By Gary J. Nix
- Sephora has pledged that 15% of its retail space will be dedicated to Black businesses
- Black consumers consistently over-index on beauty purchases compared to the general population
Retail is one of the industries being called directly to task regarding the very top of mind subject of diversity, specifically when it comes to suppliers and vendors. Designer, Aurora James, has called for major retailers to pledge 15% of their retail space to Black businesses, and beauty retailer Sephora, owned by European conglomerate Moët Hennessy Louis Vuitton (LVMUY +0.83%) has been the first to lend their support. This could be a big win for the beauty giant, as African Americans have cornered the ethnic hair and beauty market, ringing up $54 million of the $63 million that was spent in 2017.
Why This Matters: In the wake of the ongoing protests, and all of the racist incidents sparking them, many brands have released statements of solidarity with the Black community, that has demanded more than words. James’ appeal for major retailers to commit a minimum percentage of their shelf space to better represent the country’s population, is both equitable and manageable for a first step. Not to mention that diverse representation contributes to the success of Sephora, one of the main growth engines of LVMH’s selective retailing group that saw a 7% growth in 2019.
Diverse representation contributes to the success of Sephora, one of the main growth engines of LVMH’s selective retailing group
The beauty industry in general is a gold mine and expected to reach a market value of $805.61 billion by 2023. Companies like LVMH are constantly mining new ways to get a larger share of the market, with the industry expanding at 3% a year.
Black people are known to contribute revenue at a rate greater than their proportion to their population in the beauty industry, so a lack of action could prove detrimental. It seems as if Sephora, a perceived industry leader has lent real consideration to these facts, and is taking steps to prove that their position of solidarity with the Black community rings true.
Situational Awareness: The most important realization right now is the simple fact that impactful returns in sentiment, brand connection, and referral will be enjoyed in the long-term. Years of what has amounted to lip service in the eyes of the consumer will not be remedied by hollow platitudes and publicity stunts. If the brands who rely on the influence and revenue of our community for their success want to continue to do so, they will have to make the business investments that show their willingness to recognize what this consumer community means to them.
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