Retail

Are shoppers really socially responsible?

Doing the right thing in business
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Doing the right thing in business

In the final hours to fulfill your holiday gift lists you might think consumers aren't focused on being socially responsible in their shopping, but you'd be wrong.

Consumers say they're increasingly searching for ways to shopand givethat reflect their values, whether that means buying local, seeking out products with sustainable packaging or donating to a good cause.

While many say consumers are just paying lip service to good intentions, 55 percent of consumers surveyed across the globe say they will pay extra for products and services from companies committed to positive social and environmental impact, according to a Nielsen survey from June. That number is up from 45 percent in 2011.

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What's more is the steady rise in socially responsible shoppers isn't likely to wane anytime soon because, according to Nielsen, it's the millennials, more so than any other age group, who are willing to shell out more cash for a product that will ease their social conscience.

UncommonGoods is one of the companies reaping those rewards.

"We've grown every year, even through the recession. But as somebody once said to me, sales are ego, profit is intellect, and so what I'm really trying to do with our team and the business is grow the company for the long term," CEO David Bolotsky said.

At least one-third of UncommonGoods’ products are exclusive and handmade in the U.S.
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The Brooklyn, New York-based e-tailer sells responsibly sourced handmade goods from across the globe as part of its promise to deliver unique, premium products, but not necessarily at a premium price.

"We recognize that shoppers want the best price. I would say most customers don't want to pay a premium to shop at a sustainable retailer and we don't want to charge the customer a premium to shop here. We want to charge them a premium for a premium product," Bolotsky said.

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He admits some products from UncommonGoods can be bought cheaper at Amazon or Wal-Mart, like wine glasses or a bowl, but points out it won't be the identical item, which from UncommonGoods will be handcrafted and likely 100 percent made in the U.S.A.

Satisfying the skeptics

The online-only retailer also adheres to B Corp. standards for social and environmental performance as outlined by the B Lab organization. The B Corp. movement has seen its member-businesses grow from 19 founding businesses (including UncommonGoods) in 2007 to nearly 1,200 today in 37 countries.

"With today's skeptical consumer, it's not enough to say you are making a difference, you have to prove it. A third-party certification does just that. B Corps meet the highest standards of social and environmental performance, transparency and accountability," said Katie Kerr, communications director for B Lab.

Kerr said it's still too early in the movement to have strong data on how being a B Corp. impacts sales, but there are numerous reports showing increasing consumer and employee demand for a better way to do business.

"By becoming certified, B Corps stand as leaders in this movement and let everyone know they practice what they preach," Kerr said.

As a B Corp. founding member, UncommonGoods pays its workers more than 70% above the federal minimum wage.
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Big name retailers are also hoping to lift traffic and sales through socially responsible initiatives that allow their customers to give back while they shop.

Target recently partnered with clothing brand Toms to offer a selection of men's and women's shoes and apparel in stores and online. For each item purchased from the Toms collection at Target through March 12, Target will donate the monetary equivalent to either a week of meals, a blanket or a pair of shoes to those in need.

"Our partnership with Toms is the perfect marriage of both brands' core valuesgreat design that is accessible to all and a commitment to giving back," said Target spokeswoman Jessica Carlson. "Our partnership makes it easy for fans of Target and Toms to share in the joy of giving back this holiday season."

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Carlson added that consumers are increasingly looking for ways to benefit communities through their purchases, particularly during the holidays, and the Toms' collaboration was just one of at least four other similar partnerships that have donated well over $30 million to schools and students in need since 2012, in addition to the 5 percent of profits Target donates to the communities it serves, which amounts to roughly $4 million each week.

For its role in giving back, UncommonGoods rolled out its "Better to Give" program for customers in 2001. The program offers consumers a choice of four charities to contribute $1 of the company's profits to at checkout. Even though it's difficult to measure whether such a program results in repeat purchases, Bolotsky is certain it resonates with customers.

"We get a lot of positive feedback from customers, and many of them say, 'Hey, I'm going to come back and shop with you because of that,'" said Bolotsky.

As a result, the company has given more than $1 million to charity since the program started.

Purchase with a purpose

Other retailers are following suit, giving consumers the option to choose a local charity through Sparo, an early stage technology company that helps merchants embed a Sparo button on their website that allows shoppers to choose a charity and contribution amount they want the merchant to donate from their purchase at the time of checkout.

As a start-up, the number of retailers Sparo currently works with is small, but founder and CEO Rob Sobhani said the goal is to give big.

"The vision of Sparo is to create a movement where every purchase online and offline becomes a charitable event—where every purchase has a purpose," said Sobhani.

Sobhani also says the charitable giving function can help retailers with a much needed boost to conversion rates from traffic to sales, citing one retail partner, Citron Clothing, who saw sales increase as much as 40 percent in some months after its charitable giving function was enabled.

But for Bolotsky and UncommonGoods, there are other reasons to be socially responsible and to employ sustainable business practices.

"It's very hard to measure what impact our commitment to sustainability has in terms of repeat customer/customer loyalty—that's not why we do it. We do it because we believe in it. It's the right thing to do," he said.