The Current Economic Shopper: Part 1, Cause Marketing

(originally published April 2012)
The continuing economic stress that faces today’s consumers remains an issue for retailers as well, regardless of the kind of clientele their business targets.

With income levels stagnant and available spending money being stretched further and further for all consumers, brands overall have had to readdress and reassess how they are presented to the market and perceived by customers. Smaller retailers have had to face difficult choices in order to remain competitive with stores that have much higher buying power. Since focusing on price is not always an option for small businesses, their value must come from somewhere else. They must find their niche. This blog is the first in a four part series about the economic effects on the behavior of shoppers and how brands can address the economic factors facing their customers, industry, and business overall by focusing on what their customers value.

Cause marketing isn’t a new concept, it’s been around for decades. Businesses associate themselves with a cause (typically through a partnership with a non-profit) that is aligned with both their core values and the values of their customer base. Publicly promoting this involvement establishes a way for customers to contribute to the cause through their regular buying behavior. The benefit offered to the customer is a sense of contributing to a greater good, validating their purchase and adding value by extending the reach of each dollar they spend.

As the economic downturn extends through generations, shoppers have switched from seeking short-term cut-backs and now are seeking long-term solutions to financial problems. This often relies on buying higher-quality, durable goods and viewing their purchases as investments. Customers now include corporate goodwill in their calculations of value and want to make sure that their dollars are supporting a company whose visions and behaviors align with their own, sometimes even spending a little bit more to do so. By adding a charitable component to the purchase, retailers allow shoppers to stretch their dollar by adding value to the purchase and at the same time, gaining additional brand loyalty.

In this economy, cause marketing has allowed customers to include corporate goodwill in their calculations of value for products and services and affects their choice of which companies to support; consumers want to spend their money with companies whose visions and behaviors alight with their own. Customers are willing to pay more (a little more) for products that they feel “do good”.

Product(red), a division of the One Campaign, is an initiative that functions across businesses. Businesses that partner with the campaign donate a large portion of the  profit from (red) products to
The Global Fund, an organization that finances HIV health and community support programs in Africa. Brands that participate in this cause marketing initiative include the Gap, Nike, Apple, and American Express.

Some companies even base their entire business model on giving.  The most notable example of this is 
TOMS. This popular shoe brand was founded on the principles of generosity and charity.

Their One for One program ensures that for every pair of shoes that is purchased, a pair will be donated to children in need around the world. The shoes themselves are over $50, remarkably higher than a similar style and quality pair of shoes, but the buyer knows that part of the money includes donating another pair of shoes to people in need. So far, TOMS has donated over 1,000,000 pairs of shoes.

Cause marketing is powerful in this economy. More customers now feel the basic need and desire to help others, but due to the same economy, cannot. Companies that incorporate cause marketing allow their customers to help out, and feel good about contributing when shopping.

Have you implemented cause marketing in your business? We’d love to hear what you’ve done and how it worked. We’d also love to hear what ideas you have!