In recent months, several retailers have been publicly rolling back their DE&I initiatives, leaving many brands on their shelves, and the consumers that buy them, unclear on the path forward.
Target last month announced changes that included ceasing its three-year DE&I goals, ending its Racial Equity Action and Change (REACH) initiatives this year, and shifting its “supplier diversity” team to “supplier engagement,” which it says better reflects its procurement strategy that includes small businesses. Its supplier diversity page has been taken down, though its supplier page still highlights partnerships with groups like the National Minority Supplier Development Council.
With this move, Target joined retailers like Walmart and Lowe’s, who both shifted their DE&I policies last year. These moves followed the US Supreme Court’s rulings against college admission affirmative action—which has led conservative groups to file a flurry of anti-DE&I lawsuits—along with the Trump administration’s efforts to scrap DE&I policies across federal agencies.
Target’s announcement has been met with backlash and calls for a boycott. While the impact of these changes at Target and other retailers—whether they are true values shifts, a move of self-protection against lawsuits, or a public relations strategy—has yet to be seen. Still, these moves are “a grave mistake,” Aurora James, founder of supplier diversity initiative the 15 Percent Pledge, told Retail Brew.
Supply and demand: In 2020, Brother Vellies founder James established the 15 Percent Pledge, a call to action asking multi-brand retailers to allocate 15% of their shelf space to Black-owned brands. Those that pledged include Sephora, Nordstrom, Macy’s, and Ulta. Since then, these retailers have brought on 800+ Black-owned brands, she said, creating $14 billion in revenue for those brands. The 15 Percent Pledge criticized Target in 2021, urging the retailer to sign the pledge following the announcement of its plan to spend $2 billion on Black-owned businesses by 2025.
Target did not return Retail Brew’s request for comment on its supplier diversity program changes and updates on that 2021 initiative. Ulta, which operates 500+ shop-in-shops in Target, also did not return Retail Brew’s request for comment regarding Target’s DE&I policy changes.
James said she believes retailers’ recent pullbacks feel “like PR rollbacks more than actual rollbacks in implementation,” noting selling products from minority-owned and small businesses ultimately benefits these retailers’ bottom lines.
"There’s no data change in consumer behavior, right?” she said. “We haven’t seen any of that shift over the past two years. We still are seeing that consumers want to shop with their values.”
After Target’s announcement on January 24, several Black-owned brands sold at Target, including allergen-friendly baked goods brand Partake Foods, feminine care brand The Honey Pot Company, and hair care brand The Doux, took to social media to express their disappointment.
Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.
The Doux noted in a since-removed Instagram post that “these decisions were as much of a surprise to us as they were to you,” and both The Honey Pot Company and Partake noted it was unclear how the moves would impact their retail partnerships.
Jo-Ellen Pozner, associate professor of management at the Santa Clara University Leavey School of Business, told Retail Brew that, even if the moves were made by retailers out of self-protection, a lack of messaging from retailers to suppliers about this change is “almost as dangerous as losing consumer loyalty.”
“To not understand where you stand or what your future looks like and whether you have actually been valued for yourself and the business that you do, rather than just ticking boxes—that’s a big betrayal,” she said.
Shelf un-stable: James said she feared the policy rollbacks could impact supplier diversity and minority-owned brands’ and small businesses’ willingness to work with these retailers, especially if a large portion of their consumer bases no longer chooses to shop there.
“Consumers are going to become increasingly more selective over where they spend their hard-earned dollars,” James said.
Oh Happy Dani, which licenses artwork for journals at Target, said on Instagram it is in “the process of removing our remaining products from Target shelves.” While Partake noted “we are not leaving shelves,” Tabitha Brown, who sells a Tabitha Brown for Target line and Donna’s Recipe hair care brand at the retailer, noted in a video on Instagram that she has a year remaining on her retail contract, and “then I make a decision,” she said. But she urged against a blanket boycott of the retailer in favor of supporting affected businesses.
"Don’t allow foolishness to take us into separation,” Brown said in the video, later adding, “Don’t let them take us off of shelves—don’t let them erase us.”
Should major retailers dial back their support for these businesses, they run the risk of creating shelves filled solely with products from large CPGs that don’t ultimately satisfy their customers, Pozner said.
“If we’re getting rid of small suppliers, small producers in the retail space, then we’re getting rid of that diversity of taste, because what then? We’re only left with big, homogeneous industrial producers, and then most people are not really happy with those products,” she said.