Forbes + CommerceNext: Sephora Shows How Inclusivity Is Good For Business

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ARTICLE SUMMARY:

Over the past year, our country begun confronting racial injustice and racial bias, and brands have been in the hot seat to implement new changes. Sephora emerged as a leader in fighting racial bias in the retail industry, being one of the first to develop a comprehensive plan to make internal and external changes.

CommerceNext Co-Founder Veronika Sonsev interviewed Deborah Yeh, CMO at Sephora to discuss Sephora’s long-standing dedication to diversity and inclusion initiatives, including a study they conducted last year on racial bias in the industry. Most recently, they made commitments to: double the number of Black-owned brands carried, tighten their SephoraAccelerate program to serve BIPOC-founded brands, make marketing efforts more accessible both in front of and behind the camera, create content that is accessible to BIPOC customers and much more.

All their plans go to show that inclusion is accessible and achievable for all brands. Not only is it the right thing to do, the interview also highlights that inclusion can be good for business because it helps serve a part of your customer base historically underserved in retail. With more and more consumers expecting brands to take a stance on social justice, Sephora’s efforts will inspire you to take those extra steps towards creating a more inclusive industry.

This article was originally published in Forbes: Sephora Shows How Inclusivity Is Good For Business. You can read more of Veronika’s articles here and dig in deeper by reading the full article and interview below.


 

Two in five retail shoppers have personally experienced unfair treatment on the basis of their race or skin color, according to a new study released by Sephora, and racial bias is something the retail industry cannot afford to ignore. Plenty of companies increased their focus on diversity, equity and inclusion (DEI) in the last year, but none got out in front of these issues quite like Sephora.

Wanting to lead by example, Sephora put forth a comprehensive plan to make the company more inclusive—it was the first large retailer to take the 15 Percent Pledge (to commit a minimum of 15% of their brand assortment to Black-owned businesses) and recently launched an industry initiative to combat racial bias in stores.

Given the Sephora team’s commitment to this effort, I was excited to interview Sephora CMO Deborah Yeh at the 2021 CommerceNext Marketing Summit Series to learn more about their DEI initiatives. We spoke about the changes Sephora is implementing to build a more inclusive retail environment for their employees and clients, as well as opportunities for the broader retail community. However, my personal “aha” moment came when Yeh pointed out the added economic benefit of being inclusive. It’s not just that diverse teams are more innovative, creative or agile; being inclusive allows you to also serve a broader set of customers by understanding their needs and making them feel welcome.

You can read the interview below or catch the replay on YouTubeThis interview has been edited and condensed for clarity.

Veronika Sonsev: Can you provide an overview of Sephora’s efforts and explain why DEI is so important to the company?

Deborah Yeh: Diversity, equity and inclusion have always been priorities at Sephora. Sephora came to the states to be a new kind of beauty company that allows consumers to browse and explore prestige beauty freely without putting it behind a glass panel. Inclusivity has always been one of our values, but we haven’t necessarily talked about these beliefs publicly.

That changed in 2019 when we started a campaign called We Belong to Something Beautiful, which was meant as an external ongoing articulation of our values and commitments to the industry, to our employees, to our clients—that we never stop working to create a beauty store where everyone feels like they belong.

Sonsev: With regard to the broader retail community, you just recently announced a large initiative to combat racial bias in stores. Tell us about that initiative.

Yeh: We know that racism, unfortunately, affects nearly every institution in society and retail is not immune. A couple of years ago, we encountered a poll from Gallup that reported Black Americans were more likely to experience unfair treatment in retail establishments than in their dealings with the police.

While this was totally disheartening, we saw this as an opportunity. Guided by our commitment to create a more inclusive retail experience, we set out to better understand and address the issue. We recently commissioned and just announced a first of its kind study on the state of racially biased treatment in US retail. We found that retail is riddled with racial bias, with two out of five shoppers saying they’ve experienced poor treatment due to their race or ethnicity.

Our research team, led by Dr. Cassi Pittman-Claytor and Dr. David Crockett, provided us with a conceptual map of how this racial bias plays out for people of color in retail stores: If the shopping experience is a road, there are some travelers who experience an extra tax or an extra toll that blocks their way. This translates into a spectrum of subtle and non-subtle biases, from certain products being “hidden” in the ethnic aisle to being underserved with product choices to feeling watched or treated suspiciously. Ultimately, our goal was not only to measure the problem but also to start identifying tactics that we, as a retail industry, can implement to create an environment that serves all of our customers.

The study identified places where we could all work to improve the experience for shoppers of color. Some of those things include: offering timely assistance to people looking for help, freely sharing information about offers and new products, understanding the unique needs of our shoppers of color and having employees that look like our whole community and can communicate in all the languages that are necessary. We are using these findings to guide a pretty robust action plan for our own organization, but we also hope that other retailers will be intrigued by these results and really invest in learning more to come up with an action plan that’s relevant to them, as well.

Sonsev: Sephora was one of the first retailers to take the 15 Percent Pledge–only 9 days after Aurora James posted the challenge on Instagram. What drove the company to participate and take a leadership role here?

Yeh: Aurora James is an amazing contact and colleague of ours at Sephora. She actually started an entire movement with just one Instagram post. The Instagram post was a simple Post-it with a handwritten note: “OK, here is one thing you can do for us…”

We answered the call quickly because of our commitment as a company to build a more inclusive beauty community. We knew we could make a difference in the kind of brands successfully brought to market.

With that said, our ongoing commitment isn’t about quickly signing new deals. We’re diving into the full procurement process and looking at how we scout for brands and how we partner with them in the long term. To give you an example, we had the SephoraAccelerate program, which was originally founded to cultivate female founders. We actually tightened the focus of that program to focus on BIPOC-founded brands. The program offers a robust curriculum, which includes mentorship, merchandising, support, potential funding and even introductions to the investor community so these founders can be supported by and part of a thriving ecosystem.

We reviewed hundreds of brands since our original pledge and we are excited to be able to share that, by the end of this year, we will double our assortment of Black-owned brands.

Sonsev: What actions are you taking to measure the performance of your programs and reporting back on your progress?

Yeh: Measurement is a huge part of our effort. One of the first things we learned through our research is that traditional retail measures around customer satisfaction or NPS [net promoter score] may not be tuned in enough to fully monitor what’s happening in terms of inclusion in retail, as many incidences of bias go unreported. We’re implementing a new in-store dashboard that’s going to help us provide analytics on client service and feedback to our stores on a monthly basis, as well as to measure employee training, participation and efficacy.

Internally, we made inclusivity a priority for every corporate employee by evolving our employee performance reviews to include new, inclusivity-based performance metrics. This can vary from person to person depending on their scope. For instance, supervisors can create more inclusive team cultures and focus on their hiring practices. Individual contributors can get involved in any of our task forces implementing some of our DEI plans. We plan to publish our findings and results bi-annually on our website.

Sonsev: How has diversity, equity and inclusion been incorporated into your marketing campaigns?

Yeh: Within marketing, our actions are to increase representation and promote inclusivity before shoppers even enter our stores. It’s all about consumers being able to see themselves reflected in a retailer’s marketing and we’ve always aimed to create inclusive images. We’re implementing new production guidelines to ensure that creative decisions reflect and uplift our communities.

We’re also expanding the breadth of our content to meet every client’s unique needs. For example, we are publishing how-to videos on topics like: finding a sunscreen that doesn’t create a white cast on dark skin and infrequently covered techniques like doing a smokey eye on an Asian monolid. We’ve also implemented more closed captioning and expanded the library of Spanish language tutorials on our YouTube channel, as well as Instagram videos.

We even relaunched our Beauty Insider loyalty program just this last year, adding a feature where clients could donate their points. We chose a set of charities and nonprofits focused on fighting for inclusive communities and, in six months, we accumulated more than two million dollars worth of donations.

Sonsev: You mentioned how diversity is included in the goals of all of your employees, whether they’re leaders or individual contributors. How are you recruiting to ensure that you have a diverse team as well as promoting diverse executives in house?

Yeh: We want to make sure that we have a field level workforce that reflects our communities. To accomplish these goals, we’re going to be broadening our recruitment and career advancement processes for employees of color by providing new resource toolkits for hiring managers. We’re also expanding our existing partnerships with associations dedicated to the advancement of employees of color. Lastly, we want to identify key markets for recruiting events so that we can increase our representation.

Later this spring, we’re rolling out some exciting new emerging talent programs to make sure that we’re not just placing diversity into the organization, but we are elevating folks and setting every individual up for success.

Sonsev: We frequently see that DEI leads to business success. What business benefits to DEI may our audience not be thinking about?

Yeh: I’m reading a lot of the same studies that you are—a lot of them do point to how organizations who are DEI focused are more innovative, creative and agile. I believe in all of these things, but I’ve also been in business long enough to know that not leaving money on the table can be very motivating for companies as well. And our data did show that racially biased and unfair treatment ultimately cost retailers a great deal of revenue. Our study showed that three out of five BIPOC shoppers are unlikely to visit that specific location again and two out of five are unlikely to visit any outlet of that store after experiencing racial bias.

As an industry, if we can obsess about things like page load time and cart abandonment and SKU optimization, we surely have enough time and energy to think about an issue that so deeply affects all of our consumers. When considering the total potential audience of our products and services, we should first think about whether we are welcoming everyone to try out our retail establishment, and then investigate whether we are engaging them and rewarding their loyalty.

I believe it’s possible to strive to make retail a more welcoming and inclusive place for everybody—and I hope the industry joins in. It’s a lot of hard work. We will probably always be at it, but it’s worth it.

To get more insights like these, join us for our upcoming virtual events and apply to attend CommerceNext IRL today. The conference will take place on September 28-29, 2021 in NYC. Inc.com named CommerceNext one of "Top 5 ECommerce Conferences for 2019 and 2020." We hope you will join us for an upcoming event.

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