Hey, Brands. People Don’t Buy What You Make Anymore

All brands want to be seen making a difference in the world, but what motivates them to take this stance? Is having the appearance of a socially responsible company simply to cut through the noise? Or, are brands generally interested in ethical and environmental business practices?

A factor that could be driving this focus on CSR initiatives is the voices of the up-and-coming generations of socially savvy consumers – millennials who put social responsibility above all else, and who now expect more from their favourite brands.

Making Big Steps in Plastic Shoes

Last year, Adidas teamed up with environmental group Parley for the Oceans in an effort to not only reduce plastic waste from the world’s oceans, but also put that plastic to good use.

According to the brand’s website, the aim is to “Keep plastic out of our oceans and transform it into high-performance sportswear. Spinning the problem into a solution. The threat into thread.” It’s a wonderful example of a brand setting a standard for what responsible business looks like by taking strong steps towards ensuring they make a positive effect on the environment, and going further than simply donating to a charity or cause.

Adidas is already starting to see impact. CEO Kasper Rorsted recently told CNBC that the German sportswear brand sold over 1 million shoes made out of ocean plastic last year – an incredible achievement considering each pair of shoes reuses 11 plastic bottles. The sportswear company has stated it aims to produce five million pairs of Parley footwear in 2018, which would see 55 million plastic bottles transformed into sneakers by the end of the year.

The 1 million-shoe milestone came as Adidas announced fourth quarter earnings that presented 31 percent sales growth in North America. Revenue also grew double digits in nearly every geography the company operates in.

This is huge news for Adidas, at a time where the sneaker market is booming and many brands are vying for the attention of a younger generation of joggers, gym junkies and streetwear aficionados.

But Adidas have even bolder plans.

The Unilever Effect

As WE’s Brands in Motion study discovered, nowadays, consumers expect a company to deliver highly effective, high-functional products and services, as well as be active on issues that are important to their customers. Adidas has managed to seamlessly (pun intended) combine the two together: creating well-designed, highly functional footwear made from environmentally sustainable materials - shoes with soul. That is what we call a social responsibility slam-dunk.

But, what if that was just the start? At the SXSW conference in Austin, attendees heard Eric Liedtke, head of Global Brands for Adidas, declare that the brand wants to produce all of its products — from footwear to apparel— out of recycled plastic from the ocean by 2024.  

That’s a seriously impressive goal, and Liedtke finished it off with some words of wisdom to support why the brand has headed in this direction: “People don't buy what you make, they buy what you stand for.”

At WE, we call this the ‘Unilever Effect’, and it’s one of four realities that we believe businesses can harness for the mutual benefit of its brands and stakeholders.

Brands that recognise and capitalise on social-purpose-driven action see a great opportunity to gain a competitive edge, create a deeper connection and loyalty with customers — and, of course, help contribute to a better future for us all.

For brands like Adidas, Patagonia or Lush, customers aren’t buying more products simply because of the company’s commitment to environmentally sustainable production standards; they buy its products because they see that the company shares their values. 

As Liedtke said, it’s not the product people are buying, they’re buying what the brand stands for. I know he’s right because I’m a millennial that just ordered a pair of Adidas x Parley EQTs. You should, too.

This week, as part of WE’s ‘Day of Giving’ initiative, the WE Hong Kong office will spend the day cleaning rubbish washed ashore on our beaches in partnership with Hong Kong Cleanup – a local education platform that looks to empower Hong Kong citizens to keep the city’s coastal areas, country parks and city streets safe, clean and trash free. Not only is this an opportunity for us to give back to the community, but we also hope to raise awareness and inspire change so that we as an office generate far less trash, and ensure none ends up in our natural ecosystems.