But it might be brands that are missing out the most. There is an estimated $300 billion already in play today—$260 billion in reallocated spending and $40 billion in new consumption—from better serving Black consumers. The latest research from the McKinsey Institute for Black Economic Mobility, which included a survey of almost 3,500 respondents, makes the case that serving Black consumers better would deliver both social and economic benefits—to the United States as a whole, and to individual companies.
Companies that want to do better must understand the unique circumstances and preferences of Black Americans. Of course, Black consumers are far from a monolith; they have a wide variety of tastes and backgrounds that influence how they interact with brands. The analysis highlights growing Black consumer markets, the economic opportunity that exists to invest in them and some broad-based values shared by this group. For example, the research found that, regardless of consumption category, Black consumers tend to seek brands that are inclusive and trustworthy, place a high priority on health and are very brand aware.
This makes clear that Black consumers’ hearts, minds—and wallets—can be won by meeting their aesthetic, cultural and economic needs, and the companies that get this right stand to benefit greatly from this growing economic bloc.
To promote racial equity, meet the needs of Black consumers—and create value—companies should focus on three main areas:
Look at your workforce
Why are so many companies missing the mark when it comes to serving Black consumers? In part, because there is a lack of representation at all levels. For example, only 6.3 percent of U.S. marketing research analysts and 5.7 percent of marketing managers are Black. It is important that companies employ a workforce that is representative of—and connected to—the communities they wish to serve. Champion the hiring and promotion of Black workers into decision-making roles, particularly those with profit-and-loss responsibility.
Look at how you operate
Institute policies and guidelines to ensure that Black communities are treated with dignity and feel represented. Of course, this means ensuring Black people are included in branding and marketing materials, but this is only part of the equation. Companies must focus on structural changes, such as ending in-store monitoring policies and discontinuing products that can become functionally predatory and disproportionately target Black consumers—including high-interest loans. Further, companies should focus on providing a range of products, especially those that offer good value for the price, to Black communities. One way to do so is to seek out Black-owned and -focused brands and suppliers.
Look at your strategy
Many retail companies determine where to open new locations by using business models based on their existing footprint. While this seems rational, it typically leads them to opening locations in areas similar to existing ones and, by default, excludes many Black communities. Instead, companies should re-evaluate models and seek opportunities to commit capital to profitable commercial development in underserved areas. They should also ensure that R&D, M&A and product design meet Black consumers’ needs is an integral part of corporate strategy.
Unmet demand, consumer dissatisfaction and increasing buying power equals a massive market opportunity for consumer brands that are serious about serving Black consumers. However, to do so will require real investments in organizational capabilities to understand and meet their unmet needs. Companies that get this right stand to greatly benefit from the massive opportunity ahead.
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