For the consumers of today, value shopping doesn’t mean discounts. About two-thirds of Americans (66%) say their spending is shaped by their social values, according to a McKinsey & Company survey in October.

• And 45% believe retailers should support Black-owned businesses.

McKinsey calls these shoppers the “inclusive consumer.” And as they continue to redefine the retail landscape, the consulting firm recently laid out five steps businesses can take to welcome them.

Change it up: For starters, retailers should “reshape” their shelves to diversify their product mix and elevate new brands. A prime example that pushes progress: The Fifteen Percent Pledge, which already counts commitments from more than 25 companies, including Gap and Sephora.

• Already, some retailers have doubled the number of Black-owned brands they now offer—giving opportunities to nearly 400 companies.
• Target, which isn’t part of The Pledge, meanwhile recently said 70+ of its beauty brands are now Black-owned or -founded, a 65% bump since 2020.

But getting new brands in the door isn’t enough, McKinsey notes; placement and visibility are key as well. Consider that nearly half (45%) of the inclusive consumers surveyed by the consulting firm wanted stores to make it clear which brands are Black-owned in stores and online.

Source code: Another important step to take, according to McKinsey, is to diversify supply chains. Vertically integrated retailers especially should take note to show their efforts go beyond the store.

For example, last June, Best Buy committed $1.2 billion through 2025 to expand its business operations and offer more resources to BIPOC suppliers.

• Nearly 10% of Best Buy’s annual media spend will also go to BIPOC companies by the same year, and the company plans to feature diverse actors in 30% of its paid ads.

“These actions show an increasing commitment to diversity across the supply chain, and these types of commitments will likely grow in future years as consumers begin calling for similar levels of diversity in the supply chain as they are calling for on shelves,” the McKinsey report reads.

What else? Also key is creating opportunities for inclusive brands and amplifying their voices, McKinsey notes.—KM

Since the pandemic hit, home-bound consumers have been finding solace in little luxuries. Scent has been a standout category: Fragrance sales in the US hit $954 million in the first quarter of 2021, per NPD Group, an 82% increase from the prior year and a 35% jump from 2019. Last week’s earnings reports from Coty and L’Oréal concur. The perfume craze is real.

For the second quarter ending December 31, Coty’s revenue jumped 12% to $1.58 billion. And its US prestige fragrance sales increased by more than 40%, with almost all brands—like Gucci and Burberry—contributing to the growth.

• In China, fragrance saw double-digit growth, boosted by new perfumes on the market.

Pleasure principle: Meanwhile, for its fourth-quarter and full-year 2021 earnings, L’Oréal’s sales increased 15.3% to just over $37 billion. Fragrances within its luxe division experienced a 27% YoY sales jump.

During the earnings call, Cyril Chapuy, president and general director of L’Oréal Luxe, chalked the success up to “new consumer behaviors…centered around pleasure and well-being.” It’s a hard point to argue, especially as more retailers lean into wellness, from sex toys at Sephora to Saks’ online Wellness Shop.

L’Oréal and Coty are far from the only companies cashing in on the fragrance boom. Dolce & Gabbana is bringing its cosmetics and perfume operations in-house, with the hopes of doubling its share in the fragrance sector. Even the candle company, Boy Smells started a fragrance line last year.

Looking ahead…What consumers want out of a bottle has changed. And the modern selling point, according to the Business of Fashion, smells like gender-neutrality. The idea is that you’ll catch more noses with a wider net.—JG

Today’s top retail reads.

Loose ends: Knitwear brands are tied up in fast-fashion’s knockoffs. “After all that work, for someone to just take it and then sell for like, one-eighth of the price or even less, is just insane,” said the designer of Crochet Bao. (The Verge)

Write on: Why Moleskine still looks good on paper. (Retail Dive)

Down the escalator: If yesterday’s Super Bowl halftime show is still making you nostalgic, YouTube provides another rabbit hole: the empty malls of the world. (Architectural Digest)

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

LA Rams fans are still celebrating their team’s Super Bowl win, but which retailers are celebrating their ad spots?

This year, companies had a little more fun—and there were plenty of newbies, like Sam’s Club, that hoped to make a mark.

• Of course, some—like Nike and Pepsi, for example—didn’t need to spend on ads; their logos were already plastered all over the big game. And all that in-game exposure across brands totaled $170 million, according to software company Hive.

Cut to commercial: From Amazon’s mind-reading Alexa (some might say we’re already there), to Uber Eats touting its delivery service beyond eats, to Cutwater Spirits shouting out the lazies, which Super Bowl ad was your favorite? Tell us why here.

Catch up on the Retail Brew stories you may have missed.

• Secure delivery lockers are huge all over the world. Why not in the US?
• Cole Haan introduces its first sustainable shoe, made from dandelions
• Neighborhood Goods unveils initiative highlighting Black-owned businesses