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CSR at its Best: How Top Brands are Stepping Up
From:
Ad Council Ad Council
For Immediate Release:
Dateline: New York , NY
Monday, February 11, 2019

 
A huddle of individuals with their arms all in the center.

A huddle of individuals with their arms all in the center.
This past year was full of ups and downs, but nothing stood out more than brands taking a stand and making their beliefs known. From athletic wear to retail stores, we’ve seen household names fighting against injustice and demanding change. Corporate social responsibility is no longer an industry buzzword; it’s the reigning power of the land.
But how does taking a stand on a particular issue affect a company’s bottom line? And how do consumers respond to their favorite brands weighing in on social change? We did some research and found five companies who’ve recently made it their mission to make a difference. Read on to see how Nike, Dick’s Sporting Goods, TOMS, Patagonia and CVS changed the business game with their social good efforts and how that ultimately impacted their future earnings… and the country.

Nike

We see a close-up of Colin Kaepernick's face.
What Happened: Colin Kaepernick, who sparked debate by kneeling during the national anthem, created more debate when he became the face of Nike’s 30th anniversary video for “Just Do It.” “Believe in something. Even if it means sacrificing everything,” Kaepernick says. When boycotts occurred after the videos release, Nike took a confident stance, releasing a statement instructing people on “how to burn our products properly.”  
Results: Although the campaign sparked protests among some consumers and the company’s stock price initially dipped, it rebounded eventually reaching an all-time high for the apparel maker. According to CBS, Nike’s stock has soared over the past year, seeing a 5 percent increase since Labor Day – that’s a $6 billion increase in overall value. Sales of jerseys bearing Kaepernick’s name have been among the league’s most popular even though he hasn’t played in two years, and Reuters reported that Nike’s Kaepernick women’s jersey had sold out.
Conclusion: Nike took a calculated risk and it paid off. They knew their audiences and correctly bet that the move would be good for business as well as pushing a social issue forward.

Dick’s Sporting Goods

A Dick's Sporting Good store stands tall against a blue sky.
What Happened: After the shooting in Parkland, Florida, Dick’s Sporting Goods pulled assault rifles from their Field & Stream stores, and said they would no longer sell guns to people under that age of 21. A couple months later, Dick’s Sporting Goods stated that they planned to destroy the assault-style rifles and accessories instead of returning them to manufacturers. Several other retailers followed suit with gun control measures of their own – among them were Walmart, the nation’s largest gun seller; L.L. Bean; and Kroger’s Fred Meyer stores.
Results: Net sales fell 4.5% to $1.86 billion as of September 2018 – a drop that company executives attributed to weak performance in its hunting and electronics category. But that dip could reflect a broader weakness in the world of firearms. After breaking records each of the last three years, the number of background checks conducted by the FBI for gun purchases this Black Friday was down 10% from last year. And keep this in mind, only 10 percent of Dick’s annual $7.9 billion comes from gun sales.
Conclusion: In contrast to Nike, Dick’s bottom line hasn’t rebounded as quickly. But their leadership remains committed to the decision to restrict gun sales and isn’t backing down. They’ve helped inspire more companies to do the same.

TOMS

What Happened: Toms was founded 12 years ago with a plan to donate a pair of shoes for each pair purchased as part of TOM’s “One for One” program. In November, TOMS pledged $5 million to gun violence prevention organizations. Part of the campaign also includes a prompt on the TOMS homepage, which allows visitors to send a postcard to their representatives, asking them to support universal background checks for gun purchases. TOMs CEO Blake Mycoskie conceived of the idea after receiving a call from his wife, who was at their home near where the Thousand Oaks shooting took place. “My wife said, ‘We’re not safe. Somebody’s got to do something,’” he recalled. “It was a pretty emotional moment for us.”
Results: As of early February, 720,000 postcards have been sent to congressional representatives in Washington. Social media response has been generally favorable – lots of talent and celebrities supporting the move including country music stars Florida Georgia Line, Lady Antebellum, and Little Big Town, who own guns but support gun control measures.
Conclusion: TOMS already had a brand purpose, one that was universally supported and didn’t rock the boat. But they decided to take a stand on something much more controversial when they felt personally connected to the issue.

Patagonia

A man stands dressed in Patagonia gear with mountains of snow all around him. Hes hold a sign that says one percent.
What Happened: “Based on recent irresponsible tax cuts, Patagonia will owe less in taxes this year — $10 million less, in fact,” CEO Rose Marcario said via LinkedIn in November. “Instead of putting the money back into our business, we’re responding by putting $10 million back into the planet. Our home planet needs it more than we do.” Marcario argued that since taxes protect the vulnerable and public lands, the U.S. government had given corporations a break “at the expense of the planet.” So Patagonia, which already sets aside a portion of sales to environmental causes through its “1% for the Planet” campaign, donated its $10 million tax cut to environmental groups rather than reinvest it in the company.
Results: It’s too soon for many financial results, but there’s no evidence of any financial blowback. Patagonia is No. 192 in the Internet Retailer 2018 Top 500, and had online sales grow 14% in 2017 over 2016, according to Internet Retailer estimates. Last December, when the brand sued the President’s administration over national monuments in Utah, sales skyrocketed, with revenue 7% higher than the previous week .
Conclusion: Patagonia is incredibly consistent with its messaging and bold with its actions. It has a very strong point of view, one that is infused throughout every aspect of the company and feels authentic and in-line with the company’s mission. It’s built an employee and consumer base that agrees with its values.

CVS

A no smoking sign with .
What Happened: In September of 2014, CVS became the first major pharmacy chain in America to stop selling cigarettes and other tobacco products in its stores. The drug store chain said it was the right thing to do — even though it would hurt sales.
“There’s a whole lot of talk about being a purpose-driven brand,” said Norman de Greve, senior VP, chief marketing officer of the $153.3 billion brand. “But I contend it’s impossible to be a purpose-driven brand unless you are a purpose driven-company — ours is helping people on their path to better health.”
Results: The decision by CVS Health to stop selling cigarettes contributed to a drop in tobacco purchases for all retailers, and smokers who purchased cigarettes exclusively at CVS stores were 38 percent less likely to buy tobacco. Though CVS said tobacco and related sales amounted to a loss of $2 billion in annual sales that existed when it sold cigarettes, the drugstore giant’s overall sales have been up in the last three years thanks to new business from the Affordable Care Act, its growing pharmacy benefit management division and growing medical services businesses. In addition, more than 500,000 people visited CVS’s smoking cessation hub and 260,000 smokers sought advice from its pharmacy on quitting.
Conclusion: Selling cigarettes was discordant with CVS’s overall mission of promoting health, so they put their focus back on wellness. After removing cigarettes, it’s investing in other aspects of the business and doing well financially, and in the minds of their customers.
As you can tell from these examples, brands are currently at a unique inflection point – does my company take a stance on this pivotal issue or do we stick to what we know? How a brand answers this question could determine their success for years to come – but based on what we’ve seen so far, doing good is almost always good for business.
 
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