Think Tank: The Inclusion Imperative

Jill Standish

Updated Mon, June 25, 2018 at 4:30 AM UTC

Americans celebrate LGBT Pride Month each June, but retailers that regard inclusion as just an annual event are making a mistake. Passion for diversity and commitment to inclusivity are no longer just “nice-to-haves” — they have become business imperatives.

The figures speak for themselves. The LGBT community in America spent $917 billion last year, according to research published by the National LGBT Chamber of Commerce; it also found more than three in four LGBT adults and their loved ones would switch to brands known to be LGBT-friendly.

And it isn’t just that non-inclusive retailers risk missing out on customer spend: they may also struggle to recruit the best people. Research produced for the World Economic Forum warned that 72 percent of LGBT “allies” would be more likely to accept a job at a company that supports LGBT rights.

Such findings shouldn’t surprise us. Consumers want to shop with retailers that have a clear purpose and share their values while steering clear of those with which they struggle to empathize. Purpose matters to employees, too: people obviously want to be proud of their employer rather than embarrassed.

Inclusivity across the board

The issue isn’t just about LGBT rights. The pressure is on for retailers to embrace diversity and inclusion in the broadest sense. Consumers and employees expect to feel welcome regardless of sexual orientation, gender identity and expression.

Retailers should remember that, not only is inclusivity right and fair, the economics of diversity has an impact on the bottom line. Consumer and employee perceptions of a brand matter as we can see from the research and from examples in the industry. In addition, a diverse employee base brings a broader set of wisdom and ideas which makes for a more innovative workforce.

The dangers of falling short on inclusivity and diversity, moreover, have been laid bare by a series of damaging incidents in recent times. Retailers that have hit the headlines due to mishaps over sexual orientation, gender and race have suffered reputational damage and a measurable negative impact on top-line sales.

Time to raise the game

Accenture’s research suggests that many retailers have more to do around inclusion. A recent survey of managers and executives at large organizations across five industries in 10 countries found retailers consistently rated poorly on inclusion and diversity.

Across four criteria — strategic intent, leadership behaviors, actions on talent and culture of inclusivity — retailers consistently scored bottom of the pile, displaying less maturity than businesses in the consumer goods and services, life sciences, travel and industrial sectors.

How to remedy such shortfalls? We believe there are three stepping-stones to greater inclusion and diversity:

Start with talent

Retailers should measure representation at every level of the organization — at corporate as well as field leadership and in the stores. Due to the high percentage of employees that work in the store, this may skew the percentages giving a false impression of diversity.

Measuring is not a one-time exercise. Retailers would benefit from strategies to encourage greater diversity for the long-term through recruitment retention practices. Recruiting more people with different backgrounds and then retaining and promoting these staff will ultimately help build pipelines of broad-based talent over time.

One well-known retailer has recently introduced an incentive program to attract women who have dropped out of the workforce after having children, for example.

Broaden the decision-making process

It is important to celebrate the contribution that a diverse workforce makes to the business. Retailers whose brand, marketing, advertising and purchasing decisions are all made by people of one gender identity, ethnicity or sexual orientation may lack perspective on what appeals to customers who are different to them.

Even worse, these executives may stumble into embarrassing situations — and cause real offense — simply because they miss nuances that would have been obvious to another group.

Focus on local differences

National and multinational retailers serve diverse customer bases, but doing so remotely can be challenging. Stock that is appropriate for a store in a city that is primarily white may not sell well in a location where the local population includes a large Asian or Hispanic community.

It’s important to understand the diversity of the customer base and position the brand accordingly — its messaging as well as its product selection. That may require more local decision-making as well as assistance from data. Data and analytics tools that enable retailers to build a granular picture of their customers can be valuable here.

Conclusion: Talk is cheap

There are no shortcuts to inclusivity. Consumers sense when retailers are making claims but falling short in practice — and in a hyper-connected world, they can share their concerns quickly on social media.

Yet the prize on offer is a valuable one. Reaching out to every part of society will open new markets. Broadening the talent pool will boost recruitment and retention, helping your business make smarter decisions throughout. Above all, embracing these values is a crucial element of building a business with a clear sense of purpose. In a world where shoppers look for authenticity, integrity and transparency, this has never been more crucial.

Jill Standish is senior managing director and head of Accenture’s Retail practice.

Room for improvement in the retail sector

While setting out the key criteria for inclusivity, Accenture’s research outlined some of the areas where the retail industry lags behind peers — all of which play some part in holding back overall progress:

Retail employees rated their employers less favorably than those in other industries when it comes to effectiveness of sensitivity training provided at all levels of their companies. Coaching and training is key to helping people of all backgrounds feel included, welcome and valued
The sector could get better at reviewing talent pipelines and recognizing inclusivity-related accomplishments, both of which are leadership behaviors that help ensure everyone is treated equally and that everyone’s voice is heard
Retail lags other sectors at establishing effective targets around diversity and inclusion, which help embed inclusivity into the wider growth strategy
Organizations in retail are less advanced at partnering with diverse organizations and have a more limited scope of recruiting new employees.

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Think Tank: The Inclusion Imperative

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