TOMS: Selling and Giving Just Fit

UPDATED: January 17, 2014
PUBLISHED: January 17, 2014

Disruptive businesses, with their innovative actions, inspire others to imitate them. TOMS, a shoe company with a buy-one give-one model, is proof of just that. When entrepreneur Blake Mycoskie created TOMS Shoes in 2006, his plan to donate shoes to impoverished countries was present at the creation. It wasn’t an altruistic addition to the business—it was the business. And it has worked. According to Causecast, a philanthropy-based marketing company, when Gen Y consumers choose between two similar brands (one with a social mission and one without), 90 percent will choose the one with the mission.

That social mission pushes the business forward, and TOMS has a chief giving officer with a staff of 20 to help fulfill it. Its charitable partners include the Africa Outreach Project, World Vision, the Cambodian Children’s Fund and the Eastern Congo Initiative, and there are also clean water and men’s health programs. In a smart move—marketing with a purpose—TOMS offers branded shoe lines such as the Bridge School (for children with severe disabilities) and Discovery: Shark Week (for shark conservation) that allocate $5 per pair to the targeted good cause.

TOMS’ donations give the company a compelling story to tell, like its work with Save the Children’s “Healthy Choices” program in Kentucky and four other states. The company had sold 2 million pairs of shoes by 2012 and has now donated footwear in 60 countries.

One thing is for certain: They know what their people want. You won’t go to TOMS for polished dress shoes to match your tuxedo—the company specializes in casual wear. Some shoes are made of recycled pop bottles, with others being hemp or burlap and some vegan.

TOMS has a huge social media following (including a Twitter feed with more than 1 million followers), but it wants you to do more than click and pay. TOMS organizes an annual One Day Without Shoes event (in April) to give people a sense of a daily reality in many parts of the world; the company has enlisted the Jonas Brothers to help out.

The charitable outreach and comfortable footwear are paying off. TOMS, which is privately held, has an estimated $100 million in annual revenue. If there’s criticism of the company, it’s because TOMS (not a registered nonprofit) doesn’t disclose much information about its operations and also could be seen to be hurting indigenous shoemaking operations in the countries where it operates.

Is TOMS influential? It would seem so. Other brands that combine fashion and charitable giving include Warby Parker (eyeglasses), Lemlem (jobs for garment workers in Ethiopia), L-atitude/Sara Beltran bracelets (children’s health and education in Mexico), ASOS Africa (a sustainable workshop in Kenya), Opening Ceremony bikinis (made in Africa), Rachel Roy earrings (earthquake relief in Haiti) and many more.

If disruption inspires imitation, then TOMS is 100 percent disruptive—and they’re doing it with soul.

Disruptive companies want to transform the status quo. Read how four businesses—Republic Wireless, SolarCity, Keurig and Red Bull—disrupted the market.