Boycotts and backlash reveal complications in changing DEI landscape

It’s a tricky issue for these large corporations to navigate, according to the six cultural marketing executives Digiday spoke with for this piece, and for the Black-owned brand founders themselves. Amidst the changes, Black-owned brands like The Lip Bar lipstick, The Honey Pot feminine care brand and Tabitha Brown, a social media personality with several brands at Target, are caught in the crosshairs — all of which have taken to social media to express disappointment with the changes to DEI policy while trying to convince shoppers that things aren’t as black and white as they seem. (The Lip Bar, The Honey Pot and Tabitha Brown all declined to make a spokesperson available for comment.)

“Often brands must partner with Target or Walmart before any other retailers take a shot,” Bea Dixon, founder of The Honey Pot, a feminine care brand, said in an Instagram post. “I’m not telling you how to spend your money, but I am pleading for these brands because this is real,” seemingly pleading shoppers not to boycott.

In response, Oh Happy Dani, an illustrator brand, began the process of removing its products from Target after the DEI rollback announcement, according to an Instagram post from Danielle Coke Balfour, the artist, activist, speaker, and entrepreneur behind the brand.

Seemingly, brands have spun in their heels, turning away from the commitments made during the Black Lives Matter movement. In response to the murder of George Floyd, many brands flocked to post black squares on Instagram to display solidarity, agreeing to participate in the Fifteen Percent Pledge, where at least 15% of retailer shelf space would go to Black-owned businesses.

By 2023, eMarketer reported that brands increasingly saw Black History Month as “an opportunity to make long-term commitments over short-term sales.” 

Losing the physical footprint 

In January, Target retooled its diversity protocols, halting external diversity-focused surveys, evolving its “supplier diversity” team to its “supplier engagement” team to “better reflect our inclusive global procurement process across a broad range of suppliers, including increasing our focus on small businesses,” according to the retailer’s announcement.

For reference, Target established its REACH, Racial Equity Action and Change, committee geared toward increasing Black representation internally, advance Black-owned and Black-founded businesses and prioritize philanthropic investments in 2020. That also came with a $10 million commitment to “advance social justice and support rebuilding and recovery efforts in local communities.”

And while Target’s change of heart is disappointing, marketing executives say, the brands they carry often rely on larger retailers for product discovery, distribution, measurable growth and profitability, said Liv Lewis, an executive marketing communications consultant. 

“If they lose their [physical retail] footprint, I do not think any marketing will be able to make up for the footprint loss,” Lewis said in an email to Digiday. She added that often, consumers have less patience with smaller brands, including those owned by marginalized voices. Meaning, if a brand puts paid media spend behind a product and a consumer can’t find it in-store, they’ll lose interest “because they aren’t going on a hunt for it so they find an alternative product based on convenience.” 

Those critical of Target’s decision have suggested bypassing big box retailers and shopping directly through Black-owned brand e-commerce sites. But that’s assuming the brand has the infrastructure for e-commerce from shipping costs to fulfillment labor. That strategy seems to be the contingency plan for Oh Happy Dani, the aforementioned illustrator brand, that began the process of removing its products from Target after the DEI rollback. According to the company’s Instagram, shoppers have since turned to the brand’s online shop. (Oh Happy Dani declined to comment further and didn’t provide figures to illustrate this.) 

That could be the path forward, says Nicholas Love, CEO of Kulur Group challenger brand agency, and founder and executive director of Dope Thinkers nonprofit. He added that the brands impacted by the rollbacks will need to pivot their marketing strategies to better educate shoppers on how to continue supporting the business rather than relying on major retail corporations, even if it disrupts shoppers’ typical purchasing journey. 

“If we truly believe in going where we are celebrated, not just tolerated, then we have to meet our customers where they are,” he said. 

There’s been a misconception that diverse-owned brands have achieved retail placement as a result of the commitments made back in 2020, according to marketing experts and brand founders themselves. No doubt, those commitments were a linchpin but not the sole reason for their product placement, according to Kate Wolff, founder and CEO of Lupine Creative, a women and queer owned creative agency. 

“The rollback of diversity, equity, and inclusion efforts is not only difficult to watch, but also lacks merit,” Wolff said in an email. “DEI is not charity; it is a smart business decision.”

To put numbers to it, 40% of CMOs feel DE&I is an important part of what the brand stands for, according to eMarketer. Meanwhile, 75% of consumers say a brand’s diversity and inclusion reputation impacts purchasing decisions, per Kantar’s Brand Inclusion Index.

A complete 180 

The about face has left both marketing experts and minority-owned brands alike questioning the commitments of yesteryear. 

“The slight bump in empathy following 2020 should not be mistaken for revolutionary change,” said Dawn Wade, managing partner and chief strategy officer at Nimbus, Inc., a marketing agency. Wade is also co-founder of West End Gin, a Black-owned, Kentucky-based liquor brand.

At the same time, marketers question if it’s a matter of lip service to appease the new administration as well as right-wing activists given retailers still have partnerships with multicultural marketing agencies, including one where the agency founder spoke with Digiday on the condition of anonymity. 

“These businesses, it’s not like they don’t want the money of Black audiences,” said the agency founder, adding that these retailers still partner with cultural agencies like their own to obtain insight to multicultural shoppers and build marketing campaigns geared toward them. “They’re still participating and they’re still engaging, and they’re still trying to maintain attention from these audiences.” 

Case in point: Business has yet to slow down for Spill, a nearly two-year-old social media app geared toward diverse and inclusive audiences, according to Alphonzo Terrell, co-founder and CEO of Spill, who previously talked with Digiday. Earlier this month, Terrell told Digiday that in light of the DE&I fallout, advertisers had yet to rescind deals with the platform, having brought on the likes of Paramount+, Showtime and CBS. By the end of 2024, the platform is expected to cross $1 million in annualized revenue, he said. 

Ultimately, according to the anonymous agency executive, the dollars will tell the story, painting a full picture of the changes in DE&I commitments. 

“Let’s give it Q1,” they said.