Is TOMS Shoes’ “One for One” Business Model Doomed to Fail?

TOMS Shoes, TOMS, Blake Mycoskie, eco-friendly shoes, sustainable shoes, fashion philanthropy, eco-fashion, sustainable fashion, green fashion, ethical fashion, sustainable style

TOMS’s buy-one-give-one business model is as popular as it is oft-copied. But Cheryl Davenport of Mission Measurement, a strategic consulting firm based in Chicago, wishes the label had more soul. In a recent piece at Fast Co.Exist, Davenport waxes critical about the disconnect between the footwear label’s feel-good mission and its inability to enact measurable social change. Rather, she says, the charitable act of donating a free pair of shoes serves as “little more than a short-term fix in a system in need of long-term, multi-faceted economic development, health, sanitation, and education solutions.”

TOMS Shoes, TOMS, Blake Mycoskie, eco-friendly shoes, sustainable shoes, fashion philanthropy, eco-fashion, sustainable fashion, green fashion, ethical fashion, sustainable style

WHAT’S IN A SHOE?

TOMS made its debut in 2006 after Blake Mycoskie, an entrepreneur from Arlington, TX, witnessed the extreme poverty and health conditions in Argentina’s poorest villages. Noticing the number of children walking around barefoot, Mycoskie decided to reinvent the traditional Argentine alpargata as a means to provide shoes to the world’s neediest. Since then, the company has expanded its line to include eyewear.

Instead of building the economies of developing countries, TOMS succeeds only to make consumers feel morally superior.

But TOMS isn’t designed to build the economies of developing countries, Davenport says. Rather, its goal is to make first-world consumers feel morally superior. “Mr. Mycoskie didn’t ask villagers what they needed most or talk to experts about how to lift villages out of long-term poverty,” she says. “Instead, he built a company that felt good and that was good enough for him and TOMS’s nascent consumers.”

From a business perspective, the company is also vulnerable to what Davenport describes as a “finite and unpredictable market for the feel good value proposition.” In other words, consumers are fickle creatures. With the growing number of brands adopting TOMS’s central paradigm, TOMS will likely fall out of favor without a more distinctive—and less replicable—product offering.

“And therein lies the real peril,” she says. “Those ‘helped’ by TOMS are, in the long-term, no more able to afford shoes or address the real social, economic, and health issues that they face than they were before. Once their free shoes wear out in a couple years, the children TOMS ‘helped’ will be just as susceptible to the health and economic perils associated with bare feet as they were before.”

TOMS Shoes, TOMS, Blake Mycoskie, eco-friendly shoes, sustainable shoes, fashion philanthropy, eco-fashion, sustainable fashion, green fashion, ethical fashion, sustainable style

A BROADER MISSION

TOMS, Davenport says, can do better. She imagines the company creating jobs and building economies by sourcing shoes from local businesses in the countries it seeks to empower. “I imagine a TOMS that eradicates hookworms within an entire country by giving not only the gift of shoes, but also the lasting impact of infrastructure and health facilities,” Davenport adds.

Davenport imagines the company creating jobs and building economies by sourcing shoes from local businesses.

James Poulous, a columnist for Forbes also chimed into the debate. Although he suggests that TOMS may be little more than a “doomed vanity project,” Poulos asserts that the “virtues of charity don’t translate very well from a person-to-person practice to an institution-to-group practice.” These so-called “charity aggregators,” he says, can filter out the soul of charity, which is found in the act of personally, directly, and physically giving gratuitous aid or comfort to another human being.” It’s that human connection that makes TOMS’s mission resonate with such a broad demographic, even more so, perhaps, than a UNICEF or an Oxfam.

Not that exploring any unmet potential isn’t a worthy exercise for a business leader, he adds.”Thinking about the future success of your business as a tool to increase human flourishing is consonant with the basic rules of the free market—and it’s always in fashion.”

One point neither commentator makes, however, is the importance of education in breaking the cycle of poverty. Shoes allow children to go to school or avoid illnesses that might result in extended absences. While aid and trade aren’t mutually exclusive concepts, TOMS’ singularity of purpose might also be its strength.

So is TOMS yielding to calls to step away from its one-for-one model? “We at TOMS welcome all opinions and points of view, and are constantly trying to learn and improve our approach,” Sebastian Fries, the company’s chief giving officer, tells Ecouterre. “That said, we are extremely proud of what we have accomplished through the one-for-one model in such a short amount of time, and remain committed to giving shoes and helping give sight to people in need around the world.”

Looks like TOMS is staying the course, at least for now.

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12 Responses to “Is TOMS Shoes’ “One for One” Business Model Doomed to Fail?”

  1. urbancitygirl says:

    I support TOMS efforts wholeheartedly. Look, every organization can’t do everything for everybody! TOMS give shoes to people who need shoes, period. I buy TOMS shoes over and over again, not because I feel a moral superiority, but because I like the shoes and LOVE the fact that someone else gets a pair, too!

    Keep giving the shoes, TOMS. I’ll keep buying them, too!

  2. chariselliott says:

    This kind of attitude that everything has to be comprehensive and to the root of all social problems is absurd, it completely disregards the fact that all charity models do not have a comprehensive approach and in fact there are very few models out there that can really address the root of the problem, because the root of the problem lies within SAPs and economic development benefiting U.S. and Euro companies while exploiting human labor and raw materials/natural resources. On top of this, development is quite often approached in a way that supports the very systems of governance, econmics, and thought that created the problems to begin with. No, giving away shoes does not solve all social problems, but I bet there have been quite a few, if not a lot of people who have avoided injury, been able to walk longer, or easier to get their water or to school/work because of these shoes. So go to academic hell with your petty critique that denies the celebration that there is a company with ethic, and is trying and denies the large wave of popularity and awarenss of charity that Toms has created among youth in wealthy countries. Shoes wont save the world. Get off of your critical horse to only be pointing a lazy disconected and utopian fingerand and instead try doing something more, lets see how far you get. Where are these utopian models fix all that you didnt cite, and why arent you employing them? I celebrate Toms for trying, and for creating an undeniable awareness and trend. Clothing companies arent going away and I would rather they aim to be charitable and ethical than maintain the standard. Companies have to start somewhere. I started a fair trade organic clothing line out of Mexico in 2008, and since then I have seen a huge awarenss develop in the apparel industry and in part in the U.S. I think that has to do in part with Toms, no they arent doing everything perfect….but coming from someone who has done something, it is so very hard to do everything perfect. Oh, and by the way, did the author of that buy every pair of shoes from a thrift store, or second hand shop? Because if they didnt, they are also direct contributors to the very social problems they are trying to solve.

  3. alenabobana says:

    ‎”Oh, you’re giving people shoes? That’s not enough. How about you also build all the infrastructure the country needs and provide medical assistance and jobs and new homes and education.” … Because doing something good equates not doing enough. Why aren’t these articles written about companies that BUTCHER local economies, wear people to the bone and enslave women and children for pennies. Why don’t they discuss companies that promote cutting down rain forests and tearing flesh off of animals for fur? Funny, really.

    I did read somewhere that Tom’s giving away shoes to a poor neighborhood may put the local shoe-makers out of business. But we’d be hard pressed to find any corporation that cares for the well being of OTHER people more than, or at least equal to, the profits they reap from the consumers. I also know of the eyeglass online store: Warby Parker that has the same business model. It’s amazing to see such companies giving back, while others are jamming all the money they can in their pockets.

  4. Jasmin Malik Chua says:

    @chariselliot @alenabobana: It is patently obvious from your comments that you merely skimmed the article, if you read it at all. We quoted the opinions of two separate people—their thought processes may or may not jibe with our own, but they are thought-provoking, expansive, and worth entertaining. Further, we allowed that TOMS’s singularity of mission may in fact be its greatest strength. You’ll also notice that we reached out to the company’s chief giving officer for comment.

    We’re not saying don’t buy TOMS—by many accounts it’s a great company that makes great shoes—but it’s important to understand what you’re buying, and buying into.

    No issue is black and white. There’s no need for histrionics and name-calling in an otherwise reasoned debate.

  5. Jasmin Malik Chua says:

    And @alenabobana, we do in fact slag off socially and environmentally deplorable companies on a regular basis. You’re new here, I gather?

  6. Jasmin Malik Chua says:

    Further reading for people who are interested in learning more about the controversy surrounding TOMS, including commentary from a missionary in Haiti, who discovered donated TOMS being resold on the open market.

    http://www.okayafrica.com/stories/the-trouble-with-toms/

    http://aidwatchers.com/2010/11/a-tryst-with-toms/

    http://whereamiwearing.com/2011/04/06/toms-shoes/

    http://www.mangine.org/2012/02/one-for-one.html

    Not about TOMS, but salient points about non-monetary donations:

    http://www.time.com/time/world/article/0,8599,1987628,00.html

    http://www.msnbc.msn.com/id/35608836/ns/world_news-americas/t/food-imports-hurt-struggling-haitian-farmers/#.T7428ZlYswK

    Food for thought.

  7. strout says:

    Really… no good deed goes unpunished? Did you notice in all of your fair and balanced condemnation that Toms makes a stylish comfortable shoe at a reasonable price in the marketplace. They will survive if the novelty of being thoughtful wears off, because they make a cool product and I’m cheering for them for what they do!

  8. facon_magazine says:

    At least Toms is trying to do something. What are other footwear companies doing? I always applaud those that put for the effort to make change, big or small. What we should be talking about is who is NOT doing anything!!!!

  9. cliowood (@@cliowood) says:

    Ultimately (although, yes, they do make a stylish shoe) Toms is in the paradigm that all aid faces: where it should sit between the emergency and long-term responders. Although the shoes that they give away are a nice gesture, they are only a short term solution (less than a year and mine are already wearing out) and the company is not equipped to take a long-term view or sustain a long-term presence in the countries that it is trying to help. Perhaps the answer lies in a partnership with a charity on the ground that would take what Toms is offering and utilise the shoes as part of its long-term strategy. Great little article, always nice to have a thought-provoking read.

  10. stewie says:

    Is it good that a shoe company is giving back? Sure. But let’s not kid ourselves – the company is making a *lot* of money off of the press they are getting from it. There is no mention of where the shoes are made or how much they cost. Suppose they cost $4 to make. On a $65 dollar pair of shoes this is about 6% of the sale price of the shoe. Would they still sell as many shoes if they advertised that ‘For every pair of shoes we donate $5 to charity? I would contend that they wouldn’t.

    So what is difficult is determining whether corporate at Tom’s is really interested in helping those in developing countries or if they are merely using this as a clever advertising scheme to sell more shoes. Are they being charitable? Yes, for sure. But there is an extent to which they are selling both a pair of shoes and a feeling of moral superiority.

    All the major corps have charity programs – Walmart, Home Depot, etc etc. Some of this is likely driven by wanting to appear socially responsible, and some of it is driven by tax write-offs, I’m sure. The buy one give one marketing strategy is a very creative one and will probably become more popular as more and more business do it to convince consumers they are being charitable by buying their goods and services.

  11. tomsshoes (@allgreengiant) says:

    I don’t think the TOMS will lead to fail because the power of giving is really “POWER”. There would be millions of people love to share the charity and sure,such a business model might be inspired or copied easily.Until now,I know there is another brand copy this :Bobs shoes.

  12. JessicaD says:

    I applaud this article. I think the point of those being of some of those being interviewed was that Toms really isn’t a solution at all – and that they might actually causing MORE problems by undermining local markets. Providing to community puts a local shoe-makers out of business. You are certainly free to have your own opinions, but I’d encourage people to do some research to with an open mind. If reputable organizations are doing community development are claiming that Tom’s is actually causing more problems than doing good – that is enough for me to start raising some questions and explore other organizations that sell items that support work that is contributing to real solutions.

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