The Rise of Cause Marketing — Past, Present, & Future

EP 05: Special Guest — David J. Katz, Executive Vice President & Chief Marketing Officer of Randa Accessories

O n this episode of The Impact Exchange, we welcome David Katz, Executive Vice President & Chief Marketing Officer of Randa Accessories, one of the world’s largest international apparel and accessories companies. David is a thought leader in the retail industry with over 30 years experience. His education in neuroscience lends a unique, scientific approach to understanding the interactions of physiology, psychology, behavioral economics and consumer response.

As David transitioned from the clinical field of behavior and response, he realized much of what he learned was also applicable to the understanding of consumer needs. Understanding and leveraging consumers’ response and behavior is literally a $71 Billion industry, under the simple term: Marketing. As the world evolves, consumers’ wants and needs change, causing their purchasing behaviors to shift constantly. In turn, every business attempts to respond in ways that lead to consumer purchase, loyalty and success a.k.a profit.

With the recent shift towards conscious consumerism, it may seem that consumer’s social impact awareness has rapidly developed, but David believes the sensitivities had already been established.

“What’s new is the speed and quantity of information that gets dispersed on an increasingly fast and global basis.”

It takes seconds for news to break, so when mishaps occur, people are exposed far more to what happens behind closed doors at companies. Engaged and educated consumers are truly invested in peeling away the layers from brands to find out if they align with those they invest in.

Which brings us to a newer term we are examining today: Cause Marketing. For anyone who may not be too familiar with the term Cause Marketing, Cause Marketing is defined as a type of Corporate Social Responsibility (CSR) in which a company’s promotional campaign has the dual purpose of increasing profitability while bettering society. Or, more colloquially: cause marketing occurs when a company does well by doing good.

Past

As the younger generation’s buying power increases, more brands are magnifying their focus on Millennials and Gen-zers. In the late 90’s and early 00’s the topic of sustainability and human rights became part of the curriculum by mandate in many states. Many of the schools systems had activities built into the curriculum such as Earth Day, volunteering, or a focus on being more responsible citizens.

Add social media to this topic and we’ve seen this increased connectivity amongst those who feel responsible to continue what they learned in their formative years.

“Brands that strongly identify themselves with this form of responsibility have gravity to pull younger people into this awareness and activity.”

Since social responsibility is ingrained into the younger generations, brands that take notice are reaping the rewards of loyal customers who seek fulfillment beyond consumption.

Present

40% of Gen-zers would pay more if a brand supports causes. — Bloomberg Ethical Spending

Although this topic of CSR and sustainability is at heightened levels of social awareness, the dollars spent by consumers and actions spent by brands, in many cases, diverges from the loudness that they speak with. There’s a cognitive dissonance occurring: consumers want to be socially responsible, but their actions and dollars do not always support these words.

“Customers say they want this, but not if they have to pay more for it. So you have to build this [CSR] into your infrastructure and business model.”

It’s clear that people want to help, but the challenge is the immediacy of consumer’s actions is separated from the consequences of their actions. And then there’s the scale of an individual’s actions vs. the scale of your cause or issue. Consumers may feel their actions are insignificant compared to the issues at hand, further distancing their beliefs from their actions.

David explores techniques to stimulate consumers to spend with their dollars and take action that is consistent with their beliefs. Listen to the podcast to find out his techniques to help create response.

Future

86 percent believe the success of a business should be measured in terms of more than just its financial performance — Deloitte

Corporate social responsibility and cause marketing will continue to be a growing and important topic, just as sustainability gains momentum amongst brands. Global issues seem to be developing at a more rapid rate, which means we will perpetually search for new solutions. So let’s discuss the ways to become more focused on CSR.

CSR is woven throughout two parts that vendors and retailers can directly affect:

Front of the House: the product itself as it’s facing the consumer. For example, Stella McCartney, who chooses sustainable materials and refuses to use animal products.

Back of the House: these are the processes that the consumer may not see. You can make them aware of it, but it may not be the product itself. For example, Randa uses skylights, automated lighting systems, and sensor-based ventilation to reduce energy use.

David explains a few of the key things Randa does to help push the needle towards sustainability, so we asked — how do you engage your team and consumers in these back of house strategies?

Find out how David finds success with involving the community, employees and consumers in Randa’s many CSR initiatives, plus his key takeaways to take action today to become a more socially aware brand. Listen here.