What can we learn from the Black Pound Report? - Business Leader News

What can we learn from the Black Pound Report?

Following the publication of the Black Pound Report 2022, the UK’s most comprehensive research into the multi-ethnic consumer, Business Leader spoke to several experts to find out we can learn from its findings.

One of the most significant findings of the report is that up to £4.5bn of Multi-Ethnic consumer’s disposable income is being ignored by big brands and British businesses. This is an incredible amount of money, so why are UK businesses ignoring it?

Sharla Smith, Diversity & Inclusion Consultant at the EW Group, offers several reasons.

She explains: “This is because businesses and brands have biases (unconscious or conscious) embedded in their operation. Additionally, marketing strategies can have an impact as brands can determine what constitutes as beautiful, and brands are not as inclusive as they can be.

“Another aspect that ignores multi-ethnic consumers is design: product ingredients and cultural education. Think about the design of clothing – who is it aimed at? Brands fail in considering all body shapes. The products available in the market also don’t consider multi-ethnic consumers. For example, some hair products and ingredients aren’t always beneficial to my hair type. In 2022, I can walk into a leading hair salon in London, and they are not equipped to do my hair.

“These are just a few examples that exclude multi-ethnic consumers, but maybe the real question is why have businesses and brands ignored multi-ethnic consumers outside of our economic power? And for that, you’d have to ask them.”

With businesses ignoring such a hugely significant market, there are big questions over what needs to happen for this to change. Sharla Smith thinks diversification is important.

She continues: “At its root, if brands and businesses want a ‘slice of the £2.7bn pie’ that Black, Asian and multi-ethnic consumers (the global majority) spend on health and beauty products, they must diversify each team in each department throughout their organisation.

“The elephant in the room is that many businesses are scared to do this, and so ignore it – but by not diversifying your organisation, ‘we’, the multi-ethnic consumer, will be forced to take our business elsewhere.”

Achille Traore, CEO, White Label Loyalty, offers us another suggestion for how to tap into this market.

He comments: “It’s always important to understand your target audiences and the segments within them. The Black Pound Report makes a valid point: curating campaigns that speak to the whole audience, rather than just one portion, brings more ROI. That’s because connecting with a wider consumer audience helps your campaigns get a broader reach.

“At the same time, however, it can often be difficult to create a message that resonates with everyone. Instead, championing each segment’s values in customer engagement efforts (including communications, social media and even loyalty programs) that are well personalised and targeted increases customer retention and loyalty.

“I’d recommend starting with a well-defined data capture strategy and then look at tools that help you curate the right message for the right audience. Such an approach should leave no space for ignoring any part of your customer audience.”

Health and beauty bias

Another one of the significant findings of the report is that 22% of all multi-ethnic consumers need to go to specialist shops to get all their health and beauty products, and this increases to 30% for black women.

We spoke to Ricki Lawal, the owner of Selfmade Candle, who offered her thoughts on this finding.

She comments: “I’m not surprised that 30% of black women choose to shop at specialist suppliers, I am one of them. Bigger corporations often lack adequate diversity in their product ranges, and we’ve only recently seen brands try to acknowledge this gap and tap into the ethnic consumer.

“This shift has been prominent in the cosmetics industry with the rise of black-owned businesses, such as Beauty Bakerie or Juvia’s Place, leading the way and larger conglomerates recognising the benefits of catering to the minority.

“Brands should, however, understand that being inclusive isn’t a ‘trend’ or a ‘bandwagon’ which they can hop onto as and when they please; being inclusive is a commitment and this inclusivity needs to manifest itself in all aspects of a business, rather than just within a company’s product offering.”

Are big companies doing enough to support black-owned businesses?

One way for larger corporations to diversify their product ranges is to partner with more black-owned businesses that are creating products for black consumers. However, such partnerships are not a one-way street, and there are potential gains for large corporations and the business owners themselves.

When we asked Ricki if she felt it was important as a small black-owned business to be supported by bigger brands in order to gain recognition, she responded: “Yes definitely, I was recently supported by Bumble’s Black-owned Small Business Grants and won a share of £50,000 to support my brand, Selfmade Candle.

“I hosted my first pop-up store in January and the Bumble grant will allow me to plan even more – I’m always excited to meet my customers and learn more about them to ensure my products are aligned with their needs.

“Even with the prevalence of social media, there’s nothing quite like launching in a physical retail store chain to develop brand awareness and gain recognition. The simple truth is that it’s still extremely difficult for black-owned businesses to get their foot in the door of large retailers. This is in part to factors like having relationships with buyers and having decision-makers who’ve used and can champion your product.”

At the moment, there are no black Chairs, Chief Executive Officers or Chief Financial Officers in any companies on the FTSE-100. The percentage of black executive and non-executive directors at FTSE-100 firms has also worsened in recent years, slipping from 1.3% in 2014 to 1.1% in 2021. So, if company boards were more diverse, there would be more decision-makers available to champion the products of black-owned businesses.

“This support isn’t one-sided, however,” continues Ricki. “Collaborating with start-ups is also incredibly useful for traditional businesses – smaller creators will have new and alternative opinions to offer which will elevate your business further.”

Is there reason to be optimistic in the future?

With the Black Pound Report evidencing a strong need for change, particularly in the health and beauty sector, we wondered if businesses were doing enough to provide optimism for the future.

According to Sharla Smith, companies are beginning to implement training, but this may not be enough to address the big issue at hand.

She comments: “Businesses are navigating ‘the trends’ by implementing Diversity and Inclusion training and seeking to become more ‘culturally aware’.

“However, the disappointment of not being thought about by brands has been in existence for Black, Asian and multi-ethnic consumers for so long now, that unless businesses rapidly address whiteness being synonymous with ‘normality’, they potentially may lose even more parts of that pie.”

Ricki Lawal, however, is optimistic for the future off the back of the report.

She comments: “Data being released by organisations like the Black Pound Report always helps. Whilst an emotive subject, it’s very difficult for decision-makers to argue against data.

“There’s money being left on the table by not proactively serving a high spend minority. I’d like to see this report acknowledged by decision-makers and help to inform them when seeking new product lines to test in stores and in sourcing new businesses to support.”