Retailers Wrap Discounts With Red Ribbons

Big Boston Warm Up/Lands End

Lands' End is offering 20% off new coats in exchange for used winter ones. Target is selling gift coins, with each purchase generating a $2 donation to St. Jude's. And Stop&Shop/Giant is pouring major funding into local food banks.

Such programs are likely to pay off in consumer loyalty, especially from shoppers who want to give this year but can't. "Consumers don't have as much money to donate, and the nonprofit world is certainly feeling that pinch," says Alison DaSilva, EVP/cause branding for Cone Inc., a Boston-based marketing firm that specializes in cause-related marketing. "So if marketers can find a way to combine donations with a product purchase, that's a real win for consumers. Something like the Lands' End program provides a dual incentive: You're going to have to go shopping anyway -- not only will you do something good for someone, you'll also get 20% off your new coat."



To a degree, focusing on poverty is expected -- most retailers launch cause-driven initiatives during the holiday period, and such red-kettle efforts are usually aimed at the neediest. "Giving to the less fortunate will always be part of the holiday season," says Tim Henderson, senior director and consumer strategist for Iconoculture, a trend-spotting company based in Minneapolis. "Consumers want to give back, and they expect retail brands to make that opportunity available to them. But that seems to be especially true this year, because everyone is feeling the recession, and that sense that we're all in this together is still strong."

But since shoppers have less disposable income, they are looking for more practical ways to give, at every level. "The Target gift coins are a perfect example -- I buy something that I can give as a gift, and it generates a donation -- one purchase does double duty," he says.

DaSilva says this back-to-basics branding has been on the rise for the last six months. So far, however, consumers don't seem to have worn out their compassion. "While it's true we've been in the recession a long time, we've got these very high unemployment numbers, and at this point, everybody knows someone -- a friend or family member -- who has been out of work a long time."

The Stop & Shop/Giant Family Foundation, which recently committed to giving $1.5 million to local food causes over the next three years, says that many food banks have seen a 25% increase in demand for services from hungry families, at a time when individual donations are declining by as much as 50%. In addition to this latest gift, the grocery chain believes it will raise more than $1.3 million this year with such consumer-driven programs as Stop & Shop's Food for Friends and Turkey Express, as well as Giant's Good Neighbor Food & Fund Drive, to raise more than $1.3 million in 2009. It's also encouraging product donations from its customers, and last year, collected more than 200,000 pounds of food.

The Lands' End "Big Warm-Up" project, which is based on a Boston initiative, is also getting attention for its innovative technology. Not only do consumers get a discount in return for a used coat, they can track their old coat online right to the point of distribution. They can click around the site to find out precisely how many of the country's 3.5 million homeless live in their area, and even the reasons for their homelessness. (The program is a partnership with the National Coalition for the Homeless.)

Big Boston Warm Up

The Big Boston Warm-up is also generating buzz with a public art installation near the glitzy Prudential Center, featuring 768 life-sized figures -- each representing 10 homeless women, men and kids in Boston.

Overall, marketing spending on such causes is gaining. The Cause-Marketing Forum predicts that U.S. sponsorship spending on cause marketing will hit $1.57 billion in 2009, growing 3.1% this year.

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