Challenging The Status Quo & Winning
Ten Thousand Villages is a not-for-profit retailer (I had no idea either until I started my research!) that works with over 100 artisan groups in more than 30 countries in Africa, Asia, and Latin America to bring consumers fair trade jewelry, home décor and gift items. They operate just like any other retailer, but use 100% of their profits to increase purchases from artisan partners and expand its domestic distribution channels. Ten Thousand Villages is growing at more than 20% per year, expects to double sales in the next five years, and recently launched an e-commerce website to support the sales of their retail locations. How is Ten Thousand Villages managing to compete and prosper amongst rising levels of competition, considering that most not-for-profits are assailed for operating inefficiently compared with for-profit firms?
Product Selection: Customers now have a choice between supporting a company’s stock price or a company that ensures third world artisans receive the respect and dignity that comes from working hard and earning fair value for their work. Ten Thousand Villages has isolated and secured a growing segment of the economy that values social integrity from the companies they engage. Although most companies would argue that they live by the same values as Ten Thousand Villages, customers are beginning to see through the ‘smoke and mirrors’ and ultimately challenging companies to do more, as more than a third of consumers find it hard to determine which products are best for society. 83% of consumers claim that a company’s social responsibility is a key consideration before making a purchase (up 4% from last year), and are no longer content with the fact CPG firms and retailers generally contribute no more than 1-2% of pre-tax profits to social initiatives. 63% of consumers have bought fair trade goods in the last year, and Ten Thousand Villages has made product selection the very center of their RVP. Little confusion exists around where the profits go at Ten Thousand Villages, and consumers are showing retailers that they are willing to trade in an entertaining or convenient shopping trip for the opportunity to help those in need.
Education: A persistent challenge for Ten Thousand villages is that many consumers are still unaware of the fact that Ten Thousand Villages is a fair trade retailer, and there the company requires directing their marketing efforts towards education. Currently, Ten Thousand Villages accepts volunteers, rotates fair trade markets around cities and towns without a Ten Thousand Villages, and enlists the help of popular fair trade advocates as guest speakers. Fair trade markets introduce the concept to prospective towns, volunteers garner powerful word of mouth advertising, and guest speakers educate and generate passion within the consumer. Impassioned volunteers trump any loyalty program or traditional form of marketing, so perhaps profit driven retailers should take a lesson from the not-for-profits.
Product Selection: Customers now have a choice between supporting a company’s stock price or a company that ensures third world artisans receive the respect and dignity that comes from working hard and earning fair value for their work. Ten Thousand Villages has isolated and secured a growing segment of the economy that values social integrity from the companies they engage. Although most companies would argue that they live by the same values as Ten Thousand Villages, customers are beginning to see through the ‘smoke and mirrors’ and ultimately challenging companies to do more, as more than a third of consumers find it hard to determine which products are best for society. 83% of consumers claim that a company’s social responsibility is a key consideration before making a purchase (up 4% from last year), and are no longer content with the fact CPG firms and retailers generally contribute no more than 1-2% of pre-tax profits to social initiatives. 63% of consumers have bought fair trade goods in the last year, and Ten Thousand Villages has made product selection the very center of their RVP. Little confusion exists around where the profits go at Ten Thousand Villages, and consumers are showing retailers that they are willing to trade in an entertaining or convenient shopping trip for the opportunity to help those in need.
Education: A persistent challenge for Ten Thousand villages is that many consumers are still unaware of the fact that Ten Thousand Villages is a fair trade retailer, and there the company requires directing their marketing efforts towards education. Currently, Ten Thousand Villages accepts volunteers, rotates fair trade markets around cities and towns without a Ten Thousand Villages, and enlists the help of popular fair trade advocates as guest speakers. Fair trade markets introduce the concept to prospective towns, volunteers garner powerful word of mouth advertising, and guest speakers educate and generate passion within the consumer. Impassioned volunteers trump any loyalty program or traditional form of marketing, so perhaps profit driven retailers should take a lesson from the not-for-profits.
Social integrity is becoming increasingly important to the North American consumer, but retailers are starting to lag behind consumer expectations, which leave them with a teetering and vulnerable customer base. Fair trade retailers, whether for profit or not, are on the rise and may pull the rug from underneath those retailers who fail provide a real benefit to the world.
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posted by Matt Jorgenson at
Thursday, March 20, 2008
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