What’s the Story?

Coresight Research has identified inclusivity as one of the key trends to watch in 2021. Inclusivity—providing equal access for people who might otherwise be excluded or marginalized—has accelerated in the light of the racial justice movement in the US helping to inspire a global conversation on diversity and representation. It is not just a trend but a movement that is impacting the entire retail industry. Companies are focusing on their corporate strategies to improve diversity of race, gender and disabilities across their organization, influencing internal teams, products and the supply chain. In this report, we explore the forces that are driving inclusivity in corporate structures and policies—from consumer pressure to initiatives by stock exchanges—the inclusive corporate strategies that brands and retailers operating in the US are implementing and the importance and benefits of an inclusive corporate culture.

Why It Matters

Inclusivity is a thread that touches every part of an organization, both internally and externally. It is guided by an organization’s strategic goals and mission. Conversations around diversity and inclusion are leading organizations to assess their internal teams and goals. By enacting inclusivity internally and throughout the supply chain, brands and retailers become more socially responsible and can tap growth opportunities in serving underrepresented individuals.

Inclusive Corporate Strategies in US Retail: A Deep Dive 

Driving Forces Behind Inclusivity in Corporate Structures and Policies Consumer Pressure  The social environment of 2020 has had the biggest impact on corporate policies, propelling conversations around inclusivity to the forefront both on social media and through corporate channels. Last year, there was an outpouring on social media related to the Black Lives Matter movement, with consumers demanding that big beauty companies reveal their corporate diversity metrics, as it was believed that they were promoting messages on social media that did not match their internal organizational structures. [caption id="attachment_130757" align="aligncenter" width="725"] The “Pull Up or Shut Up” campaign started a social media movement of consumers demanding that companies disclose the diversity of their corporate structures
Source: Pullupforchange Instagram account [/caption]   The pressure from consumers for brands and retailers to increase transparency around inclusivity and diversity is prompting organizations to make changes in internal team structures, hiring policies and procedures. The Nasdaq’s New Diversity Requirements and Alliance for Global Inclusion In December 2020, the Nasdaq Stock Market filed a proposal with the Securities and Exchange Commission to adopt new rules regarding board diversity and disclosure for Nasdaq-listed companies. Under the proposal, Nasdaq companies would have to have at least two diverse directors (at least one woman and at least one member of an underrepresented community) or explain why it has failed to do so. Companies would be required to disclose board diversity on an annual basis in a prescribed tabular format. The Nasdaq Stock Market is an American stock exchange based in New York City; it is ranked second among stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange. On April 29, 2021, the Nasdaq announced a new industry coalition, Alliance for Global Inclusion, which has developed shared diversity and inclusion metrics. The alliance includes four technology companies: Dell, Intel, NTT Data Corp and Snap. In May 2021, the Alliance published its first semi-annual inclusion index—findings from a global survey of 13 major companies, launched by Intel in 2020, to determine the status of diversity and inclusion progress. The stated goal of the index is to “learn about current D&I [diversity and inclusion] practices and identify opportunities to potentially improve D&I outcomes across industries. A public index increases transparency, which builds trust, drives collective action, and scales impact.” The index provides details on each of the companies’ diversity workforce representation in terms of gender, race and ethnicity. It also provides information on diversity and inclusive practices, covering training, mentorship, pay, suppliers, product design, and inclusion tracking and measurement. The index shows that three key areas of opportunity are inclusive product design, diverse mentorship and racial pay equity, with the fewest companies reporting that they have such practices (see Figure 1). The diversity practices that are most established are hiring bias mitigation training, inclusive conversation training and educational outreach—underscoring that diversity and inclusion is an industrywide movement.

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Figure 1. Inclusion Index: Whether Companies Have, or Perform, Select Inclusive Practices (Number of Companies) [caption id="attachment_130758" align="aligncenter" width="724"] Base: 13 public companies (11 technology companies, one energy company and one industrials company), surveyed from May 2020
Source: Alliance for Global Inclusion [/caption]   Brands and Retailers’ Inclusive Corporate Strategies  We are seeing brands and retailers take action to implement inclusive corporate strategies, with two primary areas of focus: diversity in the workforce through inclusive hiring initiatives and diversity in brand portfolios and supplier bases. We discuss inclusivity in recruitment and the supply chain below. Recruitment  Many major brands and retailers are updating their corporate strategies to incorporate inclusivity goals, with specific targets for increasing diversity among its workforce, including and at senior levels. In Figure 2, we present examples of recent developments in this space by notable brands and retailers operating in the US.

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Figure 2. Recent Inclusive Hiring Initiatives by Selected Brands and Retailers Operating in the US [wpdatatable id=1157 table_view=regular]

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Source: Company reports

• Inclusively: Connecting Candidates with Disabilities to Companies and Careers

In August 2020, the Inclusively employment platform was launched to connect candidates with disabilities to companies and careers. Inclusively is comparable to LinkedIn, providing candidates the ability to customize job searches using “success enablers” (or workplace accommodations) such as assistive technologies (vision and hearing), telework/remote work, worksite accessibility, service/emotional support, animals, modified methods, assistive services, modified work schedules and job restructuring. The company uses an algorithm for job matching combined with a human approach. Inclusively’s Talent Operations Team provides guidance for job candidates and training for employers to ensure successful placements. Charlotte Dales, CEO and Co-Founder of the company, said she was inspired to create the platform after receiving a facial from her cousin, the first licensed aesthetician in Florida with Down’s Syndrome. The experience highlighted the disconnect between the talent and potential possessed by individuals with disabilities versus the opportunities they have access to, and she wanted to help close the gap. For Dales, the name Inclusively encompasses people without disabilities as well as people with disabilities. As she summed up recently, “Products designed for people with disabilities can actually be tailored to help everyone. So, manufacturers of niche disability-oriented products need to look at how their products can be applied to more mainstream applications. A force for good will also equal a force for growth.” Regarding the social backdrop for diversity and inclusion, Dales confirmed to Coresight Research that Inclusively has “noticed a real difference in tone regarding disability inclusion when talking to employers, even from where things were two years ago… Everything that happened last year has made a huge difference for people with disabilities.” Companies currently using Inclusively include Dell, Charles Schwab, Edward Jones, Ernst & Young, FIS Global, Microsoft, Salesforce, Traveler’s and many more. Supply Chain  As part of updating their inclusive corporate strategies, brands and retailers are incorporating initiatives to increase diversity through the supply chain—specifically, across their supplier base and product and brand portfolios. In response to racial unrest in the US in the summer of 2020, there was a call to action on social platform Instagram for retailers to pledge 15% of shelf space to Black-owned brands. Companies that sign up to the “15 Percent Pledge,” created by Aurora James, Creative Director and Founder of luxury accessories brand Brother Vellies, are asked to conduct an internal audit of their current spending power and contracts allocated to Black businesses, along with committing shelf space. The logic behind the 15 Percent Pledge is that the Black community comprises 15% of the total US population; therefore, 15% of the products on retailers’ shelves should reflect this. In addition, providing more shelf space to brands that may have been underrepresented provides an opportunity for retailers to increase diversity in their product range by providing products for underrepresented consumers. For example, Sephora, which has taken the 15 Percent Pledge, offers products from many Black-owned beauty brands that are formulated specifically for the Black consumer. In Figure 3, we present examples of recent announcements in this space by notable brands and retailers operating in the US.

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Figure 3. Recent Initiatives by Selected Brands and Retailers Operating in the US To Update Product and Supplier Representation [wpdatatable id=1158 table_view=regular]

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Source: Company reports The Importance and Benefits of a Culture of Inclusivity Diversity in Leadership On April 23, 2021, Deborah Weinswig, CEO and Founder of Coresight Research, moderated a panel at Blue Yonder’s ICON conference. She was joined by Willa Blasingame, Vice President of Americas Supply Planning and Logistics at food company McCormick & Company, and Katie Low Anderson, CFO of Guess?, Inc., to discuss how brands and retailers can leverage diversity and inclusion to optimize their supply chains. The panel highlighted the importance of diversity in leadership and the role of mentors in inclusive corporate structures:

• Diverse executive teams—There are very few women in supply chain executive roles, which Blasingame attributes to transportation and logistics being traditionally male-dominated roles. She added that there is a major rebranding opportunity as many people do not understand “what supply chain is,” its many components, technological aspects and multiple functions and players. Blasingame emphasized that having diverse leaders is extremely important for employees to not only see representation but to see action behind words. According to Blasingame, the CEO of McCormick & Company met with the organization to highlight that diversity initiatives were important to him, which she described as an important signal to employees.
• Mentors—Mentors help employees to navigate company politics and to learn more quickly. Anderson stressed that making personal connections is very important to Guess?, Inc. globally; there are a lot of women at Guess and the company makes mentoring a priority. Blasingame explained that she has previously addressed the Society of Women Engineers at the University of Maryland Baltimore County, where she shared her experiences and knowledge about the Science, Technology, Engineering and Mathematics (STEM) careers available to them. Blasingame spoke about what it takes to be successful—not just focusing on academics, but on important soft skills such as the ability to work with different people from diverse backgrounds. She explained that learning to navigate your way to the decision-making table takes time and patience, and she stressed the importance of sensitivity and cultural awareness. On the panel, she emphasized that the percentage of women coming out of engineering is still very low, so it can be isolating as a woman in this field; mentoring is therefore especially important for women engineers.

Employee Retention At the Consumer Electronics Show in Las Vegas on January 12, 2021, technology company Intel presented in the “Keys to Success—How D&I Helped Us Survive 2020” session, which was moderated by Tiffany Moore, Senior Vice President of Political and Industry Affairs at the Consumer Technology Association. During the session, industry leaders at Intel and ride-sharing platform Lyft provided diversity and inclusion insights from their organizations. Intel, a pioneer in championing an inclusive and diverse workforce, made a commitment in 2015 to equal representation. The company achieved its 2020 goal of reaching full representation of women and underrepresented minorities in its US workforce two years ahead of schedule. In January 2019, Intel also announced that it achieved 100% gender pay equity globally by closing the gap in average pay between employees of different genders in the same or similar roles. Dawn Jones, CDIO (Chief Diversity and Inclusion Officer) at Intel, said that reaching full representation was a huge milestone for the company. “You cannot hire your way into diversity and inclusion; hire in good talent and focus on keeping them,” she added. One of the company’s six values is “inclusion,” to make sure that employees are in an environment where they are thriving and growing and in a culture that supports them. Jones highlighted that Intel delivers training and internal sponsorship programs to this end, and it holds listening sessions with employee resource groups and leadership councils (which includes members of the executive team). Intel has pledged in its 2030 goals that it will advance diversity and inclusion, including by doubling the number of women and underrepresented minorities in senior leadership roles. The company also aims to increase diversity in technical roles by 40% to ensure it has an inclusive workforce. Monica Poindexter, Chief Diversity Officer at Lyft, echoed the sentiment of retaining employees by engaging in conversation. She said the company has hosted over 30 inclusion circles to listen to the experiences and needs of its teams, and these conversations led the executive team to rediscover talent within the organization. Lyft has launched new initiatives based on feedback from within the company, Poindexter confirmed.

What We Think

Inclusion is an industrywide movement that is being driven both by consumer demand and new policies that may put in place diversity requirements for public companies. While the Securities and Exchange Commission has not yet finalized its position, it is clear that the backdrop to inclusion is changing, and companies need to update their corporate strategies accordingly.

• Major retailers and brands have focused on hiring initiatives that improve workforce and leadership representation. We expect this to be an industry standard measurement as consumers and stakeholders will be expecting companies to report updates on these metrics.
• Diversity and inclusion initiatives also impact suppliers and product and brand portfolios, providing opportunity for brands and retailers to attract a new customer base through underrepresented brands.
• Executives from selected companies report that diverse executive teams, mentorship and retention initiatives help to support inclusive cultures. We are hearing that employees feel empowered when they hear from leaders like them in positions of power; mentorship is beneficial for everyone (and especially those that may be underrepresented); and retention is especially important for diversity. Brands and retailers should focus on these areas when developing and implementing inclusive corporate strategies.

For more on this topic, read Coresight Research’s Playbook: Inclusivity in Retail, in which we present five strategies for brands and retailers to align inclusivity goals across their products and operations.