Why Purpose Is Paramount To Business and Branding Success: A Walmart Case Study
In today’s world, consumers are more informed about engaged with the brands they buy from. This demand for purposeful business is mobilizing companies to invest in building a socially conscious profile and the meaningful social impactful work they need to back it up. In other words, businesses that invest in and share stories about their measurable social contributions increase brand value and carve out a competitive advantage.
Walmart is an interesting case study because it has undergone a transformation of corporate ethos, branding, and reputation management.
Over a decade ago, the global conglomerate was publicly criticized for treating its employees poorly, exploiting impoverished communities in developing countries, and muscling out ‘mom-and-pop’ businesses throughout the US.
Today, the world’s biggest retailer is bringing jobs back to America, investing in employee education and advancement, and actively addressing environmental impact and carbon emissions.
Although the company is still dedicated to its founding principle of providing exceptionally low prices to consumers, the brand has been working tirelessly to build a reputation as a global force for good, “not just for our customers, or even our associates, suppliers, and their families, but also for the people in our communities and around the world that we will never meet,” states the company’s website.
While it feels good to support a company dedicated to building a better world, do consumers actually alter their purchasing decisions because of it? Walmart’s leadership certainly thinks so.
In a recent Harvard Business Review interview, Walmart CEO Doug McMillon explains, “do [consumers] want low prices? Yes. But they also expect us to make decisions that are good for the planet and good for the people that make the products in our supply chain. They want all of that. And the companies that provide it better than others will win.”
Let’s take a look at some of the reasons why purpose is paramount to branding and long-term profitability through the lens of Walmart:
It enhances reputation: People want to support companies that they think are making a positive impact on the planet. In fact, the recent Cone Communications studyfound that nearly 90% of people would support a company that’s aligned with their values, and over 75% would boycott brands that exhibit practices contrary to their beliefs.
It follows that purpose shapes brand reputation. And Walmart is investing millions of dollars into reshaping their image after years of backlash over underpaying employees and poor corporate culture.
This year, the retail giant invested over 18 million in advertising to showcase their strides in an improved internal culture and exceptional advancement opportunities for employees. The ads two-pronged approach focuses on stories of individual employees’ happiness within the Walmart community, as well as a behind-the-scenes look into their American factories, providing exposure to their dedication to both fair compensation and domestic production. What’s more, the company backed up their messaging by investing $2.7 billion in increased wages and $250 billion to boosting U.S. sourcing and manufacturing.
The key takeaway is that purpose is essential to the way stakeholders view your brand. Investing in positive impact within the communities you touch is an excellent way to strengthen brand image.
It improves employee engagement: Happy employees make happy customers and happy customers buy more products and demonstrate greater loyalty.
Employees that see opportunities for advancement, are made to feel appreciated and fairly compensation, and believe that their work makes a difference in the world are more loyal and are more productive. Building purpose-driven internal communities is also a great way to attract and retain top talent.
Part of Walmart’s actionable plan toward improved working conditions and internal culture is through their Walmart Academy. The Walmart Academy is a training program that offers employees an opportunity to build skills that promote advancement within the company. According to CEO McMillon, the idea behind the program is that, “you have to set the bottom rung, that place where workers get started, at the right level…you have to space the rungs appropriately, with the right kind of support, so that people can climb as high as they want to go.”
Walmart’s dedication to training and advancement has translated into increased employee satisfaction, and a subsequent improvement in customer service.
The lesson here is that weaving the ethos of purpose within the company is essential to building top-performing teams and a strong corporate culture.
It reduces costs in the long run: Skeptics argue that investing money in improving working conditions, reducing carbon emissions, and sustainable, local sourcing of products makes it harder for socially conscious businesses to compete against other corporations who are cutting corners and doing the bare minimum to meet consumer demand.
Walmart has been investing in making their entire operation more sustainable — from on-site electricity use, to supply chain sourcing, to logistics — sustainability is now a fundamental part of the Walmart brand and ethos, driving business success. According to McMillon, “putting in LED lighting has turned out to have a better ROI than the alternative and the next new technology probably will, too. It might be that the payback period is longer, and you have to have the right time horizon in mind,” but this investment has been worthwhile. Ultimately, McMillon affirms that sustainability is ”good for business…our customers want us to do these things.”
Walmart’s example showcases that when businesses invest in purpose, they end up getting back more than they give in the long run. These payouts not only save money on necessary expenses like electricity and transportation, but also build consumer goodwill and increased sales.
Purpose is more than a buzzword. It’s paramount to business and branding success. Companies that truly invest in their internal corporate culture, environmental impact, and social influence are succeeding in today’s markets today and leading the way to improve business and the planet tomorrow.