Retailers Need a Social Conscience to Survive
Millennials and Gen Z Shoppers and Employees Require More
I have been doing a lot of research on the new generations (Millennial and Gen Z) lately. Why? Because they now make up the majority of the workforce in the US. And when yo make up the majority of the workforce, pretty soon that means you have the majority of income to spend. So these groups represent two very important challenges for us.
First, they demand a customer experience that exceeds their expectations.
Second, they demand an employee experience that places things like purpose and social involvement above pay.
Recently, I was reading the business news for my city. There were a coupe of business in that article that I remember reading stories about these retailers doing an event for a local charity. It was a canned food drive in which they asked their Customers bring in canned food items and in return the Customers received a discount on their purchase. Another story told of a clothing store that did a “trade-in” promotion giving the Customer 10 percent off the purchase of a new shirt when they brought in their old shirt and donated it to the local homeless shelter. Both are examples of inspiring stories and great ideas for marketing.
But what is the one thing both of these stores have in common? You might guess visionary leaders or caring employees or creative marketing. The answer is they are both closed.
Gone. Out of business. Not a very inspiring way to start an article, yet I hope you continue reading; otherwise, you might think the moral of the story is that charitable marketing is closing down stores!
The truth is that in each of these examples, as is the case with about 80 percent of what I see today, the focus was not on being charitable, but on making sales.
In other words, the purpose of the event or drive was not to raise awareness for a need in the community, but a clever way to increase traffic into the stores.
Because of the heart or motive behind these events, they never weave themselves into the fabric of the corporate culture of that retailer. Nor did they change the opinion or impression of the retailer with the community in which they were located. If you are running a retail store today, you know the dying breed is the Customer who crosses your threshold. You are seeing more and more people go online for their needs and less people coming in your doors. You are looking for a way to stop this trend and you might try one of these “events.” But the problem is you do not need to get them in your door, you need to get them offline.
You need to be a place for employees to work that they can be proud of when they tell their friends. You need to be place that sees itself as part of their very town or community you sell in. You need a conscience — a social conscience.
Socially conscience retailers operate on four key principles.
1. The purpose of engaging in charitable work is to become part of the community where the retailer lives.
If you own a home in your town, you may be part of a neighborhood or homeowners association.
You may volunteer at your kid’s school or help the local church down the street do meals for elderly people. The point is that you do things that serve the community where you live. Think of your store as your home. If it were your home, what are the needs around your home you see that you could meet like the meals you do at your church?
There has been a lot of companies following the Tom's shoes model of making donations a part of their marketing. Tom's gives away one pair of shoes for every pair purchased. Never mind the fact that they charge enough in the sale price of their shoes to pay for the free pair; customers eat it up. And so do employees. But with all the "copycat" companies out there, what we are discovering is that the customers (and employees) want it to be more localized. It feels more real and genuine.
So consider needs in your local community and serve or donate there. I'll focus more on this in point 4.
2. There is a regular rhythm to their activities.
If you want people to choose your store over the competition and to come in your door versus going online, then they have to see a regular rhythm of charitable activity. They must see you have a social conscience — that it's part of your culture. In other words, when a Customer makes the decision to leave their current choice retailer to shop with you, they need to know that this is not a ruse to get them in the door. And if your biggest competition is online, then you need a weapon they cannot touch.
It’s not an event to these retailers. They put in place activities and behaviors that continually reward the Customers and not just one time a year during the “drive.” They weave this into their core values and every employee and every customer knows about it. If you want to collect toys, then do it year round. The hospitals often get inundated with toys during Christmas, so much so, that they store a lot of the donations to be able to make it through the year. Otherwise, they would have kids who did not get toys for other special days like their birthday when they are in the hospital. If your store collected toys year-round, the children’s hospital would get these toys year-round and you would be establishing yourself as a valued member of the community year-round and not just another retail store.
3. Sales growth is a byproduct of this core value and not its purpose.
If you go into charity for the purposes of creating a “clever” marketing campaign you will get a lift in sales, but no loyalty or retention from those customers who participate. If, however, you institute programs that have lasting impact and effect and your focus is not about generating sales, but rather serving a need in your community, then your efforts will be returned to you many times over.
The point here is that do not get involved just to raise sales. Sales will come. Be patient. Remember, you are becoming a part of the community and just like one event will not establish you, so too will the focus on sales growth derail you. However, do take the opportunity to publicize your efforts in a press release. Press releases are marketing as well.
4. Focus locally.
The best retailers find relationships within the community they are serving and serve them. For example, when we had our shoe stores, we wanted to develop a social conscience that related to a need in our community. At the time, the cat population was out of control. So, we put a cat in each of our stores from the local shelter. Customers would come into the store and the cat would do the “selling.” In fact, if you went to the shelter and adopted a cat, our store paid 50% of the adoption fee. After a while, we became known in the town for this and we would get people stopping by with a kitten they found wandering the streets. They would say, “we know you guys help cats find a home so we brought them here.” Think about it — they brought the cat to our shoe store and not the shelter!
I cannot tell you the number of times we had people tell us that they shopped with us because of Hugo Boss or Kate Spade or Mezlan or whichever cat (we named after manufacturers) was in the store at the time. Even dog lovers would support us. At times, we even had people leave us a “tip” for our service and say “it’s for the cats.”
The point of this example is simply that instead of doing a drive or campaign, we looked around our community for a need, matched that with something the employees were passionate about and created a name for ourselves as “citizens” of the community. Most importantly. it created tremendous loyalty to your stores.
For your store, it might be food for homeless, or sporting goods for the community center or books for the impoverished library. The key is do not look for the “obvious” fit. For example, we had shoe stores. And yes, before the cats, we founded our own charity called Sole Hope. We collected gently worn shoes from our customers and “retooled” them for the homeless in our town. Later, we connected to a national charity who was doing the same thing and stopped our own efforts to join theirs. "After all, they are national, we thought, how much better it must be!" But the impact in our town was not there. We kept this program in place, but since it was not connected to a need in our community, it did not resonate well with our customers. Our shoes were now going around the world. And while this was a blessing it did not place our store into the hearts of the city the way our cat program did.
The purpose of this article is not to diminish the importance of the charitable things retailers do even if it is just one time a year. In fact, I would encourage every retailer to do something for charity at least once a year. There is great work done through these efforts and its disrespectful not to recognize it. However, we are trying to highlight the difference between having a social conscience and becoming a member of your community meeting and serving needs of those who live and shop in your community versus having a sales conscience and putting together a clever event for July 4th.
If your store cares for your community, your community will care for your store. And when the community cares about your store, they do not haggle over price or “showroom” you; they are loyal ambassadors for your store. The Customer might even choose to buy in your store versus shopping online (even if it costs more) as they did for us. All because they wanted to reward us for caring about the community and city in which we all lived. And there is no amount of marketing money that could ever match the impact of that.