How are Black-owned beauty brands navigating the retail landscape?
Big retailers like Sephora, Ulta and Target have made commitments to diversify their shelves. How much of an impact has it had?
In 2020, Aurora James, the founder of fashion brand Brother Vellies, made a demand of retailers. “I am asking you to commit to buying 15% of your products from Black-owned businesses. We represent 15% of the population and we need to represent 15% of your shelf space," she wrote in an Instagram post dated May 30, 2020.
Many retailers had been quick to issue statements of solidarity as social justice protests swept across the world, following the murder of George Floyd. The Fifteen Percent Pledge was asking them to create lasting change.
In the beauty industry, Black-owned brands have historically struggled to get shelf space in major U.S. retailers and department stores. Before it signed up to the Fifteen Percent Pledge, of the 290 brands Sephora stocked, just nine were founded by Black entrepreneurs.
Speaking to Fashionista, Klur founder Lesley Thornton said that when she was pitching her range of clean beauty products for Black women to retailers in 2017, she “could not get people to return my emails … Clean beauty was very un-inclusive.”
Now more than 25 retailers including Ulta, Macy's and Sephora have committed to the Fifteen Percent Pledge.
Other retailers such as Walmart and Target have created their own strategies to increase diversity on the shelves, with the latter rolling out a feature on its website in July 2020 to make it easier for customers to identify and shop with Black-owned brands. The big-box retailer has also committed to adding more than 500 Black-owned brands to its shelves by the end of 2025.
New brands to have been picked up by these retailers include skin care startup Eadem, which launched in May 2021, men’s skin care brand Mantl, which launched in February 2020 and is now available in Nordstrom, and Topicals, which is available at Sephora.
Providing brands with access to shelf space only addresses one part of the equity problem that exists within the beauty industry and the wider business landscape.
According to McKinsey, Black entrepreneurs typically start their businesses with an average $35,000 of capital, compared to $107,000 for their white counterparts. Black entrepreneurs also see just a fraction of venture capital investment compared to other founders — while VCs invested a record $1.8 billion in Black-founded businesses in the first half of 2021, this equates to just 1.2% of overall funding, according to Crunchbase.
This imbalance can have significant implications on how fast a business can grow, and whether or not it can afford to take on a contract at a retail giant like Ulta, Sephora or Target.
“It’s one thing to be on the shelf, and it’s another to be on the shelf and have the support of that business as well,” says Raphael Babalola, the cofounder of Temple, a U.K.-based skincare brand for men of color, which currently sells its products through its own website as well as through Black-owned brand marketplaces Jamii and Yard + Parish. “What’s the 12 month, 24 month, 36 month commitment? How are you going to accelerate these brands to make sure they do succeed when they’re on your shelves?”
Retailers have been exploring how else they can support the new brands that they bring in store, in order to provide a more equitable playing field. In 2021, Sephora made the decision to reshape its in-house brand accelerator program — which has been running since 2016 — to focus on founders of color.
The six-month program covers a range of topics, from “sitting with Nancy Twine, the founder of Briogeo, to learning how to make a P&L and going through the A, B, Cs of EBITDA,” says Megan Graham, the founder of travel beauty and toiletries brand Ries, which was part of the 2021 Sephora Accelerate cohort. Other brands to have taken part include Kulfi Beauty, Hyper Skin and Imania Beauty. Brands were also provided introductions to venture capitalists and advisors, as well as the Sephora sustainability team, according to Graham. “They opened their doors to us completely.”
Graham says that being able to build her brand with the support of one of the world’s largest beauty retailers has been transformative, particularly as she had struggled to gain access to capital or other brand-building programs since she founded the business in 2019. “During the summer of 2020, after George Floyd was murdered, all of these VCs were saying ‘Black-owned brands, we want to help you, you can come to us and you don’t need a warm intro,’” she explains. “There was this big Excel sheet of all these VCs who were making commitments. I think I emailed all of them — and did not hear back from a single one.” While Ries currently sells direct-to-consumer via its website, it will be launching with Sephora later this year.
Earlier this month, Ulta announced a $50 million diversity, equity and inclusion funding package that includes investing $8.5 million in marketing efforts for Black-founded brands, and $3.5 million in improving in-store merchandising to help shoppers find these brands. “Just adding brands from diverse founders doesn't guarantee that these brands are going to be successful,” the company’s CEO, Dave Kimbell, told Business Insider.
While retailers have been forthcoming with their support for Black-owned brands, if they want these brand to stick with them, they also need to consider how they are appealing to shoppers who may still assume they don’t carry the products they need.
According to The Black Pound Report, a U.K. survey published earlier this month, nearly four in 10 Black female shoppers report that it is still difficult to access the right cosmetics and skin care products in retail, with 30% saying they turn to specialist stores to find what they need. A study by Sephora meanwhile found that 74% of shoppers felt that retail marketing fails to showcase a diverse range of skin tones, body types and hair textures — potentially putting people off before they’ve even set foot in store.
Such sentiments can inform the retail channels a brand decides to pursue. When it comes to luxury department stores, for example, Babalola cites that 40% of men of color feel they’re not going to find the products they need for their skin at those retailers. “For us, it’s about being in as many places as possible with a mix that makes sense,” he says. “We’ve created a brand and products that cater to the needs of Black and Brown men, but at the end of the day you’re going to have greater reach if you’re in one of these recognized high-street retailers. It’s something we’re going to be exploring.”
Still, ensuring a diverse range of brands can get their foot in the door will play a big role in changing these sentiments. Babalola says he sees retailers vocalizing their commitment to broadening their ranges as a positive thing. “It’s at least opening the door and letting us know who we can approach with our brand. I genuinely view it as an invitation.”
“I can only speak for my own experience, but it was right place, right time for us,” says Graham, noting that opportunities such as the one with Sephora would not have been available to founders launching even a few years previous. “I’m hopeful that the change is permanent and continues to shift in the right direction.”