positive change.”
PSFK’s Impact Debrief explores how companies are taking their corporate social responsibility initiatives to the next level. PSFK Labs spotlights innovation in the world of social good, offering insights into digital and organizational practices that will help any company elevate their impact and influence. Download the full report here and check back daily for exclusive content about the latest trends advancing corporate social innovation.
Note: If you would like to participate in a coming PSFK Editorial Roundtable, please contact us here.