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The Broken "Buy-One, Give-One" Model: 3 Ways To Save Toms Shoes

Toms has built a popular brand around the buy-one, give-one model. But two critical flaws in that model threaten to undo its social impact and business successes.

Today, April 10, thousands of people will go barefoot around the world for the second annual "One Day Without Shoes." It’s an event organized by Toms Shoes—the company that built a brand around the buy-one-give-one charity model—to raise awareness about the impact a pair of shoes can have on a child’s life.

But the day will also shine a light on the Toms model, which is facing two existential flaws that threaten to undo the company’s social impact and business success.

First, the Toms buy-one-give-one model does not actually solve a social problem. Rather, the charitable act of donating a free pair of shoes serves as little more than a short-term fix in a system in need of long-term, multi-faceted economic development, health, sanitation, and education solutions.

"What’s wrong with giving away shoes?" you might be thinking. "At least they’re doing something." The problem, we’ve learned, is when that "something" can do more harm than good. As Time recently noted, an increasing number of foreign aid practitioners and agencies are recognizing that charitable gifts from abroad can distort developing markets and undermine local businesses by creating an entirely unsustainable aid-based economy. By undercutting local prices, Western donations often hurt the farmers, workers, traders, and sellers whose success is critical to lifting entire communities out of poverty. That means every free shoe donated actually works against the long-term development goals of the communities we are trying to help.

The fact is, Toms isn’t designed to build the economies of developing countries. It’s designed to make western consumers feel good. We can see that in the company’s origin story, as the Toms website proudly tells it, in which founder Blake Mycoskie saw the problems barefoot children in Argentina faced and decided to start Toms. Mr. Mycoskie didn’t ask villagers what they needed most or talk to experts about how to lift villages out of long-term poverty. Instead, he built a company that felt good and that was good enough for him and Toms’s nascent consumers.

And that brings me to the second flaw. From a business perspective, Toms is at risk. Our research with leading consumer-facing companies has shown that there is a finite and unpredictable market for the feel good value proposition—consumers are fickle when it comes to committing to brands based on nonfunctional attributes. Toms’s core value to its customers is being replicated by an increasing number of companies who can promise the exact same return: feeling good about your purchase. Without a stronger, more differentiated and less replicable product offering, Toms will likely fall out of fashion in the coming years.

And therein lies the real peril. Those "helped" by Toms are, in the long-term, no more able to afford shoes or address the real social, economic, and health issues that they face than they were before. Once their free shoes wear out in a couple years, the children Toms "helped" will be just as susceptible to the health and economic perils associated with bare feet as they were before.

Toms can do more and do better. In the run-up to "One Day Without Shoes," I challenge the company and its consumers to do three things:

  1. Better understand the problem: The Toms website points out that those without shoes are at risk of contracting hook worms and suffering from other debilitating injuries and diseases. But a new pair of shoes alone will not eradicate hookworm or protect thousands living in landfills from harm. Toms needs to find out what will. There are surely more cost-effective, enduring solutions that will help those in need not only cover their feet, but also be able to afford shoes and other necessities that improve quality of life in the long term.
  2. Create a solution, not a band-aid: Toms has donated more than 1 million shoes to date. But to what end? Rather than asking "How many shoes can we give away?" Toms should be trying to figure out "How many lives can we change?" One statistic cited by the company is that there are 30,000 people living in one landfill in the Philippines. For these individuals and families, a free pair of cloth shoes is nice, but bare feet may be the least of many challenges they face on a day-to-day basis, none of which will be resolved by a pair of Toms. It’s the difference between a quick-fix and a cure.
  3. Innovate business models, not marketing campaigns: The buy-one, give-one model is clever, simple, and consumer-friendly. But the real impact of business often comes behind the scenes and without the sheen of a marketing campaign. Toms should ask: How can we use the whole of our business—including our jobs, our supply chain, our market penetration—to make a difference? I think Oliberté Shoes is really on to something with their approach, in which they manufacture shoes in developing countries and provide an economic boost where it’s needed most.

I imagine a Toms that creates jobs and builds economies by sourcing shoes from developing countries, small businesses, and burgeoning entrepreneurs. I imagine a Toms that eradicates hookworms within an entire country by giving not only the gift of shoes, but also the lasting impact of infrastructure and health facilities.

The world doesn’t need another advocacy day. We don’t need a day without shoes. We need practical, long-term solutions—the kind that only business can engineer. The good people at Toms should keep their shoes on. They’ll need them if they’re going to find solutions to these intractable problems.