NEW YORK – Millennials communicate their value systems through the products they support rather than traditional affiliations such as religion, making a company’s social initiatives and positions all the more important.
During a panel discussion at Fashion-Culture-Design June 9, an executive from Marvin Traub argued that a brand’s corporate social responsibility is one of the ways to create value for shareholders. While not all in agreement, the panelists discussed the ways in which a brand’s values impact its bottom line.
“[Millennials’ coming of age] will change way people actually react to these issues,” said Mortimer Singer, CEO of Marvin Traub Associates. “Today, companies aren’t really being that affected by it, but I think over the next 25 years when this generation of young consumers matures, they are voting with their checkbooks as to whether or not companies should be worthy of their attention.”
Taking a position
The panel attempted to answer the question “Do Companies Have to Stand for Something Beyond Profits?” Speakers could not arrive at a general consensus, perhaps because taking a political stance has elicited varied responses from consumers.
For instance, Land’s End received criticism from pro-life consumers when it chose to post an interview with Gloria Steinem to its Web site. However, Apple’s outspoken support for gay marriage had little impact on its sales.
Mr. Mortimer thinks of political statements as an extension of corporate social responsibility. In his opinion, those who are most successful are those who can communicate not just the what, but the why and how.
Anna Wintour modeling Marc Jacobs’ t-shirt in support of Hillary Clinton
Natacha Minniti, banker at JP Morgan, agreed that brands have a responsibility to communicate values.
One of the greatest impacts of taking responsibility is the acquisition and retention of human capital. In addition to attracting consumers who share viewpoints, employers who treat their workers well, particularly those in the tech world, have less problem keeping their staff within the company.
Sustainability and CSR also do not have to be costly. Rather, a number of brands have found that being more responsible has saved them money.
Hitha Herzog, Fox News and Fox Business contributor, disagreed with her fellow panelists, saying that the number one rationale for buying stock in a particular company is making money. She added that shareholders do not care about a brand’s responsibility as much as they do about its profitability and its impact on their own portfolios.
According to Ms. Herzog, while starting a conversation around issues is commendable, a brand’s success is less about its position and more about innovation of product.
She also pointed out that companies should not try to court millennials alone, as that leaves out many other generations with large spending power.
Sustainable businesses are on trend
Taking a more jaded look at CSR, she looked at brands’ motivations behind sustainable or social initiatives as a move to get a tax break.
Corporate social responsibility may be about relationship building rather than transactions, but that makes it more important for brands, not less, according to Christie’s executive at Luxury Interactive Europe 2015.
The speaker offered a number of tips for brands looking to improve or get started on CSR, offering a number of Christie’s stories as support. In addition to quality craftsmanship and great service, being a luxury brand means using a highly visible and admired position to fulfill moral and ethical responsibilities (see story).
C-suite executives have found that to keep brand value and continue growth, an investment in sustainability performance and practices is a must. Also, given transparency’s importance in the minds of consumers, the way in which brands communicate their positive impact has also grown (see story).
“Millennials care about social issues. They want to know,” Ms. Minniti said. “Think about the impact today, of companies’ communication, but even in the fashion sector, it’s so fast.
“You communicate to your people so many times per day on Instagram or social media,” she said. “Everything you say, everything you do has an impact.
“You have the responsibility of doing that. It’s not a choice anymore. I think you have to do it.”