The shoe market has to be one of the most crowded, complicated, and diverse marketplace imaginable. It’s dominated by some very large players with entrenched brand recognition (Vans, Keds, Nike, Adidas, just to name a few).
Buy one pair of shoes, and we’ll get a pair of shoes to someone who needs a pair of shoes.
When Toms sells a pair of shoes, a pair of shoes is given to an impoverished child, and when Toms sells a pair of eyewear, part of the profit is used to save or restore the eyesight for people in developing countries. It’s a cause – helping people get shoes, and as a consequence, the people who seek out and buy Tom’s shoes do so for two reasons, one – he makes good shoes, and two – you can do good by buying good shoes.
Author Daniel H. Pink described the company’s business model as “expressly built for purpose maximization”, whereby Toms is both selling shoes and selling its ideal; creating consumers that are purchasing shoes and also making a purchase that transforms them into benefactors—a company goal if it is not a consumer goal. Richard Branson wrote of the company’s business model in his book Screw Business as Usual saying, “They look for communities that will benefit most from TOMS based on their economic, health and education needs while taking into account local business so as not to create a correlating negative effect.”
You’re not buying shoes, you’re buying a cause, and the support of that cause, is made in buying shoes (or eyewear as the company has expanded into eyewear as well).
Tom has no competitors (neither does NubianSkin). Ideas and causes can only have a leader, and followers. So if someone copies the idea, they’re a follower (and their actions would help bring more of a spotlight to your cause).
Personally, I hate the place – Chipotle. First, I don’t want a burrito as big as my head. Second, I don’t like the burritos period (I’m not a big burrito guy). That said, my kids LOVE Chipotle – as apparently do lots of others.
Chipotle has been critically panned by the advertising industry as having made horrendous ads and doing its marketing completely ass-backwards. The company’s “Scarecrow” ad is either loved or hated within the advertising field – with the venerable guard of the “old school” pretty much universally hating it. Chipotle’s customers, however, love it – they see it as a rallying cry for humanity – eat at Chipotle and save the world.
Therein lies the contradiction that makes Madison Avenue think Chipotle is a backwater brand, while it surges forward as brands like McDonalds retreat.
Steve Ells, founder and CEO of Chipotle, opened his first restaurant in 1993 with a modest budget and deep commitment to quality. Chipotle’s quintessential customer-focused business model has been a primary differentiator in the crowded space of fast-food that has delivered an annual growth of 20.3% per year over the past five years along with an earnings per share that has increased over a 1000% since going public in 2006.
With Millennials entering the marketplace in greater numbers, their purchasing power has increased dramatically. As a result, the role of social responsibility tied to purchasing decisions – and an awareness of which companies have joined the movement and which have not — has been a growing trend across consumer groups. What’s more is that Millennials expect what is called the reciprocity principle; a two-way mutual relationship with companies and brands. Chipotle has satisfied this requirement by delivering a great product, which also makes people feel good about consuming it. In this regard, they’re not all that different from Tom’s shoes – at least not in marketing principle.
Millennials believe in what Chipotle stands for: Community. And based on that insight, the brand has consistently created a way for its customers to explore their interest in “food with a conscience,” making what could be tedious and preachy into an ongoing dialogue and movement that is both socially conscious and culinary-ily satisfying. It results in brand evangelism.