Modern consumers are seeking out mission-driven organizations. They are searching for companies that not only offer unique products, but also strive to leave a positive social or environmental impact.
These organizations are especially popular among millennials, and already benefitting from increased customer retention, superior unit economics, and social media-driven marketing.
Rooted in both product and impact, this two-pronged approach is no longer a niche offering. Rather, it critical to new, disruptive companies’ success in a number of industries—tech and apparel included.
In recent years, organizations have gone beyond the TOMS or Warby Parker model of donating a pair of shoes or eyeglassesfor a good cause. Some organizations are actuallymanufacturing products that yield a positive impact. Others takeit a step further by ensuring their business model and overall value chain are beneficial in their respective ecosystems.
Disruptive Companies that Make a Positive Environmental Impact
An ecofriendly clothing company, Reformation designs limited-edition clothes for women. Each piece is made from sustainable fabrics, and the business maintains both its design and manufacturing operations in its own Los Angeles factory. Thisallows the company to release designs in line with the latest fashion trends in just a few weeks.
Not only that, but Reformation requires only six gallons of water to produce. A fast-fashion competitor might take around 200.
And the brand’s environmental impact doesn’t end there. After each purchase, customers receive information on the carbon and water footprints of their Reformation pieces, and shipments include “RefRecycling” labels so consumers can send theirclothes in for repurposing.
Reformation has even worked to lower the environmental impact of its website, as the founder has acknowledged the Internet’s substantial carbon footprint.
What ultimately sets Reformation apart is that the company has gained a following not only for its green footprint, but also for its innovative business model and stylish clothes. While the company swears by green business practices, its business model is extremely lean and efficient, and its tech-infused in-store experiences are second to none. Reformation’s close attention to detail has cemented its reputation as a true next-gen, mission-driven company.
Rothy’s is another next-gen, environmentally-focused brand.When the founders realized there was significant waste associated with traditional shoe manufacturing, they set out to create a fashionable shoe with virtually no waste.
Rothy’s provides direct-to-consumer women’s ballet and pointed-toe flats online, made with an innovative 3D knitting process that uses fibers from an unexpected ingredient: 100% recycled plastic water bottles. The result is a huge reduction in environmental waste.
Over time, plastic water bottles break down into smaller fragments that suck up toxins from the environment and leak them back into waterways and soil. It takes up to 1,000 years for a single water bottle to decompose—and Americans go through approximately 30 million bottles a year.
You do the math.
But Rothy’s has shed light on this pressing issue. In order to manufacture its shoes, the company buys plastic water bottles in bulk from recycling centers around the world. The bottles are hot-washed for sterilization and chipped into flakes, which thenget shaped into little pellets. Once the pellets are heated and drawn into soft filaments of plastic, a blast of air at high pressure causes the threads to tangle and form fuller fibers.
Workers subsequently feed these fibers into a 3D printing machine. The machine uses the fibers to weave shoes that are the right fit, color, and pattern for the specific style the team is working on that day. Changing the style is as easy as completing a software update; and in six minutes, the three main parts of the shoe are complete.
At this point, the workers assemble the shoes before shipping them to the U.S.
It’s worth noting that Rothy’s owns and operates a 65,000-square-foot factory in China that employs approximately 100 workers. The company’s growth is somewhat limited by its modest production capacity. Due to the unorthodox way the shoes are made, the company can’t offload orders to other factories.
It comes as little surprise that Rothy’s struggles to keep up with demand. At its peak, the company’s waitlist has exceeded20,000 aspiring customers.
Disruptive Companies that Make a Positive Social Impact
While Reformation scores well in environmental impact, Markhor boasts a significant social impact. The footwear company delivers handcrafted shoes in five days at half the price of designer brands by leveraging the same craftsmen who make shoes for some of the top European companies.
One of the key issues that Markhor hopes to rectify is that many of its Pakistani craftsmen make handmade shoes for luxury brands, yet most of the funds go to intermediaries who overseedelivery.
By designing its own shoes, purchasing the leather itself, and selling direct-to-consumer online, Markhor is able to pay its craftsmen three to five times more than normal. Many of these shoemakers live off of less than $5 per day—a fraction of the retail price for which most luxury shoes are sold.
For consumers, removing the middleman translates to handmade, designer-quality shoes that cost less than $300 and ship within five days. When you purchase a pair of Markhor shoes, you are immediately looped into the production cycle, and receive periodic updates about the craftsman’s progress. When the shoes arrive, included in the box is a profile of the craftsman responsible for making them, which also indicateshow much he earned in the process.
Markhor has effectively used eCommerce to help reinvigorate the Pakistani shoemaking industry. Further, the leather used in its products comes from animals bred only for meat production.The company has already managed to leave a profound social impact while delivering a high-quality product at a fraction of the cost.