How Prioritizing Social Impact & Purpose Can Help Your Retail Business?
In a world where consumers are increasingly aware of the social and environmental impacts of the brands they buy from, it’s more important than ever for companies to focus on their social impact.
Prioritizing social impact and purpose can help your brand in many ways, from improving customer loyalty to attracting top talent, to ultimately making more sales.
In this blog, we present key reasons why you may want to consider making social impact and purpose a priority for your retail brand.
What is social impact?
In recent years, there has been an increased focus on social impact and its connection to brands.
Social impact is the effect of an organization or individual on the well-being of society. It can be positive or negative, and it can be measured in terms of economic, social, or environmental outcomes.
In the retail industry specifically, social impact is often used interchangeably with terms like “corporate social responsibility” or “sustainability.” While these concepts are related, they each have their own distinct meanings.
Corporate social responsibility generally refers to a company’s efforts to do good beyond its normal business operations, while sustainability focuses on making sure that a company’s practices are socially and environmentally friendly, as well as sustainable in the long run.
What is a Purpose Driven Business?
A purpose-driven company stands for something bigger than its products and services and walks the talk when push comes to shove.
According to Deloitte, “Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.”
79% of business leaders, says PWC, believe that purpose is central to success while affirming that “employees see purpose as a way to bring meaning to their work and understand the contributions they are making to the company, as well as society.”
So we can say that a company that has a clear purpose and that pursues and has positive social impact has a better chance to excel and be more competitive.
Why does your retail business want to prioritize social impact and purpose?
Businesses that prioritize social impact and purpose are not only doing good for the world, but they’re also reaping the benefits for their brand.
When customers see that a business is giving back to the community or working to make a positive difference in the world, they’re more likely to support that brand.
Having a purpose and positive social impact helps retail businesses to:
- Build a more positive reputation and brand image
- Increase customer loyalty, as the Edelman Trust Barometer 2022 reveals 58% of consumers “buy or advocate for brands based on their beliefs and values.”
- Attract and retain top talent, as 60% of employees are increasingly looking for workplaces that have a positive social impact and choose a place to work. based on their beliefs and values.
- Boost investor confidence, as 64% invest based on the company’s beliefs and values.
The benefits of prioritizing social impact for businesses
The Meaningful Brands Study by Havas Media shows 73% of people believe brands must act fast for the good of society and the planet.
The study reveals 53% of consumers are ready to pay more for a brand that takes a stand on environmental and social issues.
In fact, 80 % of consumers would be willing to pay more if a brand raised its prices to be more environmentally and socially responsible, or to pay higher wages to its employees. (Deloitte)
The Power of Purpose-Driven Businesses
Businesses that focus on purpose and social impact tend to be more productive, innovative and have happier employees.
A study by Deloitte reveals purpose oriented companies report “30 % higher levels of innovation and 40 % higher levels of workforce retention than their competitors.”
So, not only is prioritizing social impact, and having a clear purpose is good for the world, but also good for business. Brands that focus on making a difference are seeing real results.
It all starts with WHY!
“People don’t buy what you do, they buy why you do it”, as best selling author and speaker Simon Sinek has shown business leaders around the world. But a lot of brands may wanna pay closer attention.
94% of consumers say purpose is important, yet only 37% believe companies have a clear and strong purpose, according to a Study by Zeno Group.
So if you want your retail business to lead with purpose, starting with Why may be a good idea.
To find your company’s Why you may ask yourselves this questions:
- What is the collective cause or belief your business exists for?
- How does your company serve a better vision of the future?
- What makes your company matter for the world?
- How does your company make a better world?
3 Case studies of businesses that have succeeded by focusing on social impact & Purpose
When it comes to doing good and making a difference, businesses have increasingly focused on social impact in recent years. From sustainability to charitable giving, companies are finding new ways to give back and make a positive impact on the world.
Here are three case studies of businesses that have succeeded by focusing on social impact as well as purpose:
One of the most well-known outdoor apparel brands, Patagonia has always been focused on environmentalism and sustainability. In addition to using sustainable materials and practices, the company also gives 1% of its sales to environmental organizations worldwide, having donated over $100 million dollars.
As a result of its commitment to social responsibility, Patagonia has become a beloved brand with a loyal customer base.
Worthy to mention that in September 2022, founder, billionaire Yvon Chouinard donated his entire company to a specially designed trust to fight climate change.
The three stripes brand based its responsibility structure on 3 complementary pillars: community involvement, employee engagement, corporate giving. Its initiatives bring access to fitness to children between the ages of 5 and 12. Parkinson Woman empowerment Program and SOS Chilldren’s Village, which is one of the largest non-governmental organizations dedicated to supporting children without families in the world.
From 2024, only recycled plastic will be used in their products, and by 2050 all production will be climate-neutral.
This well known retailer from Seattle, during the pandemic, launched Nordstrom Cares increasing clothing donations by nearly 42%, and reduced energy use by 20.3% per square foot over five years and even committed to making 1 million masks for healthcare workers on COVID-19 frontlines.
Nordstrom will meet 6 key environmental sustainability goals by 2025: reduce single use plastic by 50%, use sustainably raw materials in 50% of Nordstrom Made products, extend the life of 250 tons of clothing, ensure 15% of all product is considered sustainable, donate $1 million dollars to support textile recycling innovation and set a science-based target to reduce greenhouse gas emissions and raised over $2 Million Dollars to support homeless youth, and gave $3.6 M to non profits, among other socially responsible initiatives.
CEOs are expected to be the force of change in the world
According to the Edelman Trust Barometer 2022, “84% of people said CEOs should be personally visible when discussing public policy with external stakeholders or work their company has done to benefit society”.
The same study also reveals 60% of people, when considering a job, expect the CEO to speak publicly about controversial social and political issues that concern them.
Worthy to mention that family-owned businesses are the most trusted organizations, so maybe they have a better shot at leading the change we want to see in the world.
Social Impact and Purpose for a Better World
When you focus on making a positive difference in the world, you naturally attract attention and followers.
Consumers are increasingly interested in supporting brands that share their values, so by aligning your brand with a cause, you can improve your bottom line while also making a difference.
There are a number of ways that organizations can increase their social impact. One is by partnering with other organizations that have a similar mission, and now the world needs that more than ever, and your retail business can grow while we make the world a better place.
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