Can you retain diverse customers without commitment to ESG? - Business Leader News

Can you retain diverse customers without commitment to ESG?

In this guest article, Sadia Corey, Vice President of Client Development at Savanta, discusses the need to embrace DEI to attract a diverse customer base.

With the world becoming ever more conscious of environmental, social and governance issues, businesses should be asking themselves what impact falling short of customers’ expectations will have on their brand.

Brands must recognise and embrace the concept of intersectionality, which acknowledges that individuals’ identities are shaped by a multitude of intersecting factors, such as age, race, gender, sexual orientation, ethnicity, ability and socioeconomic status. By understanding and incorporating this concept, brands can engage more effectively with diverse groups – and their allies.

If you can achieve this, you can reap the rewards in terms of brand loyalty, market share and social impact. But, as our recent report – Understanding Bias, Discrimination and Its Impact on Society – reveals, those who are not able to embrace the idea of intersectionality and apply it to their brand and understanding of customer beliefs and behaviours are at risk of being boycotted.

Nearly three in 10 (28%) UK adults are unwilling to buy from brands that are not committed to diversity, equity and inclusion (DE&I) – a large enough proportion to do some serious damage to your bottom line. Committing to DE&I does not just mean showing your support for initiatives or social causes outwardly, it means practising what you preach and creating a safe environment for both your customers and employees.

    Those from under-represented groups are even more likely to shop elsewhere to contribute to behaviours or causes they disagree with – whether those behaviours relate to their own identity or not. Almost half (47%) of consumers from a Black background and 37% of the LGBTQIA+ community would boycott a brand.

    Understanding the experiences and behaviours of marginalised groups is not enough, you need to act on this knowledge and commit to enveloping it into your business. By proactively integrating inclusivity into your strategy, you can not only avoid tokenism and cultural appropriation but also create experiences that authentically represent and celebrate the diversity of your consumers, establishing a foundation of trust and loyalty. Nike is a shining example of this; following years of campaigns, backed up with hard work, commitment, and impactful activity – they make people feel supported and like they belong, which is taking their business from strength to strength.

    Those who don’t act could lose out in an increasingly competitive and fragmented market, especially with consumers being more careful about where they spend their money due to the cost-of-living crisis. It’s clear that ethical consumerism is gaining momentum, with nearly a quarter (23%) of consumers admitting that they feel negative towards brands that stay silent at important social moments, increasing to 41% amongst people from Black backgrounds and 35% amongst the LGBTQIA+ community.

    Responding to social moments and actively engaging in conversations around inclusivity can help demonstrate your commitment to social progress and help you connect with socially conscious consumers who are increasingly seeking products and services that align with their values. There is risk involved, particularly when you take a stand on sensitive issues, as you could alienate segments of your customer base that hold different viewpoints. Preparing for these challenges by engaging in thoughtful and empathetic communication, demonstrating transparency and remaining committed to your brand values is critical.

    Standing up and showing support externally is not the only thing brands should be thinking about. Consumers want to know that your commitment runs deep, and is embedded within your corporate culture. Two in five (38%) consumers will not buy from brands that do not treat their workers fairly – with those from under-represented groups more likely to take a stand. People want to know that their purchasing choices are not contributing to harmful behaviours.

    The brands that fail to embrace DE&I and recognise the importance of intersectionality risk losing relevance, market share and the opportunity to create a lasting impact. It is not only an ethical choice but also a strategic necessity, particularly as the spending power of Gen-Z and Millennials – who tend to be more ethically conscious – grows.

    By acknowledging and incorporating the diverse identities and experiences of their consumers, brands can foster authenticity, establish meaningful connections and expand their market research. Moreover, embracing DE&I enables brands to be agents of positive change, shaping societal attitudes and contributing to a more inclusive world.