How TOMS is Getting it Right

After owning a very durable, comfortable pair of their canvas loafers for over a year now, I can legitimately say I like TOMS' product, not just their mission. And now that the company is opening manufacturing centers in developing countries and using their strong market presence to promote other for-benefit brands, I'm also a fan of the way they do business. In my book, TOMS is getting it right in the ethical fashion world by:

1. Turning criticism into opportunity

TOMS debuted with a simple but novel business model: sell inexpensive canvas shoes and for each pair sold, donate a pair to a child in need. As TOMS' origin story describes, Blake Mycoski came up with this business idea when he traveled through some of the poorest villages in Argentina and noticed that most of the children there weren't wearing shoes. He then redesigned the traditional Argentine alpargata, marketed it to westerners, and in turn provided the world's poorest communities with footwear.

The problem was, the communities being targeted didn't just need shoes -- they needed jobs. Critics like Cheryl Davenport of Mission Measurement argued that TOMS' well-intentioned model was “little more than a short-term fix in a system in need of long-term, multi-faceted economic development, health, sanitation, and education solutions.”  She pointed out that that TOMS’ success was hinged on western consumers’ need to “do good” without really taking the time to understand the needs of developing countries. If TOMS was to have a lasting impact on global poverty, she posed, it needed to invest in the communities it was supporting and provide viable economic opportunities -- to " create a solution, not a band-aid." 

In turn, TOMS focused their efforts on producing shoes in the countries that they support. Currently, they have factories Ethiopia, Kenya, Argentina, and China, with the goal of producing one third of their shoes in the regions where they give them within three years. And in September at the Clinton Global Initiative Annual Meeting in New York City, Mycoskie announced that TOMS will open a manufacturing center in Haiti in January 2014 as a part of an ongoing partnership with the Haiti Artist Collective.

In Haiti, TOMShas made a five-year commitment to produce millions of shoes in a 10,000-square-foot factory in Port-au-Prinace to help foster a "responsible, sustainable" Haitian shoe industry. “By making such a strong commitment and business investment," Mycoskie says, "we hope to inspire other companies in the fashion and footwear industries to follow suit.”

It will be interesting to see what impact such investment has on the economies of these countries. If it does in fact create a significant difference, TOMS can serve as a model for other like-minded companies.

2. Using their influence to grown an industry

Though a combination of excellent marketing, ample press, and probably a good amount of luck, TOMS became a household name in both fringe and mainstream markets.  And with the recent launch of TOMS Marketplace, they are using their influence to promote other brands with similar social purposes.

As of its launch last week, the marketplace features over 200 products from more than 30 companies and charities. Krochet Kids, a knitwear line that provides women in northern Uganda and Peru with a pathway out of poverty, is among the brands available. As a recent New York Times feature reported, TOMS chose which brands to carry based on a number of different for-benefit traits – from the “one for one” model they pioneered to companies like Krochet Kids that help build community infrastructure. As Mycoskie described, the real question was “'does this company really have a mission of improving people’s lives built into its business model?’”

It’s a standard that all ethical companies must be held to. More than being socially conscious, for-benefit companies must have the soul of a charity and the savvy of a for-profit. No easy feat, but I’m excited to see what TOMS and their brethren will accomplish in the coming years.