Brands cutting DE&I efforts—what consumers think of the different policies

Even as companies ranging from Lowe’s to Tractor Supply Company to Brown-Forman roll back diversity, equity and inclusion initiatives, a new report shows that such programs still enjoy majority consumer support. A new Morning Consult survey found that 57% of U.S. adults believe that recruiting employees from minority groups is an effective way to support workplace equality, and 55% support efforts to ensure these employees receive promotions. But the survey, conducted last month, found less support for DEI initiatives (50%) focused on featuring diverse actors in ad campaigns. Also read: The state of diversity in advertising and marketing “It’s clear that what consumers view as packing the most punch is hiring, retaining and elevating minorities to positions of power,” said Ellyn Briggs, brand analyst at Morning Consult. But what is not clear, and what the survey did not address, is how brands should highlight this to consumers, outside of DEI reports outlining the breakdown of employees. “It’s rare that consumers know the makeup of their favorite brand’s leadership team, and yet the findings show that many would rather brands support minorities with dollars and promotions, rather than inclusive marketing,” Briggs said. The survey mirrors a report Morning Consult published last year, which found that internal company actions resonated more with customers than external advocacy. Seventy-one percent of consumers said they viewed a company as more favorable if they paid their employees well and 69% said they viewed a company as more favorable if a company was known to be a place where employees liked to work, according to that report. In the most recent report, a majority of surveyed adults (58%) believed DEI initiatives are either “very” or “somewhat” important to the success of most businesses. But only half of the respondents said that hiring diverse actors for ad campaigns supported workplace equality. That is not to say that inclusive marketing should end: Another report published in January by Morning Consult found that diverse marketing can drive purchases among non-white Gen Zers. The findings come as Lowe’s, Tractor Supply, Deere & Co , Harley-Davidson and Jack Daniel’s maker Brown-Forman Corporation have rolled back or made changes to their DEI programs and policies after being criticized by conservative activist Robby Starbuck, who has pledged to “end wokeness in the workplace, dismantle DEI and eliminate ESG,” referring to environmental, social and and governance policies. The brand backlash is reminiscent of what Bud Light faced after a promotion with transgender creator Dylan Mulvaney in early 2023. The beer brand, which was America’s best-selling beer when the controversy arose, subsequently spiraled into a severe sales slump and has now fallen behind Modelo Especial and Michelob Ultra. Morning Consult found that men, baby boomers and Republicans were the most doubtful of DEI programs and more likely to support rollbacks. Research from McKinsey shows that brands that are committed to diversity perform better financially than their competitors that do not. The consulting firm found that companies in the top quartile for ethnic diversity have, on average, a 27% financial advantage over their peers. For brands that might come under attack for their DEI programs, rolling back policies may do more damage, especially when it comes to retaining Gen Z consumers. “Gen Z is very against rollback efforts because they value authentic brands, so being flip-floppy is not good,” Briggs said. “When a company walks back its efforts, they may do it for a small segment of consumers, but it upsets the majority who were happy the brand had them.” How much it upsets the majority may play out in future earnings reports. If sales are better in the wake of rolling back their DEI efforts, other brands seeking to court conservative buyers may lean in and proactively limit their DEI efforts as well, Briggs said. Poor sales may lead to them reinstating policies to draw back consumers. But this does not mean that brands with more conservative consumers should proactively change or eliminate their DEI policies. “Though majorities of Republican consumers were in favor of all tested rollback efforts in our dataset, there were still sizable portions (around 20% to 30%) that reported opposition,” Briggs said. “So even among the most anti-DEI group, there is still some support for DEI.”

Brands cutting DE&I efforts—what consumers think of the different policies

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