Is social enterprise the future of retail?

From a pair of shoes to a roll of toilet paper, each purchase has the power to give back to a community in need. A growing number of start-ups have seen success as social enterprises, as people become increasingly keen to shop with a conscience.

In Australia alone, there is an estimated 20,000 social enterprises operating across all industries. These social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide access to employment and training, or help the environment. The latest census from Finding Australia’s Social Enterprise Sector (FASES) revealed the following stats:

  • 73 per cent of social enterprises are small businesses, 23 per cent are medium-sized and 4 per cent are large
  • 68 per cent are in the services sector, of which 24 per cent are in retail and 23 per cent are in healthcare
  • 34 per cent exist to create meaningful employment opportunities for people from a specific group, and 34 per cent exist to develop new solutions to social, cultural, economic and environmental problems.

Combatting crisis

One Australian company working to tackle a problem is Thankyou, which originally launched a line of bottled water in 2008 in response to the World Water Crisis. In July 2013, the company rebranded to offer two new ranges – food and body care – and now stocks 40 products in 5,000 outlets across Australia, including 7 Eleven, Coles and Woolworths.

There are many ways of structuring a social enterprise, including whether the business is non-profit or for-profit. Thankyou takes a holistic approach to combatting poverty, and has chosen to put 100 per cent of its profits towards funding safe water, food, and hygiene and sanitation services around the world.

One for one

Arguably one of the most well-known social enterprises, worldwide, is TOMS. The company uses a ‘one-for-one’ concept business model that sees one new pair of shoes given to an impoverished child for each pair of TOMS shoes sold. The company also branched out into eyewear – for each pair of eyewear sold, a part of the profit goes towards saving or restoring the eyesight of those in need in developing countries.

The company has come under fire over the years; many have questioned whether sending shoes is more effective than giving money directly to the charities working within these underprivileged communities. However, TOMS has continued to grow into a multi-million dollar business, relying on word-of-mouth advocacy for much of its sales. While TOMS has expanded to coffee roasting and a bag collection, its shoes have always been its hallmark product. Australian shoppers can purchase shoes directly from the TOMS website, or they are stocked on Australian eCommerce websites like The Iconic. Ranging in price from AU$75-140 depending on the style of shoe, it’s no wonder shoppers are opting for such a quick and easy way to feel good about a purchase.

Buying from a social enterprise, referred to as social procurement, offers shoppers an easy and effective way to play a part in breaking the cycle of disadvantage and helping those less fortunate in Australia and in developing nations.

Fund for change

For the three founders of Australian social enterprise Who Gives A Crap, a crowdfunding campaign raising $50,000 over 50 hours enabled them to kick off their company. As its tongue-in-cheek name suggests, the company donates 50 per cent of its profits to help build toilets and improve sanitation in the developing world.

While running a social enterprise allows you to create positive change in the world, and hopefully ignite a desire for change in shoppers, success will require as much, if not more, drive and determination than running any other business.

How to run a successful social enterprise

A social enterprise is still a business and needs to be treated that way to be sustainable and successful, so:

  • Align your company’s message with the product
  • Know your strengths and weaknesses; every entrepreneur has a hard-working team surrounding and supporting them
  • Think long-term; success won’t happen overnight and scaling will take time
  • Be ready to work hard; there will be challenges and long hours, just like any new business, but you are working towards positive change and that can help provide you with the tenacity to persevere
  • Make the experience positive for customers; this will help inspire them to continue to carry out change and make value-driven purchase choices
  • Don’t be afraid to call out for support through crowdfunding and social media campaigns. One Thankyou social media campaign was viewed 15.5 million views
  • Give updates on funds raised and even enable people to track the impact of their purchase.

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