An established beauty brand and a startup shoe company took the stage at NRF 2020 Vision: Retail’s Big Show to illustrate how purpose-driven business models can provide the impetus to drive change while achieving commercial, environmental and ethical goals.
In order to stay relevant to consumers, employees and shareholders in an age of rapid change, many businesses are embedding ethical values across an organization as a way to stand out in the marketplace while standing up for causes and issues they believe in.
The Body Shop was built on the “profits with principles” business model. The cosmetics company was founded in Brighton, England, by Anita Roddick in 1976 with a “focus on natural ingredients, simple packaging, helping women to feel better about themselves,” said CEO David Boynton. It quickly became a “platform to amplify causes she cared about around the world,” starting with a 1986 collaboration with Greenpeace for the Save the Whales campaign.
But after The Body Shop was sold to L’Oréal in 2006 and Roddick died in 2007, the company lost its way and its focus, Boynton said. In 2017, Brazilian cosmetics group Natura & Co. bought The Body Shop and the effort to re-establish the company’s purpose began. “Something in our DNA was directing our cause, but we weren’t able to articulate it,” Boynton said. Finally, leadership settled on the purpose statement: “The Body Shop exists to fight for a fairer and more beautiful world.”
Today, The Body Shop is building on that purpose, taking on the challenge of plastic waste by creating a social program to support waste pickers in India through its Community Trade plastic recycling program, and reintroducing refill stations for bath and shower products, with a goal of having stations in half of the company’s 2,500 stores by the end of the year. “It’s the beginning of something really big for us,” Boynton said.
The Body Shop also became a B Certified Corporation, which means it is part of a select group of businesses that meets the highest verified standards of social and environmental performance, transparency and accountability. “The process of finding a purpose doesn’t make life easier,” Boynton said. “[But] it gives you certainty and it can liberate organizational energy in a tremendous way, and we’ve definitely seen that in The Body Shop over the last two years.”
For footwear startup Adelante Shoe Co., the purpose is to “sell connective products and experiences to fund sustainable economic development in Latin America.”
The two-year-old company employs craftsmen in Pastores, Guatemala, who craft made-to-order leather shoes delivered directly to the customer's door in 10 business days. But it’s about much more than the shoes: “We have multiple touchpoints of connection, impact and transparency that create a cobbler-to-customer experience,” said founder and CEO Peter Sacco, including an introduction to the craftsman making the shoes and videos of various stages of the process. “We are connecting our customers with the craftsman, and thus making that impact of that purchase much more personal and relatable.”
More importantly, all of the Adelante craftsman are paid well above the “living well line,” a measurement Sacco and his team created to define the relative cost of living well in Pastores. While the daily market wage is $10.80, Adelante craftsmen’s daily wage is $22.50.
In addition, Sacco said, all stakeholders are satisfied: For the 25 investors who have invested $2 million to date, the company has seen sales grow 2.5 times year-over-year. As for consumers, Adelante has served 10,000 customers over more than two years in business. And for the craftsmen’s families in Guatemala, they’ve gained improved access to healthcare and education. “We’re catapulting these guys out of poverty and into the middle class,” Sacco said, while realizing his long-held dream to create a profitable mission-driven company.