Diversity, equity and inclusion (DEI) have become more important than ever in the retail space. According to McKinsey & Company, companies in the top quartile for gender diversity are 25% more likely to outperform the bottom quartile. For the top quartile in ethnic diversity, they are 36% more likely.
This should come as no surprise, as younger consumers’ purchasing power continues to be on the rise. And the younger generation wants our systems to do better. In tandem to adapting to a changing demographic, the retail industry is still reeling from the impact of the pandemic and how to forge a new path forward. This has caused retailers to really look at how to differentiate themselves beyond environmental impact. For example, luxury brands are taking a long look at DEI in terms of supply chain and marketing, too. Or, even more crucial, keeping employees engaged during hard times.
Here are a few examples of how brands in the retail space are incorporating DEI into their business practices.
Race & Retail
About one-third of minority consumers report experiencing discrimination from an advertisement. This number increases inside physical spaces. For example, more than 60% African American shoppers say they have experienced discrimination while inside a retail space. Meanwhile, on the AirBnb platform – helmed by three white founders – African Americans were 16% less likely to get a rental.
Retailers who want to address these types of issues are looking at systemic ways to make change. For example, Tiffany & Co,’s Tiffany Atrium is a social impact hub that garners awareness and resources for historically underrepresented communities.
In an effort to cultivate long-term impact in the jewelry industry, the program includes apprenticeships, scholarships and partnerships that benefit historically underrepresented communities. Tiffany also will be fostering connections between employees, students and non-profits.
The program reflects the jeweler’s longstanding investment in diversity, a recent Essence article pointing to Beyonce’s brand ambassadorship as another example. In its first year in action, the Atrium program is said to have already made significant progress in “[broadening] access and exposure for HBCU students and diverse talents.”
Other examples of DEI in retail include:
- Gap Inc, which in 2020 declared its employee diversity will reflect the actual U.S. population by 2025. In Gap’s 2021 report of its people data, 55% of U.S. workers are people of color and 40% are women of color.
- Sephora and others, which took the “15% pledge” to have that much shelf space dedicated to Black-owned businesses. One year in, Sephora is on-track to double the shelf space of Black-owned products by the end of the year and hit 15% in the hair category.
Adaptive Retail Moves
Wundermand Thompson reports that 75% of consumers say companies and brands must play a role in equity and social justice and 66% are more likely to purchase from a brand that has done so.
As a result of this trend, storytelling is becoming more intersectional and the retail space is becoming more inclusive. These are just some of the trends coming out of what Wundermand considers to be Inclusion’s Next Wave.
Real-world examples cited in the report include advertisements of: a fashion brand featuring a trans model, another promoting an adaptive clothing line, an adaptable laptop, and a body-inclusive swimwear line.
Nike Training Club, which will soon stream their workouts on Netflix, added adaptive fitness classes in 2022. The effort to appeal to all ages and abilities includes classes led by an Nike athlete with limb loss and an adaptive-specialized physical therapist.
The Nike FlyEase line features various adaptive products such as shoes that are easy to remove or slip on, shoes for prosthetics and clothing optimized by children in wheelchairs or child amputees.
In the beauty space, adaptive packaging is changing how products are designed. This includes a toothpaste label for the blind or visually impaired, hair care packaging with read-aloud QR codes and lubricant packaging including braille.
Beyond beauty and clothing, adaptive products are launching in the tech spaces as well. Microsoft leads the way with adaptive gaming products and laptops. Notes a PC Mag writer, “By solving problems that you’d normally ignore, you learn more than you otherwise would.”
Known in aggregate as the Surface Adaptive Kit, Microsoft’s line features a 3D printing-enabled mouse, hub and accessories designed with “inclusivity and accessibility in mind.” Modular mice, for example, allow users to mix and match options for the perfectly ergonomic setup for their specific needs.
Body Inclusivity in Retail
Joining adaptive and gender-neutral clothing, body inclusivity is another way brands are bringing DEI to retail. Whether it’s through fabric choice or the models they feature, intimate brands are approaching inclusivity from multiple angles.
Not only are sizes inclusive, products are made sustainably and developed and modeled by traditionally marginalized communities including people of color and the LGBTQ+. Overlapping with this intersection are adaptive fashion moves – down to carefully-positioned pockets. Layered on top are women’s health-centered features such as leak-proof panties and intimate apparel for post-mastectomy bodies.
It’s in the form of Pepper offering bras for smaller breast types, and Universal Brands re-calibrating their sizing tiers to reflect actual body sizes in the wild (where the median is size 18). It’s lingerie and loungewear created by a breast cancer survivor and committing not to airbrush models in ads.
In a retail space where one-third of U.S. women identify as plus-size, more inclusivity is emerging even in the purchasing process. For example, online Walmart shoppers have the option of choosing which model they want to try on their potential new clothes. Walmart’s acquisition of Zeekit (which powers the virtual model technology) is only a sign of things to come, signaling the importance of knowing how an article of clothing is going to look on you before it arrives at your house.
In the outdoor space, companies like Osprey are making backpacks for bigger bodies. The move has been heralded as a way to remove a critical barrier to participating in outdoor activities like hiking. Key features include extended hip belts and straps and better-positioned pockets.
Retail & Gender
In 2019, women held on average only 26 percent of board seats for retail and consumer companies and made up 14 percent of executives. Meanwhile, gender-fluid and gender-neutral fashion is hitting the mainstream. In California, it will soon be illegal to mark up a price for female-centric products. The retail industry is facing a new set of rules while its leadership lags in its ability to reflect the customers it’s presumed to serve.
Case in point: According to McKinsey & Co., even though women are early adopters of the Metaverse in the luxury retail space, they are still slow to emerge in leadership positions. Meanwhile, men hold 90% of executive positions that will shape the future of the Metaverse’s DEI (or lack thereof). But there is some change in the Middle East, where women in tech are sharply increasing in representation and with strong government support. With the Metaverse industry in this region poised to hit $13 trillion by 2030, what happens here can send ripples throughout the retail tech space.
Meanwhile, gender-fluid clothing has emerged as another reflection of Generation Z’s ever-growing buying power. In addition to in-store and online shopping changing forever, this shift forever impacts how clothes will be designed and marketed. Not limited to runway fashion, we can see this now in everyday fashion. North America, Europe, Japan and South Korea are expected to be the most receptive to these changes.
Regardless of how gendered one’s clothing is, it best not be reflected in the price tag. At least this could be the way of the future if California’s New Pink Tax Law has any long-term influence on the industry as a whole. Under this law, women may expect to save $47 billion annually.
In order to keep up with the times, retail brands must look at all facets of diversity, equity and inclusion and respond promptly and appropriately. From hiring practices to advertising, marketing and your apparel design, an approach to inclusion is essential to resonate with customers.