I have a Millennial-aged friend who only wears Toms shoes despite the fact these shoes hurt his feet, cannot be worn in the rain or cold, and fall apart within weeks simply because he strongly believes in its mission of providing shoes to third-world children. Essentially, Toms values and charitable mission override his common sense. And my friend isn't alone is spending his money at companies that do good over ones that offer good products.
Now, the cause-sumption trend isn't new. Companies have long incorporated giving back into their business models long before Warby Parker and Toms made it cool to buy one and give one.
Still, this philanthropic nature is shifting from something that is a good idea to becoming mandatory.
More than eight in 10 Millennials (81%) expect companies to make a public commitment to good corporate citizenship, according to Horizon Media's Finger on the Pulse study. "It used to be that companies would align with charities that shared their same values," says Horizon Media's Kirk Olson, VP of Trend Sights at Horizon Media. "Now brands are taking these do-good values and baking into their corporate identities."
The secret to success is to combine generosity with convenience. "Millennials often use their spending power to express who they are and cause-sumption makes it accessible," says Olson. "It's important to find the connection organically. A great example is P+G's Dawn brand when it learned that its products cleaned up oil spills." Other understandable partnerships include teen retailer Aeropostale's Teens For Jeans initiative, General Mills' Box Top for Education, and ConAgra Foods' Child Hunger Ends Here campaign.
On the other hand, some charitable efforts seemingly limit their appeal. For instance, are middle-aged women the only ones who use Pine-Sol? Apparently so as Pine-Sol 'When Life Gets Tough, Women Rise Above It' movement is aimed at women over 35. “The connection between the brand and the cause has to be clear and believable," says Horizon's Olson. "If it’s not immediately understandable to the consumer, brands risk looking like their [consumer responsibility] effort is more of a marketing tactic than a genuine commitment springing from the brand’s own mission. CAUSE+sumption is about making it fast and easy for the consumer to understand the cause connection, decide, and buy.”
At the same time, this trend extends beyond buying physical products. The Chevy Purple Your Profile campaign allows Facebook users to turn their Facebook pages purple to support cancer awareness and has raised more than $1 million to cancer organizations.
Yet the values that drive generosity is not consistent among generations. There are generational differences in the values that drive this behavior. For Millennials, its personal, reports Horizon Media. Over 70% say they decide to donate to charities based on what they are passionate about. For older generations, it’s about acting locally; 60% of Gen Xer’s, 59% of Boomers, and 54% of the mature population say they choose charities and causes based on what will help better their local community the most.
Still, money trumps time regardless of age. Although 75% of Americans say they engage in some kind of charitable giving in their own life, these people are more likely to donate money or goods rather than volunteer their time to charity.
At the same time, Millennials take a decidedly longer view than previous generations, according to the Intelligence Group's Cassandra Report. When they do buy, they’re likely to make purchases that are only “really necessary” (36%) and that are well researched (72% research online before making an in-store purchase). They also tend to consider resale value of items they buy (44% think about it when considering a big purchase) and prefer brands that allow them to repair, reuse and/or recycle the goods they consume, says the report. “Marketers need to shift their mindset from the traditional ROI model to one based on ‘ROR,’ or Return on Relationship,” says Jamie Gutfreund, Chief Strategy Officer, The Intelligence Group. “In other words, what are you doing to fuel that expression and how are you partnering with each customer or prospect to help them establish their own personal brand?”
Meanwhile, loyalty programs are also undergoing a generational shift. The familiar model of rewarding points for purchases is no longer sufficient to attract Millennials. "The traditional 50-year-old model was designed for the Boomer generation ," says Barry Kirk, VP of Loyalty Strategies at Maritz Motivation. "Then in the 90s, it evolved to talk to customers. It was still points and rewards, but they used targeted emails to reach the right customer."
Now, loyalty programs have entered the 3.0 stage thanks for social media and an always-connected consumer. Indeed, the secret to loyalty programs may be gameification, or making regular tasks resemble challenges to win prizes. Starbucks, for instance, awards stars for buying cups of coffee.
Still, while companies are focused on attracting Millennials, few consider the qualities that make them different from other age groups may also repeal older age groups . As such, Panera Bread's loyalty program initially was designed as a surprise model. Members weren't exactly sure what they had to do in order to win points. There was no buy five sandwiches and get the next one free. This surprise and delight program may have been obscure for some. Panera Bread has recently started to incorporate more traditional loyalty offers, such as email coupons, into its program. "One may argue that Panera Bread was too random for some people, but I argue that it took a stale concept that is highly predictable and turned it completely on its head. And if companies didn't do that, we would still be stuck with the basic points and rewards system," says Kirk.
