Macy's Herald Square in New York City.

From the “ethnic” aisle to exclusionary marketing, beauty retailers have long struggled with achieving an inclusive shopping environment. Now more than ever, consumers are demanding a retail reset.

For years, the retail industry has had a racism problem. Now, it can no longer be avoided. 

In beauty, it has manifested in narrow or padlocked product selections for Black shoppers, few Black-owned brands with broad retail distribution, whitewashed marketing materials and “ethnic hair” aisles that some say are akin to segregation. 

Things are bad, but they are not unsalvageable, according to industry experts who pointed to a variety of diversification and ecosystem rebuilding efforts that need to happen to better support Black-owned businesses and Black beauty consumers.

Not trying, experts agree, is likely to eventually result in the loss of not only Black beauty shoppers, but also the alienation of younger generations who carefully consider brand and retailer ethics before deciding where they want to spend their money. 

In the last few months alone, consumer dollars have shifted toward Black-owned companies as social media and news outlets have moved to highlight different Black-owned beauty companies.

According to Nielsen, Black shoppers spend nearly 19 percent more on personal care, and Black men spend 20 percent more on grooming. Black shoppers will pay more for products consistent with the image they want to present, and are between 24 percent and 63 percent more likely to shop in high-end stores, like Saks, Neiman Marcus and Bloomingdale’s, the company’s research showed. Between 2008 and 2018, Black purchasing power more than doubled, Nielsen said, and according to the U.S. Census, Black consumers make up roughly 13.4 percent of the U.S. population.

Black Purchasing Power in Beauty Infographic

Statistics from Nielsen and American Express show the purchasing power of Black beauty consumers. Information compiled by Emily Burns.  INFOGRAPHICS BY Carlos Monteiro/WWD

That’s where the number came from for Aurora James’ 15 Percent Pledge, which asks retailers to dedicate 15 percent of shelf space to Black-owned brands. Sephora was the first beauty retailer to sign on, with loose plans to support Black beauty founders through its Accelerate program, a six-month business workshop, and potentially provide introductions to the investment community for young brands to access the capital needed to fulfill retail orders. 

That’s the type of thing James said needs to happen for things to really work. Retailers should sign the pledge, she said, but go beyond that by building out ecosystems that help set Black-owned brands up for success.

“We…want to make sure this is done in a sustainable way. Many small brands aren’t prepared to supply enough product that a retailer like Sephora demands. So we are working with retailers to put programs in place that will allow these smaller Black-owned brands to grow in a way that will keep them in business,” James said. “If retailers truly want to diversify their shelves, it’s more than just creating purchase orders.”  

Most of the major beauty retailers in the U.S. have not signed on to the pledge, at least as of press time. All of them, Sephora included, have minimal representation of Black-owned brands on the shelves. An analysis conducted by WWD Beauty Inc shows that for most of them, Black-owned brands make up around or less than 2 percent of the total brand mix. 

Beauty Inc Black-Owned Beauty Brands Retail List

For most major beauty retailers, Black-owned brands make up an extremely small amount of the overall assortment. This list was compiled to show the percentage of Black-owned brands in the online assortments of major beauty retailers.  Lidia Moore/WWD

As of August, Macy’s-owned Bluemercury was leading—about 3 percent of its brand offering are Black-owned businesses. But before August, Bluemercury stocked zero Black-owned brands—it added four as part of a concentrated effort “to ensure their portfolio consists of diverse, founder-led brands,” a company spokesperson said. 

Ron Robinson, a beauty industry veteran and the founder of BeautyStat, which launched with Bluemercury in August, said he has seen more interest from retailers following the civil rights movement’s resurgence in June.

“Bluemercury was clear with us. Though they loved our products, we were being brought in—fast-tracked—because of the movement,” Robinson said. BeautyStat has other major retailers lined up for fall launches, Robinson said, noting that while more subtle, he believes interest picked up as retailers actively sought out more Black-owned brands for their assortments.

BeautyStat’s Vitamin C products—Universal C Skin Refiner, $80, Universal C Eye Protector, $65, and Universal Pro-Bio Moisture Boost Cream, $50—are suitable for all skin tones, Robinson noted. “We’re not a Black-owned brand for people of color only. We’re for everyone. Our star product is named ‘Universal’ for that reason,” he said. 

That Black-owned brands often appeal to broader audiences is a point that Steve Stoute, an advertising and music industry entrepreneur and former investor in hair brand Carol’s Daughter, further illustrated with an anecdote about Gwyneth Paltrow. 

Paltrow, Stoute said, used Carol’s Daughter. “She said to me, ‘Steve, I have really thick and curly hair,’…I have to use heavier products…because none of the products over-the-counter that are marketed to me actually speak to my hair texture,’” Stoute said. 

Historically, Black women have been open to buying products that haven’t been directly marketed to them, Stoute said, and white women are open to doing the same, he noted. 

“Black women, Black people, are out here moving the culture. Why do you think that a young Caucasian girl would want to dress like them, would like to listen to the music they listen to, but not like to use the same fragrance or the same hair products?” Stoute said. “They [major retailers] don’t realize the power of embracing diversity. They never have.” 

Beyond growing Carol’s Daughter from a one-shop operation in Brooklyn to a national hair empire, Stoute also worked to launch many fragrances, including Sean John and Mary J. Blige. He credited a handful of industry visionaries with helping him to succeed in the business—but noted that being able to name six or eight people “who get it” isn’t enough to change a multibillion-dollar global industry. 

Among them was David Suliteanu, the former chief executive officer of Sephora USA who is now ceo at Kendo. When Stoute was looking for broader distribution for Carol’s Daughter after his 2004 investment, he went straight to Suliteanu. 

“I told him, ‘David, an African-American woman walks into a Sephora and there’s nothing for her to buy. There’s no hair products for her, there’s no makeup products for her, why would you do that?’ And he gave us a full bay…78 sku’s or something crazy,” Stoute said. Mindy Grossman, now the ceo of Weight Watchers but formerly the head of HSN, also gave Carol’s Daughter and Stoute’s fragrances a chance—and time—to succeed, he said. 

“Mindy helped us. We weren’t at the level to pick and pack and ship volume at HSN from Day One. We’d send stuff, things would break, it wasn’t packed right—we learned over a period of six months how to get up to code to be best in class to work with them,” Stoute said. 

That type of guidance will be key for retailers looking to back up their Black Lives Matter Instagram statements and donations with action, experts agree.

Retailers need to work to establish an ecosystem that sets Black-owned businesses up for success, and where Black customers can feel welcomed to shop, experts said. 

Suggestions included: Stepping up corporate diversity efforts and genuinely prioritizing diversity across all levels of the business with executive accountability linked to pay or bonuses, educating floor staff across all types of beauty needs so that any employee will be able to help any customer find products that work for their skin, hair and makeup needs, ensuring diverse representation in marketing materials, changing merchandising to group products by hair texture or skin type versus using “ethnic” or “multicultural” labels, and creating systems that connect Black businesses to financing or investment options as the companies grow.

It would be a big departure from historic retailing practices, noted Wendy Liebmann, ceo of WSL Strategic Retail. 

Retail legacy systems—historically built around serving lingering white majorities and growing through opening the same stores with the same merchandise mix over and over again—are not going to cut it anymore, according to Liebmann. It wasn’t until growth became hard to come by that retailers even started to think fully about serving different types of shoppers, Liebmann said. “There was no urgency until one, the population size grew and, two, there was a recognition that [growth] was not so easy to come by,” Liebmann said. 

The mass market has an overtly racist track record of locking up products for textured hair and merchandising certain products for women of color in separate sections. There is a lot of work to do when it comes to modifying these practices, said experts. It was only in June of this year, when the George Floyd protests became a global phenomenon and consumers pressured companies to take action, that Walmart, CVS and Walgreens said they will stop locking up the products in the “multicultural” and “ethnic” beauty aisles.

Several sources contended that designating aisles specifically for “ethnic” or “multicultural” beauty at all is a form of racism.

“You’re talking about a very sensitive thing here, you’re talking about beauty,” Stoute said. “You’re essentially compartmentalizing their beauty.” 

“If you’re a young girl going to shop, and you’re 15 or 16 years old, and you’re hanging out with your white friends and you go into the store to get beauty products because you’re young women messing with makeup, etc., and the young Black girl has to go into a separate aisle—can you imagine her confidence? And what that must mean, and how that must feel? What’s the difference between that and having a separate water fountain, or separate bathroom?” Stoute said. 

People understand that no, you cannot have separate water fountains or bathrooms, he said. “But you put hair products in a separate section, and nobody is running around talking about how racist that is?”

Instead, Stoute suggested merchandising products in alphabetical order. 

Kimberly Smith, cofounder of the Brown Beauty Co-op, said that shoppers are able to find the right products for them by simply reading the language on the packaging. “There are certain products that might say, it’s for curly hair or it’s for coily hair or kinky hair—there are words and terms we know, ‘Oh, OK—I can use this for my hair, this is going to help me detangle’—like detangler—…it doesn’t have to be so blatant.” Buyers should be looking at the different things products do to make sure they have assortments that work across all types of consumers, not just ones with straight or shiny hair, Smith noted. “Look for other things,” she added. 

In beauty, Black-owned businesses are often coming to market with new products that solve for consumer needs. 

“They’re getting into the marketplace to solve for things that are not available. So when you think in terms of retailers and why they should want to have these products on the shelf, it’s because there’s a whole audience out there who’s not being served, and they have the opportunity to serve that audience,” said Cheryl Mayberry-McKissack, the co-owner of Blk/Opl. 

“Black-owned businesses not only showcase needs for 15 percent of the people, but they’re also thinking about what women of color need. For instance, being Indian-American, they have inclusive shades even for me,” said Mousumi Behari, an e-commerce and retail strategy expert at Avionos. 

Beauty Inc Black Women-Owned Business Stats

Black women make up the largest percentage of female-owned business founders after non-minority women, according to American Express. Information compiled by Emily Burns.  INFOGRAPHICS BY Carlos Monteiro/WWD

Bringing in different types of products would help broaden shopper bases, experts said. “I’ve never met one retailer who told me they didn’t want more consumers,” Mayberry-McKissack said. 

It would also give retailers a longer-term way to back up their statements and donations by supporting the Black community, which has endured centuries of economic inequality in the U.S.

“If a Black-owned business comes and says, ‘I have a purchase order from Sephora, I need a loan to manufacture all these things,’ you are putting money back into that Black-owned business as a retailer,” said Behari. “Then, that Black-owned business can go and hire the people they need and give back to the causes they feel strongly about, even if the Targets of the world only donated $10 million to BLM. It starts a trickle-down effect.”

More retail distribution equals more money flowing into Black communities, said Desiree Rogers, owner of Blk/Opl and former social secretary under President Barack Obama.

“One of the key disparities we have in America is this whole income gap between what I am going to call the African-American minority and majorities and whites. The only way to make that up is to create some real wealth,” Rogers said. Blk/Opl has a 70 percent Black workforce, the company said, in response to cover profile Sharon Chuter’s Pull Up for Change campaign.

“We’re a small company, but we’re thinking about everything that we’re doing in a way that hopefully—I’m hoping—I can create some millionaires out of the people that are working with us. Every night I go to bed just hoping, if we’re to be successful and grow with this group that we’re working with, all of these guys are going to do well,” Rogers said.

For more from WWD.com, see: 

Beauty Forced to Confront Racism

Beauty’s Brand-as-Activist Phenomenon

Historically White Beauty Industry Promises to Diversify Workforce

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