The most valuable space in a retail store is the floor display or shelf space along the right corridor of the entrance. That’s because studies of consumer behavior show that the overwhelming majority of people walk to the right when entering a store. Put a product there and it will definitely be seen—and most likely be bought.
As companies sign on to the growing movement known as the “15% pledge,” which asks retailers to reserve that amount of shelf space for Black-owned brands, proponents say the enlisting firms will need to keep this quirk of human behavior in mind—along with many others to keep the intention aligned with its purpose. “I applaud the effort, but it’s important that such steps are not just gestures,” says Michael Hyter, Korn Ferry’s chief diversity officer. “It needs to be about creating opportunities.”
To be sure, business leaders are taking action in the fight to end systemic racism in a way they never have before. They are pledging to take concrete action to improve their hiring, promotion, and inclusion practices. They are taking a hard look at diversity not just in their talent and leadership pipelines, but also in their customer bases and supply chains as well. The “15% pledge,” which quickly became a trending topic on social media after a Brooklyn woman posted the idea as a way for retailers to back up their statements about standing with the black community, is part of those efforts.
So far, only one company has publicly signed onto the pledge, but experts expect more to follow. Data buying power certainly supports it. According to the research firm Catalyst, Black Americans’ buying power increased 48% in the last decade to $1.4 trillion, fueled by increasing education levels and growth in the number of Black-owned companies. Only Whites and Latinx ranked ahead of Blacks in American buying power, with $13.2 trillion and $1.7 trillion, respectively.
Nina Boone, a senior client partner in Korn Ferry’s Diversity and Inclusion and Board practices, says a more diverse supplier base will naturally lead to a more diverse customer base, which, in turn, can lead to stronger financial performance. “A lot of Black-owned businesses are born out of necessity because people can’t get the products they want or need from mainstream companies,” says Boone.
Boone says which specific Black-owned businesses mainstream companies choose to support is critical. There’s a huge difference between partnering with a celebrity-backed business versus a Black female local entrepreneur who bootstrapped her own operation.
The latter, of course, often doesn’t get access to equity or debt financing or other capital requirements that businesses need to grow. Indeed, Ayana Parsons, a senior client partner in Korn Ferry’s Consumer practice, says organizations have an opportunity to align purpose and action in service of both their customers and Black-owned businesses. Supporting Black-owned businesses, she says, will lead to more jobs for Black people and more reinvestment back into the Black community. “If a significant portion of your customer base is Black, then you owe it to yourself to better serve that population,” Parsons says.