Retailers Could Miss $6 Billion in Spending by Neglecting Black, Asian and Ethnic Minority Consumers
Retailers have been warned they could miss out on their share of the £4.5billion spent by multi-ethnic shoppers due to a lack of diversity in brands, according to a new study.
The Black Pound report, which surveyed 3,500 people, identified that black, Asian and multi-ethnic consumers may often feel pressured to spend in specialty stores due to the limited product range offered by some of the larger mainstream retailers. from the United Kingdom.
The Black Pound Report was authored and published by Backlight, a culture change agency whose goal is to educate and guide business leaders to ensure authentic reach to multi-ethnic communities, increasing diversity within organizations. .
The paper is considered the most comprehensive research on the multi-ethnic consumer carried out in the UK. He points out that, of the 68.2 million people living in the UK, 44% are black, Asian and multi-ethnic, with a combined annual disposable income of £4.5 billion.
The beauty industry is a sector highlighted in the report. Multi-ethnic consumers spend £230m each month on health and beauty, but nearly four in 10 black female shoppers still struggle to buy cosmetics and skincare products
Lydia Amoah, CEO of Backlight, is well aware of the difficulties some consumers may encounter: “When I was 21, I went to a department store to buy makeup. I struggled to find a shade for my skin tone and asked the assistant for help. She said they only stock colors for ‘normal skin’. At that point, I decided that my life’s work would be dedicated to ensuring that no one ever had the same experience.
The report highlights the value as well as the importance of getting it right for multi-ethnic consumers. They are likely to spend 25% more on health and beauty products than any other consumer. Currently, almost a quarter (22%) of these consumers feel the need to buy these products in specialized stores; a figure that rises to 30% for black women.
Black, Asian and multi-ethnic consumers surveyed for the report were “more motivated” to shop locally (64% of participants) compared to the general population (56%). This also applies to buying ethical products: 64% of black, Asian and multi-ethnic consumers say they buy more fair trade products compared to 47% of the general population.
This is something that Adunni Akinduro understood when starting his gift business in 2020: “When establishing my luxury gift business, ‘by Araa’, I studied the needs of consumers and it was evident that there was a real desire to support black and ethnic – minority-owned businesses It was important to me to source from a wide range of suppliers, and every package we send out will include a product from a black-owned business. As a black small business owner, I wanted to make sure I was supporting entrepreneurs like me, while giving my customers access to the products they wanted .
Edward Enninful OBE, editor-in-chief of British Vogue and European editorial director, believes that companies, particularly in the fashion and beauty sector, have made progress in recent years. “There have been so many positive movements for black and multi-ethnic consumers in the fashion and beauty industry in recent years and it’s great to see the continued push for change happening in our industry,” he said. he said about the report.
Akinduro is convinced that there is still a lot of work to be done. “Retailers need to know their consumers’ needs and be inclusive,” she says. “Being inclusive and diverse is so important for progress.”