TOMS Case Study

A Case Study By: Catie Driza and Lauren Williams

Table of Contents 2 3 5 7 9 10 11 12 17 18 19 20 21 22 23 24 25 26

The TOMS Story Giving Leadership Shoes How TOMS Gives Giving Locations Situation Analysis Planning Communications TOMS’ Evaluation PR Professional Similar Campaigns Our Evaluation Appendix A Appendix B Appendix C Appendix D Appendix E

1

The TOMS Story TOMS was founded in 2006 by Blake Mycoskie, inspired by a trip to Argentina where he saw extreme

poverty and health conditions, as well as children walking without shoes. That’s when he recognized the traditional Argentine alpargata shoe as a simple, yet revolutionary solution. The traditional shoe is normally a casual flat, that usually have a canvas or cotton fabric upper and flexible sole mad of rope or rubber material molded to look like rope. Worn by Argentine farmers for hundreds of years, alpargatas were the inspiration for the classic style of TOMS. Mycoskie quickly set out to reinvent the alpargata for the U.S. market with a simple goal: to show how together, we can create a better tomorrow by taking compassionate action today. To realize this mission, Blake made a commitment to match every pair of TOMS purchased with a new pair given to a child in need. One for One. “I was so overwhelmed by the spirit of the South American people, especially those who had so little,” Mycoskie said. “And I was instantly struck with the desire- the responsibilityto do more.” Mycoskie considered sustainability when creating TOMS, in that by starting a business rather than a charity would help his impact last longer. In Mycoskie’s speech at the Second Annual Clinton Global Initiative, he recalled that children without shoes were not only susceptible to health risks, but were also not allowed to attend school. He noted one particular disease, Podoconiosis (also known as “Mossy Foot”), which is a soiltransmitted diseased caused by walking in silica-rich soil and affects the lymphatic system of the lower legs. The simple solution of shoes, miniaturizes health risks such as this. According to the TOMS Shoes web page, there are over one billion people at risk for soil-transmitted diseases around the world, and a necessity as simple as shoes can help prevent them. Mycoskie not only places an emphasis on giving shoes, but also educating others on the importance of wearing shoes.

2

Giving During its first year in business, TOMS sold 10,000 pairs of shoes. Blake returned to Argentina later

that year with family and friends and gave back to the children who had first inspired him. Thanks to supporters, TOMS gave the One Millionth pair of new shoes to a child in need in September 2010. TOMS now gives in over 20 countries and works with charitable partners in the field who incorporate shoes into their health, education, hygiene, and community development programs.

TOMS’ giving partners are made up of NGOs, charities, and non-profits already established and working in the countries in which TOMS gives. Their expertise guides TOMS to give new shoes responsibly, making sure there aren’t adverse socioeconomic effects, and to ensure that sustainable giving is possible. Giving shoes to the same children on a regular basis is the idea upon which TOMS was started, and is what truly improves the lives of children and their communities.

Shoes and More In addition to the alpargata-inspired Classics, TOMS offers several other styles. Cordones, the TOMS you can wear with or without laces, as well as the Botas, are designed for both men and women. Stitch outs for men, the Wedge and the Wrap Boot for women, and Youth and Tiny TOMS for children are also available, as well as many vegan-friendly styles for all ages that use no animal byproducts. TOMS.com also carries Tees, hats, and accessories that are also matched with a pair of new shoes given to a child in need. One for One.

Awards and Recognition It didn’t take long for the world to notice this new approach to business - In 2007, TOMS was honored with the prestigious People’s Design Award from the Cooper-Hewitt National Design Museum, Smithsonian Institution. Two years later, Blake and TOMS received the 2009 ACE award by Secretary of State Hillary Clinton, which recognizes companies’ commitment to corporate social responsibility, innovation, exemplary practices, and democratic values worldwide. As of September 2010, TOMS has given over 1,000,000 pairs of new shoes to children in need around the world.

A Non-Profit Subsidiary TOMS shoes is a for-profit company which also operates off of a non-profit subsidiary. Mycoskie made TOMS a business rather than a non-profit because he felt he would be able to make a bigger impact, saying, “I started TOMS with about half a million dollars of my own capital. If I would’ve taken half a million dollars and just bought shoes to give to the kids, I would’ve been able to give shoes just once. I never would have been as far reaching and sustainable as TOMS Shoes is now. If you take the option of starting a for-profit business that gives back a large part of what it brings in versus a straight charity, you’re going to help a lot more people with the for-profit business.” Friends of TOMS is a registered 501(c)(3) non-profit affiliate of TOMS Shoes. The organization coordinates volunteer activities and all TOMS shoe drops.

3

4

Leadership Blake Mycoskie Blake Mycoskie is the Founder and Chief Shoe Giver of TOMS, and the man behind the growing One for One movement. As of September 2010, TOMS has given over 1,000,000 pairs of shoes to children in need through giving partners around the world. A dynamic entrepreneur, Mycoskie has successfully started six businesses from the ground up. After being recruited to Southern Methodist University to play tennis, Mycoskie started EZ Laundry, a door-to-door laundry service aimed at fellow college students. The company soon expanded to seven colleges across the Southwest with 40 employees and eight trucks. After selling EZ Laundry to his business partner, Blake traveled to Nashville where inspired by the larger-than-life billbaords in Hollywood, set out to create an outdoor media company aimed at the Music City’s leading country stars. Mycoskie’s renegade efforts soon drew the attention of the industry giant, Clear Channel, who purchased Mycoskie’s remaining billboards in Nashville and Dallas. With two successful companies already under his belt, Blake plunged himself into the world of reality television. Teaming up with his sister, Paige, Blake competed on the second season of CBS’ hit sow, The Amazing Race, coming just four minutes away from the $1 million dollar grand prize. This experience inspired Mycoskie to create Reality 24/7, a cable TV channel dedicated to all-access reality news and programming. Teaming up with Larry Namer, co-founder of the E! Entertainment Network, and Kay Koplovitz, former CEO of the USA Network, Mycoskie raised over $2 million dollars for the project from venture capitalists and former reality stars. The buzz for Reality 24/7 was so great that Rupert Murdoch decided decided to create his own all-reality network, thereby ending Mycoskie’s rogue efforts.

It didn’t take long for the world to notice this new approach to business- in 2007, only a year after its beginning, TOMS was honored with the prestigious People’s Design Award from the Cooper-Hewitt National Design Museum, Smithsonian Institution. And two years after that, TOMS and Blake Mycoskie were the proud recipients of the Secretary of State’s 2009 Award for Corporate Excellence (ACE) presented by Secretary Hillary Rodham Clinton. The award celebrates companies’ commitment to corporate social responsibility, innovation, exemplary practices, and democratic values worldwide. While running TOMS, Blake is a sought-after speaker at campuses and conferences all over the country. He is passionate about inspiring young people to help make tomorrow better, encouraging them to include giving in everything they do, from business practices to day-to-day decisions. His hope is to see a future full of socially minded businesses, and consumers. This unique vision for the future came into focus in 2006, when he witnessed the hardships facing children growing up barefoot in Argentina. He felt a need to help, and the One for One movement was born. He returned the following year with friends and family to hand-place 10,000 pairs of new shoes on children. Blake has always had an entrepreneurial spirit, starting five businesses before TOMS. His first was a successful national campus laundry service, which he later sold. Between business ventures, Blake competed in the CBS primetime series, The Amazing Race. With his sister, Paige, Blake traveled the world and came within minutes of winning the $1 million dollar grand prize.

Now living in Los Angeles, Mycoskie teamed up with the creators of TrafficSchool.com to create DriversEdDirect, a behind-the-wheel training school featuring Hybrid cars and hip instructors. To help promote DriversEdDirect, Blake created Closer Marketing Group - a Santa Monica based marketing firm specializing in brand development and viral marketing.

5

6

Shoes

Shoes

Media Coverage

The Alpargata

TOMS receives a relatively substantial amount of media coverage. With the significant ties to philanthropy, media placement and coverage is not an issue for the non-profit subsidiary. The main concern in media coverage for TOMS is for the central message of the “One for One” movement to be clear, concise and at the forefront of TOMS mission for selling shoes. It can be easily viewed as skepticism to be somewhat of a stunt to link philanthropy to business as a easy means to produce profit. However, the majority of the media coverage portrays the TOMS service goals in a positive light.

Blake Mycoskie was originally inspired by the Argentine  Alpargata shoe, or as Americans refer to it, an espadrill. Espadrills are usually casual, flat, but sometimes high heeled shoes originating from the Pyrenees. They usually have a canvas or cotton upper and a flexible sole made of rope or rubber material molded to look like rope.

Why Shoes? Many children in developing countries grow up barefoot. Whether at play, doing chores or going to school, these children are at risk: A leading cause of disease in developing countries is soil-transmitted diseases, which can penetrate the skin through bare feet. Wearing shoes can help prevent these diseases, and the long-term physical and cognitive harm they cause. Wearing shoes also prevents feet from getting cuts and sores. Not only are these injuries painful, they also are dangerous when wounds become infected. Many times children can’t attend school barefoot because shoes are a required part of their uniform. If they don’t have shoes, they don’t go to school. If they don’t receive an education, they don’t have the opportunity to realize their potential.

7

The “Giving Pair”

The shoe TOMS most commonly gives is the black, unisex canvas slip-on with a sturdy sole. Black shoes are required for school in many countries, and the sturdy sole allows children to run and play with their feet protected. They’ve found that classic TOMS slip-on style works well, because when shoe laces break, many families cannot afford to replace them. In Argentina, they give shoes closer to their colorful classics, as this is the common style there. They give a variety of locally-produced shoes in Ethiopia. Currently, they are working on developing different shoe types, based on feedback from giving partners.

8

How TOMS Gives

Giving Locations Worldwide

Give Sustainably. Give Responsibly: At TOMS, they are committed to creating the biggest im-

pact possible with the shoes they give- improving children’s health and access to education- for the long-term.

Giving Partners: They couldn’t do it without them! They work to establish shoe-giving partnerships

with humanitarian organizations worldwide that have deep experience and a long-term presence in the countries and communities they serve.

Organizations that become Giving Partners work with TOMS to: Identify communities that need shoes :: Together, they find communities that will benefit most from TOMS shoes due to economic, health and educational needs, and where local businesses will not be negatively affected. Giving Shoes that Fit :: Their Giving Partners order the sizes children in their community need. TOMS makes the shoes to order to help ensure children are given new shoes that fit them. Help Their Shoes Have a Bigger Impact :: Children who are given TOMS shoes receive them as part of larger health and education programs run by their Giving Partners. These programs help children get the care and opportunity they need to keep them healthy and in school. Give Children Shoes As They Grow :: Children grow fast! TOMS works to give shoes to children in need throughout their childhood. Once they identify a community that needs shoes, they continue to give to the children in that community to help them stay healthy and in school. Provide Feedback and Help Us Improve :: TOMS relies on its incredible Giving Partners to provide feedback on shoes’ fit and durability, the giving process and the needs of the community- allowing them to continually improve.

Over 20 countries worldwide. “Giving  Shoes  isn’t  instantaneous” Once a shoe is purchased, it takes about 4 to 6 months for their Giving Partners to order shoes and to hand-place them on children’s feet.

9

10

Situation Analysis

Planning

Children in Need

Goal

During Blake Mycoskie’s trip to Argentina in 2006, he was blindsided by the extreme poverty and health conditions, as well as children walking without shoes. Toward the end of his trip, he met an American woman in a cafe who was volunteering with a small group of people on a shoe drive- a new concept to him. She explained that many kids lacked shoes, even in relatively well-developed countries like Argentina, an absence that didn’t just complicate every aspect of their lives but also exposed them to a wide range of diseases. Her organization collected shoes from donors and gave them to kids in need- but ironically the donations that supplied the organization were also its Achilles’ heel. Their complete dependence on donations meant that they had little control over their supply of shoes. And even when donations did come in sufficient quantities, they were often not in the correct sizes, which meant that many of the children were still left barefoot after the shoe drop-offs. This was heartbreaking to Mycoskie.

To maintain or increase sales so that TOMS can give shoes to communities in need and continue to give shoes to those communities as children’s feet grow and require new shoes. TOMS aims to protect the health of children and to give them access to an education so that they have the greatest chance at success and improving their community.

He then spent a few days traveling from village to village, and a few more traveling on his own, witnessing the intense pockets of poverty just outside the bustling capital. It dramatically heightened his awareness. He knew somewhere in the back of his mind that poor children around the world often went barefoot, but for the first time, he saw the real effects of being shoeless: the blisters, the sores, the infection-all the result of the children not being able to protect their young feet from the ground. And thus a company was born.

Objectives Knowledge: To consumers recognize that TOMS gives a pair of shoes to a child in need for each pair of shoes that is purchased. Predisposition: To identify communities that are in need of shoes. Behavior: To maintain current upward sales movement so that TOMS can continue to give shoes to communities in despirate need year after year.

Target Audience Men and women between the ages of 18 and 25. Generation  Y  (also known as the Millennials who were born between the mid 1970s and the mid 1990s)

Messages The message for TOMS Shoes is that if you purchase a pair of shoes, you are helping a child in need because a pair of shoes will be given to them.

Slogan “With  every  pair  you  purchase,  TOMS  will  give  you  a  pair  of  new  shoes   to  a  child  in  need.  One  for  One.”

11

12

Planning

Planning Tactics

Strategy To  cater  to  Generation  Y  by  stressing  the  concept  of  charity Generation Y is a socially conscious bunch: volunteerism went up 25% from 2002 to 2005 and feelings of civic responsibility is the highest in 25 years. Socially conscious brands have seen a steady growth over the last decade, as Generation Y graduates from allowance to income.

To  cater  to  Generation  Y  by  encouraging  participation TOMS, like many modern businesses, has a solid social media following: 894,560 twitter followers, 1,124,202 fans on Facebook and gobs of user-generated content scattered throughout YouTube. However, University of California, Irvine Professor of Political Science Russell Dalton observes that, unlike previous generations, this new one insists on hands-on involvement. Instead of just voting, they prefer to organize a rally, Instead of military service, they’d rather join an association. So, in addition to 24/7 online social media interaction, TOMS’ fans get to participate in an annual One Day Without Shoes movement. An estimated 250 thousand people went shoe-commando last April to understand the plight of shoe-less children.

To  cater  to  Generation  Y  by  valuing  individuality Over 1200 universities have campus clubs dedicated to TOMS shoes. In comparison, how many students spend their free time fawning over brands such as Coca-cola or the Gap? Campus club members come armed with paint brushes and stencils to craft their own individuality on the canvas of plain white shoes.

ONE DAY WITHOUT SHOES WHAT? The day TOMS spreads awareness of the impact a pair of shoes can have on a child’s life by taking off our own. How? Do what you love to do with the people you love to do it with, only on this day, do it without shoes. When people ask you why tell them how shoes are crucial to a better tomorrow. Enthusiastic college students were also responsible for getting the first One Day Without Shoes off the ground in 2008. One Day Without Shoes is the day in April when TOMS asks people to go without shoes to raise awareness of children growing up barefoot and the impact a pair of shoes can have on a child’s life. It’s grown far beyond college campuses, and in only its third year, people of all ages got involved - in 2010, over a quarter of a million people went barefoot and over 1600 barefoot events took place globally. IUPUI was named the top supporter for the national Barefoot Challenge: A Day Without Shoes campaign. Where more than 10,000 university students, employees and other connected to the university pledged to support the April 5, 2011, event, going about their normal campus schedules while barefoot. As consolation for winning the challenge, Mycoskie is scheduled to speak at the university. In addition, the student organizers may be invited on a “Shoe Drop” with TOMS staffers. IUPUI Challenge activities included a Barefoot Walk during which about 100 people marched around the campus as part of the effort to raise awareness about the millions of children worldwide who go barefoot without choice. TOMS even created a new app for the iPhone and Android markets to keep updated with everything needed for an awesome One Day Without Shoes. Users can locate events in their area, listen to One Day Radio, get realtime updates, learn more about the impact shoes have on a child’s life, shop, view a video gallery and more.

“Shoe  Drops”- A unique program where TOMS invites volunteers and other members of the TOMS family to go for about one week to a country where their Giving Partners are giving their shoes. Shoe Drop participants have the powerful experience of hand-placing shoes on children’s feet and engaging with a different and new culture.

TOMS  Campus  Clubs- to spur social entre-

Planning 13

preneurship and hybrid enterprise at colleges. The power of entrepreneurship to change the world is a powerful message to the next generation of leaders, and TOMS is mentoring that energy.

Vagabond  Tour- In early 2009, TOMS launched a Vagabond tour, sponsored by the Dave Matthews Band, that was aimed at inspiring “compassion in action” on campuses nation-wide.

Communications

Communications

Social Media

Web site

TOMS has a strong presence on social media platforms, such as Facebook and Twitter. With nearly one million followers, TOMS has a strong fan base. The feed is frequently up to date with promotions, information, and interaction with its’ followers. The Facebook for TOMS focuses n the giving aspect of the brand and the children associated. Consumers can read about the process of the shoe giving, as well as answer different polls. Consumers can also voice their concerns and comments on the Facebook page. Students link their photos from their Campus Clubs. As well as the most recent promotion of “Movember”-the month long world-wide charity event to raise awareness for men’s health issues. TOMS also features country-specific Facbook pages, for example “TOMS Korea”

The TOMS web site is very modern and interactive. The site is segmented into six major tabs: Women, Men and Youth shoes, TOMS Eyewear, “Our Movement,” and Blog. There is a pleasing balance between the company’s products and the company’s mission. The web site encourages customer participation and features user-submitted content throughout the web site (i.e., when shopping for shoes, customers can view pictures of how other customers wore the particular shoe). TOMS’ web site is extremely tied into social media sites like Facebook, Twitter and MySpace, and has made unique strides in encouraging consumer involvement and inspiring social action. TOMS has done this through a number of tabs titled “Share,” “Screen,” “Host,” “Upload,” and “Register.”

Advertising

 

Share- A simple link that allows you to easily share the TOMS story via sites like Facebook, Twitter,

 

Screen- This link allows you to order a free copy of the TOMS documentary to share with family,

 

Host- The host tab gives you tips and suggestions for fun shoe-decorating parties and gives you the

 

Upload- This link gives you the option of uploading pictures of you and the TOMS flag, you wearing

 

Register- Here, users can register to participate in “One Day Without Shoes.”

AT&T

SoleStyler AT&T joined with TOMS Shoes and the upcoming delivery of its one millionth pair of shoes to a child in need this past September. Through promotion on the AT&T website participants entered for a chance to attend a special One Millionth Shoe Drop with TOMS in Argentina. First, supporters can design their own virtual pair of TOMS Shoes at www.att.net/toms during the AT&T Sole Styler promotion between August 9 and 29. One Sole Styler winner and a guest will be selected at random to attend the one millionth shoe drop in Argentina. Commercial Blake Mycoskie, Chief Shoe Giver of TOMS Shoes, is honored to be featured in an ATT (AT&T) commercial as part of ATT’s latest ad campaign. ATT has “more bars in more places” and the advertisement captures the importance of ATT service for TOMS Shoes. Directed by Bennet Miller, an Academy Award nominee, filming for the commercial began in early February 2009. Using a variety of locations, shooting stretched over several weeks and two continents. The result is a commercial that captures the essence of TOMS.

17

MySpace, Reddit, Tumblr, StumbleUpon, and many other sites.

friends and other groups. The page even gives suggestions on how to get ready for your screening and what to discuss after the screening. option of downloading a party checklist.

your TOMS shoes, different ways that you’ve decorated your shoes or anything else users can come up with.

Blog The TOMS blog is frequently updated with news from across the globe that is relevant to the brand. Whether it be with updates from the TOMS headquarters or pictures sent in from loyal, world-travelling customers, TOMS continues to spread the word of its good works through its blog. TOMS includes information about the Shoe Drops they go on in different countries as well as sections like “TOMS in the Press” and “TOMS Fans Doing Well With Doing Good.”

18

TOMS’ Evaluation Evaluation

PR Professional Opinion Rebecca Masterbone

Since its founding in 2006 by Blake Mycoskie, TOMS Shoes has given away over 1,000,000 pairs of shoes. The TOMS brand has been very successful at inspiring many to do better and and make a real impact on the lives of thousands of people worldwide. TOMS has a very simple one-for-one mission: when you buy a pair of shoes, a pair is donated to a child in need. Some call this “philanthropic capitalism.” TOMS’ business model has also proven to be recession-proof: while most businesses have hacked people and expenses, TOMS is hiring. In an article by Success Magazine, Mycoskie cites two reasons for this phenomenon, saying, “First, consumers are now conscious about where they put their dollars. A product like TOMS that gives to others is appealing to people more than ever. Also, the bigger a company gets, whether its a shoe company or any other corporation, the smaller the margins get because of the gigantic overhead. You manage the business by pennies. But we know everyday that we’re going to give away one pair of shoes for every one we sell, and that’s that. If we cant make the business work that way, the business just doesn’t work. So there’s never a temptation to cut things.” Mycoskie cites TOMS’ continued ability to donate shoes to the fact that giving has been incorporated into their business model from the start, whereas many businesses don’t price giving in to their expenses. It is in this sense that TOMS Shoes has proven successful. Blake Mycoskie’s goal was to create a business that would allow him to not only give shoes, but continue to give shoes to children in need all around the world for as long as TOMS Shoes could survive. TOMS Shoes has not only survived, but it has flourished in a receding economy.

Rebecca Masterbone is an Assistant Account Executive at Lippe Taylor where she works primarily on fashion and health brands. She is responsible for drafting pitches and other brand related materials, conducting daily industry trend research and assisting in executing client events. She has secured placements in top media outlets for David’s Bridal such as The Today Show, Redbook, BRIDES, Get Married, New York Daily News, and Examiner. com. Prior to working at Lippe Taylor, Rebecca interned at DeVries Public Relations where she worked on the Sephora account. Rebecca holds a bachelor’s degree in Public Relations from the Pennsylvania State University. In our interview with Lippe Taylor Asisstant Account Exevutive, Masterbone spoke about the strong presence TOMS has with the younger, “generation Y”, generation and the efforts that could be increased to expand. While TOMS does a great job of marketing to its target audience, Masterbone mentions that many things can be added and other targets to reach by deeply relaying this very powerful message TOMS carries. Masterbone compred it to her experience with working with a client such as David’s Bridal. Both companies have one product focus, and can increase efforts on “expanding upon the obvious”. Possibly adding an intiative, or a new charities; also, getting involved with more communities within the U.S. All these things could expand the companies reach.

About Lippe Taylor:

Lippe Taylor Inc. provides marketing communication, consulting, publicity promotion, and trend forecasting services. It caters to fashion, healthcare, and lifestyle industries. The company’s clientele includes Procter & Gamble, Johnson & Johnson, Sara Lee Corporation, Intimate Brands, and The Andrew Jergens Corporation. Lippe is based in New York City.

18

19

Similar Campaigns Sketchers BOBS Shoes

Our Evaluation Since its founding in 2006 by Blake Mycoskie, TOMS Shoes has given away over 1,000,000 pairs of

BOBS Shoes follows the same business model as TOMS, has a similar one-syllable generic name and even sells identical products . Inspired by the same South American alpargata shoe, BOBS follows TOMS’ practice of donating a pair of shoes to a child in need for each pair of shoes that is purchased. On the Skechers web site, they acknowledge that, while the idea is not original, it is a good idea and one that has the potential to impact so many. They also mimic TOMS’ dedication to sustainability, saying “globally minded down to its earth-friendly packaging, BOBS is designed with comfort, style and care in mind.” BOBS Shoes capitalized on the TOMS Shoes’ proven-as-successful business model and advertising strategy. This, in itself, is a testament to the success of the TOMS campaign. Cause Integration supports the idea of for-profit companies competing to produce a product whereby consumers and third-party social good recipients win. But their lack of addition of any original insight or idea demonstrates Skechers’ desire to capitalize on a proven model rather than act from an ethos of doing good, leaving doubts behind Sketchers’ true social motives in releasing the BOBS Shoes.

Soles4Souls

shoes. The TOMS brand has been very successful at inspiring many to do better and and make a real impact on the lives of thousands of people worldwide. TOMS has a very simple one-for-one mission: when you buy a pair of shoes, a pair is donated to a child in need. TOMS has persuaded consumers to do this despite the look (which may or may not appeal to everyone), price and quality of their shoes. Some call this “philanthropic capitalism.” TOMS has won praise among politicians (Bill Clinton), businesses (AT&T), advertisers (BBDO Worldwide) and digital influences (Digg’s Founder, Kevin Rose even designed a “Digg Shoe”). TOMS’ business model has also proven to be recession-proof: while most businesses have hacked people and expenses, TOMS is hiring. In an article by Success Magazine, Mycoskie cites two reasons for this phenomenon, saying, “First, consumers are now conscious about where they put their dollars. A product like TOMS that gives to others is appealing to people more than ever. Also, the bigger a company gets, whether its a shoe company or any other corporation, your margins get very small because you have the gigantic overhead. You manage the business by pennies. But we know everyday that we’re going to give away one pair of shoes for every one we sell, and that’s that. If we cant make the business work that way, the business just doesn’t work. So there’s never a temptation to cut things.” Mycoskie cites TOMS’ continued ability to donate shoes to the fact that giving has been incorporated into their business model from the start, whereas many businesses don’t price giving in to their expenses.

Celebrities like Sammi Sweetheart are teaming up with Soles4Souls to help deliver shoes around the world. They request a donation of five dollars (the price of a venti frap, as they say) which would halp five people around the world in desperate need of footwear. Their reasons for wanting to give shoes are the same as TOMS’ in that they are motivated by preventing disease. However, they are unlike TOMS in that they have only accumulated $24,506, though this may be attributed to the fact that they are not a business but a charity. Their web site is very simple in that it only gives you the option of donating, reading more about the cause, spreading the word (through simple facebook and twitter sharing tabs)and the option of contacting them. Soles4Souls is nowhere near as well known as the TOMS brand.

kj

20

21

Appendix A …—ˆϐ‹‰’Š‘‡•

Appendix B The Business of Giving: TOMS Shoes

Readers sounded off last week about our story on Blake Mycoskie, founder of TOMS Shoes (“Turmoil for Blake Mycoskie of TOMS,” by Patrick Range McDonald, July 29). The story explained that liberal organizations are miffed that his company uses images of poor people to market its shoes and that Mycoskie is involved with antigay evangelical Christian groups, including a speaking appearance at a Focus on the Family event in Orange County. Mycoskie’s company gives away a free pair of shoes to a child in need for every pair sold, but the shoes are not of equal value. A commenter identified only as “p1970” writes: “The Focus on the Family connection part is disappointing to me, not the shoe donation part. My mother was an ardent follower of Dr. Dobson and Focus on the Family when I came out to her as transgender as a young person. She forced me to attend a reparative therapy program and told me should I ever decide to start hormone treatment, I would not be welcome in her home. “Except for one brief meeting in a public place three years ago, I haven’t seen her or my father face to face in 10 years. This is a shame. I was a sweet kid. If only Focus had spread love, not divisiveness.” P1970 continues: “My thoughts on the shoe part: Altruism is a good thing, whether the person is from the cultural left or the cultural right, and whether the person’s motives are pure or mixed with selfishness. Businesses and nonprofits all seem to exploit the images of suffering people to promote themselves. And although TOMS doesn’t give jobs to its shoe recipients, it does give jobs to people who may desperately need them as well, in China and the U.S. People don’t always come in the packages we expect, and not being the person other people expect is not in itself bad. (No one knows that better than me.)” In reply, a reader identified as “reelzies” writes that p1970 “has great wisdom on Mycoskie sorely missing from this article. And you said, ‘I was a sweet kid,’ which I am sure you were. What impresses me through your writing is that you are a sage and compassionate adult. I’ll bet you’re still a sweetie, too.” Reelzies went on to say that the piece on Mycoskie was littered with “bigotry and ignorance about Christianity,” speculating that it was a “hit piece on Christianity with Mycoskie as the fall guy. My take-away from this article is that Mycoskie helps those in need in his own way.” Reader Aaron W. Matthews writes: “So, it’s not cool to wear shoes if the maker has a different belief than you? Despite the good done by TOMS shoes in giving and helping over a million in need, a person would boycott and slander Mycoskie simply because of a place he spoke? He didn’t become James Dobson’s blood brother, and the altruism (I liked the way p1970 put it) is good regardless of personal conviction. “If Mycoskie is a Christian, I support his efforts toward making the world a better place. I hate the thought of the poor being exploited, but I sure hope there are some happier, healthier people somewhere in the world because they have shoes on their feet. I’ll continue to buy these shoes.”

22

By: Mike Zimmerman

He’d gone there in January 2006 to learn how to play polo— Argentina has some of the best polo farms in the world. But in the backcountry, he saw other things: many poor children, shoeless, and some of the locals wearing simple yet incredibly comfortable farming shoes. So he was sitting on that Argentinean polo farm one day “and that’s where the epiphany happened,” he says. Cool shoes… a style not seen in the States… redesign them, bring them north, and for every pair you sell, give a pair away to one of those shoeless children. TOMS Shoes—and high-profile “philanthropic capitalism”— was born. He has created an entire business model that inspires. “Ultimately, I’m trying to create something that’s going to be here long after I’m gone,” he says. Business has thrived. As the fashion industry and consumers have embraced the many styles of TOMS Shoes, “shoe drops” organized by the company in Argentina, Ethiopia and South Africa have distributed 140,000 pairs of shoes to needy kids. The shoes, priced from $44 to $70 (and $98 for a women’s boot), are the ultimate feel-good purchase. The charitable business model has attracted famous business partners as well (there are now limited-edition Dave Matthews Band shoes, for example). Through all this, Mycoskie maintains a weird double-life. Half his time is spent on the business, meeting with style mavens and fashionistas, working on fresh designs, and getting the word on the street through personal appearances and projects like his ubiquitous AT&T commercial. The other half is spent in desolate countries handing out shoes to smiling kids—the aforementioned “shoe-drops.” The company plans to give away 300,000 shoes in 2009. The Ethiopian drops are of particular interest to Mycoskie. “There are hundreds of thousands of people subject to a significant foot disease called podoconiosis, or ‘podo,’ ” he explains. “A long time ago, Ethiopia had volcanic activity, which left a silicone in the soil that actually goes into your foot skin and causes the lymphatic system to break down. The feet swell badly, almost like an elephantiasis of the feet, and it cripples people—not just physically, but mentally, because they’re seen as lepers and ostracized.” TOMS Shoes helps keep those children’s feet healthy, and healthy kids can attend school. And once they’re in school, a real future takes root—all because of a simple pair of shoes. Another benefit: Mycoskie has played many games of soccer with kids on several continents— sometimes with a bunch of rolled-up plastic bags for a ball. “I’ll motion that I want to play, and next thing I know, I’m either shirts or skins and playing soccer with some of the most passionate players in the world. Soccer is our universal language with the kids.” Read more at http://www.successmagazine.com/the-business-of-giving/PARAMS/article/852

23

Appendix D

Appendix C TOMS Shoes Generation Y Strategy

The Lowly Alpargata Steps Forward

By: Gregory Ferenstein

By: Jenifer Irwin

Generation Y wants it all: to shop, socialize, and save the world all at the same time. TOMS Shoes, the popular shoe company that donates a pair of shoes to needy children for every pair purchased, is showcasing just how much brand enthusiasm young consumers will show for a company with a similar worldview. A standing army of social media activists and over 1200 TOMS university clubs use their online and person networks to broadcast their love of TOMS Shoes. Below are the three pillars of their strategy: charity, participation, and individuality. Charity Generation Y is a socially conscious bunch: volunteerism went up 25% from 2002 to 2005 and feelings of civic responsibility is the highest in 25 years. Socially conscious brands have seen a steady growth over the last decade, as Generation Y graduates from allowance to income. Up until now, consumers’ interaction with corporate charity was a utilitarian calculation. For instance, I can buy a climate change-inducing cheeseburger knowing that a small slice of the profit will go to some needy charity. The nonprofit sector and corporate philanthropy departments are traditionally separated from the profit side of business. “It used to be that it was very mutually exclusive between going into the peace corpse or going into corporate America,” says TOMS founder and CEO, Blake Mycowski. “But, with TOMS, I feel like we’ve combined the two.”

When Blake Mycoskie flew from Los Angeles to Buenos Aires last January, he planned to perfect his polo and learn a little Spanish. The Texas-born entrepreneur could not have known that he also would end up in the footwear business with his polo instructor, Alejo Nitti. The men recreated the alpargata — the canvas shoe that is as Argentine as the tango, prime beef and dulce de leche — as the centerpiece of their company, Toms Shoes. “From a design standpoint, you take the best of the Havaiana and the espadrille, put them together and that is what Toms is,” Mycoskie said by telephone from California. But the venture also has a social conscience. After seeing poor children without shoes in Argentina, Mycoskie came up with a concept: “The idea is for every pair you sell, one pair goes to a child who doesn’t have shoes. It would be providing shoes for tomorrow.” Toms Shoes began production last March in workshops on the outskirts of the city. Mycoskie and Nitti started with the traditional design but added sturdy rubber soles, soft leather insoles and used new fabrics in a burst of color and patterns, with bold stitching.

Blake is not alone: a growing chunk of the economy is responding to increasing demands to integrate charity into product lines. “With cause-integration, positive social change is tied to the profit motive. When 90% of people when given a choice between two otherwise similar brands will choose the one that supports a cause, we have the leverage we need to change the fundamental nature of capitalism,” said Ryan Scott, CEO of Causecast, a leading cause-integrated marketing firm.

Nitti, who heads production operations, said few people in Argentina had believed in their vision to create a quality shoe inspired by the alpargata. “Many people didn’t want to speak with us, because they didn’t understand how it could be done,” he said. Now, sitting in a café in Buenos Aires, Nitti wears a pair of Toms in camouflage fabric, with green patches on the toe and heel.

In addition to Third World shoe drops, TOMS shoes are made from hemp and recycled bottle parts, mandate fair wages and sound labor conditions from oversees manufactures, and even have a line of vegan-friendly shoes.

Over the summer, Toms Shoes sold 10,000 pairs in the United States alone, partly through www.tomsshoes. com and through stores like Scoop in New York and American Rag and Wolf in Los Angeles. The shoes also are sold in Australia, Japan and Canada and online in Argentina; they intend to start selling in Britain this spring, and in Spain this summer. Toms Shoes will open a shop in the hip Palermo Soho neighborhood of Buenos Aires late in the year.

Participation TOMS, like many modern businesses, has a solid social media following: 488,000 twitter follower, 280,000 Facebook fan page, and gobs of user-generated content smattered throughout YouTube. However, University of California, Irvine Professor of Political Science Russell Dalton observes that, unlike previous generations, this new one insists on hands-on involvement. Instead of just voting, they prefer to organize a rally. Instead of military service, they’d rather join an association. Read more at http://www.fastcompany.com/1658289/toms-shoes-generation-y-strategy

24

There are 18 models for men and women, which sell for $38, and a limited-edition shoe hand-painted by the Los Angeles-based artist Tyler Ramsey, selling at $48. This spring there will be another limited edition, designed by Trovata, the 2005 CFDA/Vogue Fashion Fund winners, as well as a Tiny Toms line for children. Read more at http://www.nytimes.com/2007/01/17/style/17iht-rtom.html

25

Appendix E You Make the Call as AT&T Supersizes a Spot About Shoes By Stuart Elliot

At a time when most TV viewers would like to see 30-second commercials become three-second commercials — or maybe even zero-second commercials — a big advertiser is bringing out a 60-second version of its most recent 30-second spot. Viewers who tune in for Fox’s “American Idol” on Tuesday can watch the debut of the 60-second commercial, which promotes the mobile services sold by AT&T. The spot, by the BBDO Worldwide unit of the Omnicom Group, is a longer version of a commercial that started appearing during the second week of April. The longer version was inspired, AT&T executives say, by an outpouring of praise for the commercial, which features a company called Toms Shoes that promises to give to poor children a pair of shoes for each pair it sells. The first, shorter spot shows scenes that include a shoe giveaway in Uruguay; the second, longer spot offers additional video. For those who find a minute not long enough to spend with Toms and its founder, Blake Mycoskie, the 60-second version of the spot will be accompanied by about three minutes worth of “behind the scenes” footage on Facebook and YouTube. “We noticed some traction for the spot almost from the get-go” on both YouTube and Twitter, said Daryl Evans, vice president for consumer advertising and marketing communications at the Atlanta office of AT&T. It is the first time the campaign for AT&T’s mobile unit, which carries the theme “more bars in more places,” has featured a real business, Mr. Evans said. Other spots have been centered on make-believe companies like a small brewery. Toms Shoes, which is based in Santa Monica, Calif., was selected for the campaign through a serendipitous twist. A copywriter for BBDO was watching a report about the company on a video screen in the back seat of a taxicab carrying program content supplied by NBC Universal, Mr. Evans recalled, and it turned out that Mr. Mycoskie “was a longtime AT&T customer.” Mr. Mycoskie, speaking from a shoe giveaway in New Orleans, sounded a bit agog about what has taken place since the commercial shoot in mid-February. Traffic to the Toms Web site, which had totaled around 9,000 visitors a day, is up to 75,000 to 90,000 a day, Mr. Mycoskie said, and “we’ve had to get more server space and more people to answer the phones.” Read more at http://mediadecoder.blogs.nytimes.com/2009/04/28/you-make-the-call-as-att-supersizes-a-spotabout-shoes/

26