The TOMS Effect
In 2006, the TOMS shoe company radically disrupted the for-profit business model, literally for good. In challenging what a money-making company could do with its earnings, TOMS incorporated a giving component within its business model, making giving intrinsic to each sale. For every pair of shoes sold, another pair would be given away to a child in need. Giving thus became ‘good business’ at both levels: in making money and in helping kids. The TOMS Effect is a book that explains and explores this phenomenon, through TOMS company history, as well as through major corporations like Walgreens, Walmart, Nestle, Stella Artois, and Michael Kors, as in addition to younger, smaller companies and start-ups like Warby Parker, Brandless, and Not Impossible Labs. TOMS founder Blake Mycoskie was the epitome of counter-culture CEO; his goal to ‘start something that matters’ has been proven in terms of business sense (he is worth $300 million), and has been sustained through product line evolution, and creative marketing, where the shoes become a ‘movement,’ and the customer becomes a ‘partner.’ The TOMS Effect has influenced the behavior of consumers, as well as young entrepreneurs and established corporations. In November 2018, Blake took to late-night shows to publicize TOMS newest giving ventures: End Gun Violence Together (EGVT) and ‘Pick your Style, Pick your Stand.’ These campaigns have been riskier than TOMS’ previous social justice, health, and community efforts. Will this latest iteration of the TOMS model be sustainable, both in terms of monetization of EGVT products, and in effectively causing change?
Elizabeth Ferszt is an Instructor in the English Department and Writing Programs and at the W.P. Carey School of Business at Arizona State University. She also teaches writing in the summer as an LEO Lecturer at the University of Michigan, Ann Arbor. She holds an MA in English from the University of South Carolina, Columbia, and a PhD in English from Wayne State University, Detroit, USA.
“This book is a must-read for any manager aiming to start a corporate social responsibility effort, as well as any entrepreneur seeking to launch a company with social responsibility as part of its mission. Many people are well aware of TOMS, a shoe company that donates a pair of shoes to a needy child for every pair of shoes sold. But why did the TOMS model do so well? How easily can it be adapted by other businesses in other categories? Under what conditions might it fail? To answer these questions, this book takes a deep dive into the TOMS business model. Using a wide range of short and punchy case studies, the author examines exactly what makes the model tick and diagnoses the successes and failures of firms that have applied their own version of the model in a variety of industries and categories. The author also helpfully situates the TOMS business historically, identifying key progenitors whose business models preceded and foreshadowed the TOMS approach. Readers will come away with a clear understanding of how the “one-for-one” business model works, what elements of the model can (and can’t) be adjusted, and how the model can be applied to future business ideas and ventures. [It is a] great book for those interested in understanding the opportunities and tensions that arise when making corporate social responsibility a core element of strategy.”
Associate Professor of Marketing, Northwestern University, USA
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