Why ‘making the business case’ is vital to reaching Black consumers

Ethnicity's Howard Lichtman explains how brands under-valuing an entire community has led to a massive knowledge gap.

By Howard Lichtman

Many corporations have upped their game in terms of diversity and inclusion initiatives over the last five months.

Major campaigns promoting Black-owned businesses to mainstream audiences cropped up in record time. Organizations publicly pledging to improve their internal diversity and inclusion practices within months (instead of years, or never) also became part of our new normal.

As a multicultural agency, we at Ethnicity applaud all these efforts. However, many may have missed a key piece of the puzzle in solving the longer-term challenge.

There is an initiative in the United States called the 15% Pledge,  asking retailers to dedicate 15% of their shelf space to products created by or for Black-owned businesses. It has been successful in signing up a number of major retailers, and has come to Canada and with a similar pledge that already counts Indigo among its signatories.  They state that “this will not only help close the financial gap that has continued to widen for BIPOC enterprise owners, they are demonstrating that, above all, they believe it is the right thing to do.”

The intention is good – corporations should be committing to diversity in their ads and shelf space. But if they want it to be more than a short-term PR stunt, it can’t just be because it is “right thing to do.”

It also has to be a smart thing to do.

“Smart” is about doing things because it makes business sense. And while there is deep, moral imperative to do what’s right, that mindset needs to be combined with a smart business approach for these efforts and intentions to be sustainable. The right thing is not incompatible with the smart thing: you need both if you’re going to do the right thing successfully. It needs to be approached from a business perspective, not a CSR one.

Corporations have been given the business case for paying attention to the growing ethnic consumer opportunity to gain market share and reach their revenue goals.  One in five Canadians is foreign-born – the equivalent to the population of Quebec – and like Quebec, they need programs tailored to their different language needs, cultural nuances and buyer behaviour. On top of that, the government has targeted 1.2 million new permanent residents over the next three years, in addition to over 600,000 international students who arrive in a non-pandemic year.

The math is simple: there are a million new consumers arriving yearly who may have never heard of your brand.

The problem is that the same type of math and data is not available for the Black community.

They are rarely on corporate Canada’s target list, despite the fact that there are 1.2 million Black people across the country – what you might see as the fourth-largest non-white group in the country, some companies see as fourth in line when it comes to who they should be trying to speak to. At Ethnicity, we have implemented a number of programs for clients aimed at Black consumers, but the vast majority of the focus is still on Chinese and South Asian communities.

That creates a bit of a vicious cycle: there isn’t strong data on Black consumers because they haven’t been prioritized, but without the business facts for supporting the Black community, it is difficult to convince corporations to invest funds in advertising in Black media vehicles or targeting the Black community.

Every community has a spectrum of consumers – there are those who are financially challenged and those who are uber-wealthy.  There are those who are making minimum wage and those who are in the corner office. There are those who own large and small businesses. Some are single and some have large families. But documenting the size, location and needs of these audiences has not been done on a comprehensive basis. In order for investment in reaching Black consumers to be sustainable, it is has never been more important for corporate Canada to understand them than now.

WARC recently published an article called “Brand Activism in the Black Lives Matter Era,” which clearly articulates action steps for both brands and advertisers.

Among them were realizing that the U.S. and Canada are moving towards a general population that is more racially and culturally diversified than ever before, meaning that planning marketing efforts against a homogenous, primarily white consumer segment is no longer possible nor profitable. Addressing racial injustice is both a human rights issue and a business imperative, as consumers will vote with their wallets for brands that show more diversity in their marketing, show a bigger commitment to change and back it up by diversifying their media investments.

We wanted to turn this challenge into action.

For some of our clients, we are conducting employee listening surveys to understand the perception of diversity and inclusion within their own organizations, but it is equally important to look externally, so we are putting together a syndicated study that focuses on understanding Black consumers. A lot of research is being done on structural racism and workplace diversity, but our study will singularly focus on the missing piece of the puzzle: Black Lives Matter, and we as marketers and advertisers need to learn more about those lives if we want to address them.

Howard Lichtman is partner and co-founder of Ethnicity Multicultural Marketing and Advertising.