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Guide to Growth: Is it important for businesses to have a purpose?

Deloitte’s Retail Trends 2020 report, which outlines the top six retail trends for the coming year, found that an “authentic purpose is now as important as digital to the next generation of customers”.

And as shoppers of all ages become more aware of the impact of their spending, businesses that help consumers “feel good, rather than guilty, will see a surge of engagement”, says former LK Bennett CEO Erica Vilkauls.

Your first step to focusing on this is deciding what purpose means for your brand, she advises: “It can mean that you demonstrate an understanding of the most ambitious role a brand can play in the lives of its customers. Purpose is not about corporate responsibility – it’s about opportunity.”

However, with this opportunity, brands must create an authentic purpose that does not simply hijack cultural or industry trends and movements for a quick buck.

“Recent Deloitte research has said that 46% of customers have already boycotted brands they don’t feel share their values,” Vilkauls tells Drapers. “Plus 76% of customers say they don’t trust brands. Brand trust is becoming an utter requirement.

“Any brand that is not living this purpose authentically through the ways it does business, culture and how it treats customers, [and instead] just uses it as a marketing tool will be found out and, once exposed, it will do immense damage.”

To avoid this, take a comprehensive and detailed approach to change as part of your business planning, rather than looking at purpose as a marketing platform.

“Purpose is one of the most misunderstood and misused buzzwords today,” says Cynthia Bell, strategy consultant at consultancy Propaganda. “A purpose is the role that a business has in the changing world. It goes beyond making profit. It’s how a business seeks to positively impact the environment, society and wider economy. But – and this is important – brand purpose isn’t charity, it’s not a new name for CSR. It’s the ‘why’ of a business, its reason for existence.

“Trust across the UK has flat-lined, and people are more sceptical than ever before, demanding authenticity. Businesses with purpose grow faster, outpacing companies with no purpose by more than 100%. Purpose matters to employees, too. People want to find meaning in their work, so they’re attracted to companies with purpose and are three times more likely to stay there.

“This is particularly important for the socially conscious Generation Z and millennials, but also applies to Generation X and Baby Boomers. Also – the holy grail – people are twice as productive when they are inspired by the company they work for.”.

“Brands that have a sense of purpose are the ones moving in the right direction and building customers more quickly, in a retail climate that is very uncertain and changing,” agrees N Brown interim chief product officer Shailina Parti.

For Parti, brand purpose is intrinsically linked with your understanding of your customer: “It’s all really understanding the kinds of things that the customer wants going forward.”

She references Karen Millen and Coast’s failure to do so resulting in their demise, and the success of brands such as Rixo and Ganni for understanding a niche in the market, with a purpose to deliver designer level dresses without huge price tags.

If you are a brand in search of a purpose, Parti advises: “Take a step back and refocus on why your brand was built, and what made it special. As long as there is a brand identity that is properly relatable, I believe that there is always something you can bring to life about a business.”

Our new advice portal for retailers and brands, Guide to Growth, aims to solve the problems and challenges fashion businesses encounter as they grow. Email your questions to associate editor and we will get them answered. 

Plus, read our Growth in a Changing Economy report here to learn how fast-growth brands and retailers are overcoming barriers to growth. 

Drapers’ Guide to Growth programme is produced in partnership with Clipper.

Dre clipper longform hero

Dre clipper longform hero

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