Over the last few years, TOMS (short for Tomorrow's) Shoes have become almost ubiquitous, which is hard to believe when you consider that people are overpaying for these simple canvas shoes by a factor of 2, and they know it. But such is the power of Purpose. Customers are willing to overpay for a pair of minimalist shoes with a very thin sole, because they believe (and see evidence to support their belief) that TOMS is doing something of significant value for others. And TOMS does this. With the overpayment they receive (which might represent potential profit) they make another pair of shoes to give to someone who can't afford them, usually a child in the global south.
That's right, TOMS operates on a "One for One" model. Not exactly a traditional recipe for financial success and growth. In fact, potential investors and traditional CFO's who focus singularly on the variable of profit maximization would have insisted at the beginning that this was a model bound for failure. We can just hear them... "you want to do what?! And you think people will buy your product?!" Yet just a few years after it was merely a hopeful idea hatched by an American traveler, TOMS sold more than 2 million pairs of shoes. Or, technically, I guess they've sold 4 million pairs and given away half that number. All in the midst of "the Great Depression 2.0…" Not only has the company and model achieved scale, but TOMS has become a global movement, a fashion statement, and a call to action, driven mostly by a new kind of customer... one who demands Purpose.
We think the company's success suggests that business is at a tipping point in its evolutionary history. Have a look, because TOMS seems to be a business species of the future coming to live right in our midst. http://www.toms.com/our-movement