The Black Consumer And Retail’s CX Progress – Target, Ulta, Amazon And Others

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Of all the beauty retail chains in the U.S., there may be just one that aims to be both Black-owned and serve as a marketplace exclusively for Black-owned brands. And it’s just now opening its flagship store, in Chicago, in April.

It isn’t for lack of consumers. The Black Beauty Collective’s founder, Leslie Roberson, wants to fill the prolonged need for Black-owned beauty products through an entrepreneurial collective of such brands under one roof. Roberson envisions a store in every major city, and the exponential power of the American Black market indicates her vision is 20/20.

The Black population is expected to grow by 22% between 2020 and 2060, according to Nielsen research, while the White (non-Hispanic) population is projected to shrink by 27%. By 2024, spending power among Blacks is expected to reach $1.8 trillion, compared with $971 billion in 2010.

This shift should be reflected on retail shelves. Yet stroll down any store aisle, anywhere, and it’s not likely a shopper will find a selection of products that proportionately reflect the large, lucrative and influential Black market.

This shortfall is not limited to beauty. Efforts like Roberson’s are helping to change that (as might TikTok videos, like this one by Lizzo, shouting out the Black-owned products she uses).

Retailers Are Putting In Their 15%, Or More

Lots of retailers have in recent years implemented in-house programs to add more Black-owned labels to their shelves. Many of these efforts were in reaction to the Black Lives Matter movement.

In 2020, activist and designer Aurora James launched the Fifteen Percent Pledge, a response to the police killing of George Floyd. The project’s aim: To persuade retailers to allocate at least 15% of their shelf space to Black-owned brands, reflecting the percentage of the U.S. population that is Black.

Since then, many retailers joined the pledge, which is a formal contract, or launched similar initiatives. Among these efforts:

Macy’s joined the Fifteen Percent Pledge in 2020 and by March 2022 had quintupled the number of Black-owned products it sells (Bloomberg). Also in 2022, Macy’s invested $30 million in a funding program for underrepresented and diverse-owned businesses. The program, called S.P.U.R. Pathways, will ultimately provide access to $200 million through partnerships.

In 2020, home furnishings chain West Elm, in addition to committing to boost its selection of Black-owned brands to 15%, also pledged to increase its collaborations with Black designers and artists, as well as the number of Black employees in its corporate workforce, to at least 15%.

Target in 2021 committed to investing more than $2 billion in Black-owned businesses by 2025. This includes a goal of doubling the number of Black-owned brands it sells. As of the spring of 2022, Target offered more than 100 Black-owned brands and had increased its investments with Black-owned businesses and suppliers by more than 50%.

In 2021, Walmart directed $2.9 million in new grants to organizations that provide finance and business education to Black business owners, according to Winsight Grocery Business. Walmart’s “Black & Unlimited” microsite is dedicated to Black-founded brands and their founders.

Amazon in 2021 introduced its Black Business Accelerator, a suite of resources, including financing, education and marketing support, for Black-owned businesses that sell on the site. Amazon has committed $150 million, over four years, to help thousands of Black-owned businesses.

Sephora was the first major company to commit to the Fifteen Percent Pledge, reported Glossy magazine. At the time, it counted eight Black-owned brands, which by 2022 it had more than doubled. The beauty chain Ulta, which also joined the Fifteen Percent Pledge, had also more than doubled the number of black-owned brands it carried in 2021, to 28 from 13, CNBC reported.

It’s into this environment that Black Beauty Collective is strutting its stuff, seizing an opportunity that has been unrecognized, or ignored, for too long.

5 Characteristics Of Black Consumer Spending

Catering to the preferences and needs of the Black customer, however, takes more than putting brands on shelves. It takes an investment in the behavioral analytics of a complex, diversified and evolving population.

Here’s what retailers can learn from efforts such as that of the Black Beauty Collective, and others.

  • Black consumers give equal support for support. Of the social causes that influence their purchases, Black shoppers are the most likely to spend with retailers and brands with programs to end racial injustice (56%), promote equality (53%) and reduce food insecurity (53%), Nielsen reports.
  • They want to see themselves in the goods. Black consumers are 162% more likely than the average U.S. consumer to feel good about seeing celebrities that share their ethnic backgrounds, according to a report by Katz Multicultural. Brands and retail destinations can improve representation not just on packaging, but on messaging and signage.
  • They are less brand-committed. Black shoppers are 25% more likely to switch brands than non-Black consumers, McKinsey reports. The findings suggest that the lack of loyalty stems from a sense of neglect and underappreciation.
  • Black consumers are more likely to “smart” shop. Because of disparities in broadband connections and computer availability, Black shoppers are more “mobile first” than the rest of the population, McKinsey finds. This makes them more likely to shop with digital apps, so investments in marketing communications that reflect these buyers would likely be sound ones.
  • And Black consumers buy a lot of non-Black beauty products. Yes, Black shoppers spend a bunch of money on ethnic hair and beauty – an estimated $54 million of $63 million, according to a 2018 Nielsen report. But they also spend more than their population size in overall beauty, including women’s fragrance (22.4% of total spending) and men’s toiletries (20%).

The Black Opportunity Runs Deeper Than Skin Color

The benefits of recognizing the Black market should not be quantified in percentages or dollars, however. It should be valued in what it reaps toward awareness. By proactively inviting Black-owned brands to represent on the shelves, retail leaders are agreeing to a cultural enlightenment.

In short, they’re learning to unlearn their standard practices. Black-owned brands and their creators bring much more than product to the shelf; they bring new thinking. They’re opening doors to a more collaborative, inclusive marketplace; one where everyone counts, equally.

 

This article originally appeared in Forbes.

Jenn McMillen
Jenn McMillen is Founder and Chief Accelerant of Incendio, a firm specializing in customer-facing initiatives, whether it’s marketing or technology. She was the VP of Loyalty and CRM for GameStop & Michaels.