Since May 2020, prominent retailers and well-known brands have generated a revenue of $14 billion for Black-owned businesses.
Over the past three years, renowned companies like Nordstrom, Macy’s, Sephora, Ulta Beauty, and 25 other entities have joined forces with the nonprofit organization Fifteen Percent Pledge. This initiative urges companies to align with the 15% representation of the community in the U.S. population by reserving 15% of their shelf space for Black-owned brands.
Before making this commitment, many of the current partners involved in the initiative allocated less than 3% of their shelf space to Black-owned brands. However, all partners have now made a dedicated pledge to achieve the 15% target over the span of a 10-year agreement.
“Let’s establish a chance to forge a forward-looking approach that embraces greater inclusivity and allows entrepreneurs, who have been systematically marginalized throughout history, the chance to create wealth that can span generations,” remarked LaToya Williams Belfort, the executive director of the Fifteen Percent Pledge.
With a resolute commitment, the Fifteen Percent Pledge has set a goal to generate $1.4 trillion in wealth for entrepreneurs by the year 2030.
Sephora Breaks Ground as First Multibillion-Dollar Retailer
Sephora made history by becoming the inaugural multibillion-dollar retailer to pledge its commitment to this initiative, just within two days of founder and entrepreneur Aurora James, based in Brooklyn.
In her Instagram post, James expressed, ‘Your businesses often thrive due to the purchasing power of the community. Many of your stores are situated within neighborhoods. A considerable number of your social media posts are viewed by audiences. This is a minimal effort you can extend to us.’
In line with this sentiment, the collective was established in 2020 as a means for corporations to lend support to Black-owned businesses, particularly in response to a surge of corporate commitments toward diversity, equity, and inclusion. These commitments aimed to address the enduring racial wealth disparity.
Analysis based on Federal Reserve data from March 2023 reveals that the total household wealth among households in the U.S. stands at $6.25 trillion a mere 5% of the $115.65 trillion wealth owned by white households. Notably, as of 2022, only 4% of the largest companies in the U.S. had managed to successfully narrow the racial wage gap.
Embracing a commitment to transformation, over twenty-five companies have “embraced the commitment,” encompassing twenty apparel and furniture retailers, three lifestyle magazines among them Vogue & InStyle as well as the cannabis dispensary chain MedMen.
Experiencing the Effects
More than 625 Black-owned businesses and brands have formed partnerships with major corporations backing the initiative. Christina Tegbe, founder of 54 Thrones, a beauty brand, and a Fifteen Percent Pledge partner, shared that their entry into the retail sector was facilitated by Nordstrom in 2020.
Since gaining attention in 2020, 54 Thrones has experienced substantial growth, particularly after May 2020 when the Fifteen Percent Pledge gained traction. Tegbe noted that sales had transformed from cumulative four-figure sums between 2016 and 2019 to days with five-figure sales after May 2020.
Tegbe acknowledged that although her company was still self-funded, the Fifteen Percent Pledge had catalyzed the retail industry to actively embrace Black-owned brands. As a result, 54 Thrones found its place on the shelves of prominent outlets such as Sephora, Nordstrom, Credo Beauty, and even Gwyneth Paltrow’s Goop.
In August 2022, Nordstrom inaugurated its first Business Month, featuring a “Buy Black” pop-up market to highlight brands like 54 Thrones and others. The resounding support led to an impressive $14 million in sales from Black-owned or founded brands at Nordstrom in that month alone.
Nordstrom, aiming to replicate this success, is launching a new multi-city initiative to promote Black-owned brands. This effort aligns with their commitment to achieve $500 million in retail sales from brands owned, operated, or designed by and Latinx individuals by 2025.
Williams Belfort emphasized the pursuit of companies with significant economic influence, fostering inclusivity for a more inclusive future.
Pushback Against Goals Related to Diversity, Equity, and Inclusion (DEI)
The corporate sector in the United States has undertaken the commitment to endorse diversity, equity, and inclusion; however, recent resistance from legislators aiming to curtail corporate initiatives in this realm has created a complex landscape to navigate.
Just recently, a conservative legal entity filed a lawsuit against Target in a Florida federal court, acting on behalf of an investor. The lawsuit alleges that the retailer misrepresented the effectiveness of its risk oversight concerning LGBTQ-themed products during Pride month.
This lawsuit marks the most recent episode in an ongoing legal clash between conservative legal organizations and lawmakers against corporations that have implemented policies to enhance support for racial and gender inclusivity.
In the previous week, Anheuser Busch InBev, the parent company of Bud Light, experienced a notable reduction in U.K. sales during the second quarter due to consumer boycotts arising from an advertising collaboration with transgender influencer Dylan Mulvaney.
Tegbe expressed her apprehension regarding this backlash, stating, “It’s troubling. The notion of companies retracting and opting for clandestine actions is unsettling.”
Notwithstanding her worries, Tegbe maintains an optimistic outlook, believing that the majority of consumers are interested in discovering and purchasing products from a variety of founders.
“In any significant transformation or movement, it’s imperative that companies firmly adopt a stance without reservations,” she remarked.
The executive director of the pledge, Williams Belfort, asserted that the effectiveness of the initiative is evident through statistical evidence.
“The data unequivocally demonstrates that offering opportunities to entrepreneurs, boosting revenue for retailers, and fostering a more resilient economy are all advantageous economic outcomes for everyone,” she emphasized.
Summary
Retailers directed $14B to Black-owned businesses in May 2020. Notably, Sephora led by committing to the Fifteen Percent Pledge. Businesses like 54 Thrones grew, fueled by pledge support. Nordstrom aims to replicate success, expanding its Black-owned brand promotion. Challenges persist amid diversity efforts.
