Doing well by doing good
Two years ago when Jennifer Walsh started her line of grooming products — Pride & Glory — bearing the logos of major college teams, she knew she wanted to give back to the communities supporting her.
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Walsh had recently volunteered her time donating clothes to those impacted by Superstorm Sandy, and pledged to continue to make a difference. Now 2% of her profits from the sale of each Pride & Glory grooming item goes back to the charity of each college in her product lineup’s choice.
“What if I created a beauty brand that, at its core, was about giving back to local communities? Could this concept literally change lives through beauty? When one person uses their voice for change, they can make a real difference,” Walsh said.
She’s not alone. A study from Cone Communications revealed more than 66% of companies support causes in some form. Funding from cause marketing has more than doubled in the last 12 years in North America. In fact, the concept is forecasted to drive $1.92 billion in funding to causes in 2015, according to CauseGood, an organization that helps advise companies on the concept.
Cause marketing — defined as the marketing of a for-profit product or company, which benefits a nonprofit or supports a social cause in some way — is not new. Paul Newman illustrated the power of doing well by doing good with his Newman’s Own brand, founded in 1982, which donates 100% of after-tax profits to charitable organizations, and has raised more than $450 million for charities in its history.
Toms has provided one pair of shoes to those in need for each purchase since it was founded in 2006 — the company recently has extended into eye wear — while myriad companies allocate a percentage of certain item sales during specific months, such as sales in October benefiting breast cancer research.
What is emerging, however, is a new consumer who seeks out these brands rather than just viewing philanthropy as a nice add on. These shoppers are passionate about the companies and causes. They appreciate that they can make contributions in a frictionless manner by buying products they need anyway.
Millennials may be driving the surge, but the desire to support good causes stretches across all demographics. Research presented by Cause-Good supports the swelling approval of brands or merchants with philanthropy behind them. Ninety percent of consumers said they were likely to switch brands to one that puts money into a worthy nonprofit organization, according to a study.
“Consumers love companies that give back because it makes them feel like they are part of the cause,” said Deborah Kerner, president of Diane Terman Public Relations, who often counsels her accounts on how to pinpoint the right partner. “Not everyone has the means to contribute to the causes they would like to, but if they make a purchase where a percentage goes to a cause they are concerned about, it helps them feel like they are doing something to contribute.” People like to see corporations integrate social impact campaigns into business models, she added.
And it is becoming a business pillar. According to CauseGood, 97% of marketing executives believe cause marketing is a valid business strategy.
Cause marketing can help a brand stand out from the pack in crowded categories, while also attracting new consumers who are even willing to spend more for the products. CauseGood cites statistics that when quality and price is equivalent, social purpose is the No. 1 deciding factor for consumers globally. Forty-two percent of North American consumers said they would pay extra for products and services from companies committed to positive social and environmental impact.
The goodwill extends to retail doors, too.
Social media has helped spread marketers’ campaigns, while also allowing consumers an avenue to let others know of their support. According to the Cone Communications Social Impact Study, 88% of Americans want to know about corporate social responsibility efforts. In fact, they like to see it on product packaging or labels. More than half even read the label before buying to ensure a product is committed to positive social and environmental efforts.
Kerner, however, has a word of caution about just picking a cause without forethought. “Companies looking for causes to contribute to need to do their research. Causes might charge a fee for a company to participate and align in a charitable program, use of their name, logo, etc., and that’s the biggest mistake a company can make — the cost of participation may be more than what they can actually contribute, she warned. And, consumers do research to make sure donation claims are authentic. They don’t want to see an organization just slapped onto a brand without reason behind it.
While Toms and Paul Newman are well known for charitable efforts, following are 10 more brands and organizations that are giving back in a meaningful way. This is not a definitive list of rankings — there are no winners and losers here. These are just some snapshots of companies that are doing well by doing good.
After the 1994 Northridge earthquake in California, Howard Schiffer, an expert in childhood health, was called upon to get vitamins to victims of the after-effects of the earthquake. That encouraged him to create Vitamin Angels, which helps at-risk populations gain lifesaving vitamins and minerals. Walgreens works in tandem with Vitamin Angels, with a recent campaign raising more than $5.5 million and reaching more than 21 million children.
Beyond ushering in new natural choice options in beauty, Ido Leffler, a co-founder of Yes To, wanted to do more than just sell products. The Yes To Seed Fund was born and has provided more than 50,000 meals around the world. He then set his sights on much-needed school supplies and launched a stationery line at Target called Yoobi, which for every item purchased donates double that to a classroom in the United States. So far, sales have helped more than 1 million children.
Just as important to Sundial’s founder and CEO Richelieu Dennis’ efforts to change the way retailers merchandise beauty care, he’s equally driven to make sure the company is a good corporate partner. Not only are the items made from natural, certified organic and ethically sourced ingredients, Sundial adheres to what Dennis calls “community commerce,” a purpose-driven model that builds stronger communities and better business. Since 2011, Sundial Brands has invested approximately $5 million to support women’s empowerment efforts in three primary areas — entrepreneurship, education and equality — via community programs, procurement, foundation donations and needs-based development programs, among others.
Pantene Beautiful Lengths
When Emily Campeas went to donate her long locks to a worthy cause last year, her Internet research took her to Pantene Beautiful Lengths, where she was confident her beloved hair would go directly to cancer patients and not be sold. Pantene Beautiful Lengths works with HairUWear and the American Cancer Society to take the donations and create high-quality, real-hair wigs at no cost to women undergoing cancer treatment.
Tide Loads of Hope
Hurricane Katrina kicked off Tide’s mobile laundromat that provides residents at least some vestige of normalcy during a tumultuous time. Since that time, Tide has helped renew hope for nearly 45,000 families across the country affected by natural disasters, from tornadoes in Missouri to flooding in South Carolina. Tide helps support its efforts through sales of nostalgic Tide t-shirts.
Dove Self-Esteem Project
Over the past 10 years, Dove has been helping girls reach their full potential, overcoming issues keeping them from their best. More than 17 million have been touched so far through myriad campaigns that also have netted Dove tremendous public relations impressions.
Unilever Sustainable Living Plan
This is the blueprint for Unilever to double the size of its business, but also reduce its environmental footprint while boosting the company’s positive social impact. Among the moves are changing how raw materials are sourced, as well as operating LEED-certified facilities.
SoapBox Soaps was founded in 2010 in the college apartment kitchen of David Simnick and is now a brand found in many major chains, including Target, Whole Foods and Giant Eagle. For every item sold, SoapBox donates a bar of soap or a month of clean water to those in need.
Doing good isn’t limited to human purchases. BarkBox, a monthly dog treat subscription service, supports 3,000 rescues and shelters, as well as other animal support nonprofits.
Like Toms, Method has pioneered responsible marketing practices. The company gained shelf space in crowded household categories by adhering to responsible ingredients-sourcing, green chemistry and recycled and recyclable packaging.
H-E-B decks the halls with online deals
SAN ANTONIO — H-E-B is blazing another new trail in the online grocery market with a special holiday promotion.
The Texas-based grocery chain is hosting 12 Days of Deals, online only, Dec. 5 through Dec. 16. Each day, HEB says, it will feature a doorbuster deal with something for everyone, from TVs and toys, to crockpots and coolers.
"We are excited to offer such a generous assortment of daily deals through our new online store just in time for the holidays," said Bill Anderson, group VP, general merchandise, drugstore and beauty. "We hope these 12 Days of Deals and free shipping will make it easy for shoppers to check off their gift lists no matter where they live."
H-E-B, one of the nation's largest regional grocery retailers, recently launched an online store offering 50,000 shelf stable foods, drugstore and general merchandise products.
The 12 Days of Deals lineup (while supplies last) includes:
- Dec. 5 – 50" Hitachi TV – $299 (was $599)
- Dec. 6 – Corona Cooler – $79.99 (was $159.97)
- Dec. 7 – QFX Speaker – $99 (was$189)
- Dec. 8 – 50% off Bella Appliances
- Dec. 9 – Hot Wheels Ultimate Garage (includes six vehicles) – $69.99 (was$88)
- Dec.10 – 40% off CocinawareTM – H-E-B line of colorful cookware, kitchen gadgets and tableware
- Dec. 11 – 30% off 38 quart Kodi Cooler
- Dec. 12 – Frozen Boombox – $9.98 (was$29.99), Frozen Headphones – $9.98 (were $19.99)
- Dec. 13 – 40% off Calphalon
- Dec. 14 – 30% off all Toys (excluding LEGO)
- Dec. 15 – 50% off L'Oreal Makeup (discount limited to first 10 items per purchase)
- Dec. 16 – 50% off Slow Cookers
Each deal will start at 10 a.m. CST. Deal of the Day purchases are limited to one per customer, per check out. Shipping is free for orders of $25 or more that include the featured deal of the day. All customer orders are delivered using standard shipping and in some Texas cities may arrive the very next day. Orders are shipped in one to three days and can be sent throughout Texas, to 46 states (excludes California, Alaska and Hawaii), and to any Army Post Office or Fleet Post Office (APO/FPO) address in the world.
H-E-B operates more than 370 stores in Texas and Mexico and at HEB.com.
Ulta Beauty’s Q3 glamorous with sales up 22%
BOLINGBROOK, Ill. — Ulta Beauty's formula of one-stop shopping for prestige, mass and salon beauty products continued to produce impressive sales growth in the third quarter.
The beauty retailer reported a 12.8% increase in customer traffic for the third quarter ended Nov. 1 and average spending rose by 2.2%. E-commerce sales grew 56.3% to $46.2 million from $29.6 million in the third quarter of fiscal 2014, representing 190 basis points of the total company comparable sales increase of 12.8%. The company also raised its outlook for the third time this year: Comps are now expected to rise 11%, rather than the 8% the Ulta team forecast in May.
“Ulta Beauty’s excellent performance in the third quarter was highlighted by top line momentum driven by double digit traffic growth, leading to above-plan earnings growth,” said Mary Dillon, CEO. “Delivering against our six strategic imperatives continues to drive our business forward. We believe our efforts to build awareness of the Ulta Beauty brand are bringing more guests to discover our differentiated assortment and the benefits of our loyalty program, now boasting 17 million active members. As a result of our financial performance in the third quarter and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full year earnings growth rate to be in the low twenties.”
One reason for Ulta's success may be the retailer's personalized in-store experience, which cannot be duplicated by Amazon or other Internet retailers. Which is not to say the company is ignoring e-commerce. Indeed, Ulta is managing to win at both store and online traffic, a difficult feat in the current retail environment.
For the third quarter net sales at Ulta increased 22.1% to $910.7 million from $745.7 million in the third quarter of fiscal 2014. Income per diluted share increased 22.0% to $1.11 compared to $0.91 in the third quarter of fiscal 2014. The retailer's online business also posted strong results, rising 56.3% to make a solid contribution to overall comps growth.
During the third quarter, the company opened 45 new stores and ended the third quarter with 860 stores and square footage of 9,080,084, representing a 12% increase in square footage compared to the third quarter of fiscal 2014.
For the fourth quarter the company expects net sales in the range of $1,212 million to $1,233 million, compared to actual net sales of $1,047.6 million in the fourth quarter of fiscal 2014.