It has been a tumultuous year for the retail industry.
COVID-19’s unpredictable stay-at-home lockdowns have significantly reduced opportunities for in-store experiences and accelerated the convenience and safety of online shopping.
While retail-industry forecasters are scrambling to predict the future of in-store shopping, in the coming months they must also evaluate the effects of 2020’s other endemic: racial bias in retail.
This past June, George Floyd’s murder in Minnesota added to the long list of Black men and women who died as a result of bias and racial profiling, and put the spotlight on America’s long history of systemic racism. The protests that followed in support of Black lives proved eye-opening to many Americans, but to underrepresented groups who remain at the margins, the idea of racial inequalities was nothing new.
In fact, within the retail in-store experience, bias and racial profiling have disproportionately impacted people of color for generations. Continuing to ignore racial bias in retail is a big (and costly) mistake.
Diversity Best Practices is proud to partner with member organization Sephora, the U.S. beauty retail giant owned by LVMH Moët Hennessy Louis Vuitton. In 2020, Sephora conducted the first-ever national research study in the United States focused on racially biased and unfair treatment in retail settings.
Sephora’s main objective was to examine the causes and instances of bias among U.S. shoppers in retail and to inspire a call to action among its industry peers.
The study, released on January 13, and conducted by Dr. Cassi Pittman Claytor and Dr. David Crockett, leading scholars of retail racism, reveals that racially biased and exclusionary treatment (RBET) is more prominent for BIPOC (For the purposes of this study the term BIPOC used throughout captured US shoppers surveyed of self-identified Hispanic, Asian/ or pacific islander, includes east and south Asian, and African American and other. Other in this research group consists of middle eastern, American Indian, Alaska native or those that select “prefer not to say.”) shoppers who have disproportionately personally experienced and/or witnessed or heard about unfair treatment based on their ethnicity/skin color in stores.
Looking at the consumers’ journey of the in-store experience, the study was organized by evaluating perceptions upon entering the store, treatment received while shopping, and the post-shopping, in-store experience.
Perceptions Entering the Store: At this point in the consumers’ journey, the study provides evidence that retailers have not taken advantage of opportunities to attract diverse shoppers. There are marketing limitations and a lack of a diverse assortment of products available to meet the needs of different preferences, unique styles and various consumer tastes.
BIPOC US retail shoppers who participated in the study believe they are judged first by their skin color and ethnicity even before neutral indicators such as age, body weight, size, attractiveness and attire.
Unfair Treatment During the In-Store Experience: The browsing phase in the consumers’ journey produces higher likelihood of RBET even while BIPOC shoppers report utilizing different coping mechanisms to help them navigate through this experience. The study showcases that BIPOC US retail shoppers navigate the in-store experience by leveraging different coping mechanisms that are preventative (i.e., dressing nicely) or reactive (i.e., adjusting body language by keeping hands out of pockets) to deal with racial bias and unfair treatment.
This continuously proves to not be enough as the instances of racial bias can lead to bottom-line impacts for retailers.
Actions for Post-In-Store Experience: Upon experiencing RBET, the study finds that there are limited opportunities for the retailer to win back the customer; 70 percent of US shoppers will react passively by leaving the store without addressing the unfair treatment to avoid conflict and stress in the moment.
After experiencing racial bias, the study also finds that 3 out of 5 US retail shoppers will not shop at that specific location again, while 1 out of 2 will not shop at any of the retailer’s store locations in the future.
The collective call to action based on this study’s findings will provide an opportunity for retailers to build further proactive measures to remediate RBET consumer complaints, along with a more robust communication strategy to highlight actions taken and reinforce company and customer values.
The Bottom Line: In 2019, IHL Group reported that there were more companies opening stores: For every retail company that closed stores, five retail companies opened stores.
More recently, in 2020, the National Retail Federation stated that of the top 50 online retailers, nearly all operate brick and mortar stores, and as an industry, online sales surprisingly make up only 10 percent of all retail sales.
Finally, Forbes reported that consumers spend significantly more per visit in-store than online because shoppers crave that visceral experience of browsing and purchasing.
The Journal of Consumer Psychology reports that impulse shopping is greater in store—89 percent of women and 79 percent of men add additional items to their cart versus 77 percent of women and 67 percent of men online. In short, the in-store experience may be consolidated and reimagined in the coming years, but it is evident that it will not go away completely.
In addition to what the study and fellow partners suggest, Diversity Best Practices recommends that retailers consider the following to both minimize instances of RBET during the in-store experience:
The retail industry has shifted dramatically, partly due to COVID-19, however other pressures such as the convenience and safety of online shopping, changes in consumer behaviors, and an abundance of choices create more of an urgency for optimizing the in-store experience so that all customers have a welcoming, positive and engaging brand interaction.
Without this and upon instances of RBET, the study shows that there is limited redemption and recourse for retailers to win back a customer.
It is our hope that the findings from this survey will serve as a call to action for the industry at large to take proactive measures to remediate RBET consumer complaints, while also communicating actions taken and reinforcing company and customer values.
The biggest threat to retail lies here: Retailers cannot afford these significant losses, and RBET can create catastrophic implications to the bottom line. Which now begs the question,
“What are we going to do about it?”
To learn more about the study and Sephora’s action plan, please visit: www.sephora.com/diversity-and-inclusion.
Diversity Best Practices will soon be hosting a DBP Members Only webinar on the Sephora Study featuring George-Axelle Broussillion Matschinga, VP of D&I at Sephora. Details coming soon.
Katie Oertli Mooney Bio
Katie Oertli Mooney is a Senior Director, Member Relationship Advisor at Diversity Best Practices.
Katie is an accomplished diversity, equity and inclusion (DEI) leader and thought partner with expertise in driving strategy and growth of diversity and inclusion change management, planning and programs.
Katie is highly regarded for her ability to establish trust and personally connect with her clients as many “respect and look to her expertise” as she is intentional in the development of long-term relationships and partnerships.
Katie’s commitment diversity and inclusion spans her career. Prior to joining Diversity Best Practices, she was responsible for overseeing the client delivery, staffing, operations and growth as Vice President of Jennifer Brown Consulting. She was accountable for the firm’s successful consulting project delivery to clients from the Fortune 1000, government agencies, startups, to nonprofits.
Prior to that, she managed the diversity, equity and inclusion Enterprise learning and development strategy at Capital One specializing in differential investment programming to support historically underrepresented talent and communities of color while simultaneously advancing efforts to create a more equitable policies and processes.
Connect with her on LinkedIn.
Learn more about her work, here.