Ulta Beauty CEO Says It’s Not Enough To Put Black-Owned Brands On The Shelves
Ulta Beauty CEO Dave Kimbell said it’s not enough for stores to put black-owned brands on shelves.
Instead, he said, the retailer wants to make sure these brands gain a following of fans and ultimately stick around.
“It’s one thing to hit our shelves, but it’s another thing to thrive,” he said. “And that’s what we want, every brand we sell – and certainly BIPOC [Black, Indigenous and people of color] founded brands.”
On Thursday, Ulta said it plans to spend $50 million on diversity and inclusion initiatives this year, including investments to build support for emerging brands. The company plans to launch an accelerator program to mentor entrepreneurs of color, invest $5 million in a venture capital fund for their start-ups, and lean into marketing efforts to introduce their products to more consumers. . This includes investing $3.5 million in in-store merchandising, such as displays that grab shoppers’ attention.
About $25 million of the annual spend will go towards company advertisements, social media campaigns and similar investments to reach beauty consumers from diverse backgrounds. Ulta plans to spend an additional $8.5 million on advertising and marketing for brands owned, run or founded by Black people.
Ulta is one of many retailers that have stepped up efforts to better reflect the country’s diversity with products offered, employees recruited and promoted, and even models featured in advertising campaigns. Along with its competitor Sephora, it is one of more than 28 companies that have signed fifteen percent commitment, an initiative that aims to make black-owned products on store shelves commensurate with the country’s black population. It is overseen by a non-profit group of the same name.
Yet retailers’ aspirations to add more Black-founded brands to their shelves pose new challenges. Many of these businesses are still new, with little access to capital and little or no name recognition.
LaToya Williams-Belfort, executive director of Fifteen Percent Pledge, said supporting founders is the crucial step for retailers as they increase the number of black-owned brands on their shelves. She said the nonprofit emphasizes the importance of not just flooding the shelves, but ensuring start-ups have a solid foundation as they grow, including access. to marketing dollars.
If retailers give founders a chance — but without other resources and tools — she said they’re setting up businesses for failure and “seeding and creating a narrative that says ‘black businesses can’t be successful.’ “.
“What the industry will see is black products don’t sell, black entrepreneurs don’t succeed,” she said. “Now you’re going right back to ideologies and systems that we all know are race-based and biased, but you’re using this supposed proof-of-concept, which was done the wrong way.”
Ulta builds on its previous investments in diversity. Last year, the retailer more than doubled the number of black-owned brands it carries, from 13 to 28. The company said it was about halfway to reaching its goal of 15% representation on the shelves.
Other retailers have launched their own efforts to support young brands. Sephora, Target and Amazon are among the companies with accelerator programs dedicated to helping early-stage startups led by entrepreneurs of color develop, test and scale products.
Ulta’s Kimbell said adding newer and innovative brands from black founders is helping the retailer win customers and increase shopper loyalty.
“These programs are not being pushed aside as a simple ‘to do’ part of our strategy,” he said. “It’s critical to our success.”
He said companies need to recognize and address the unique barriers that black founders face, including a long history of getting less venture capital. He said the retailer’s merchandising team is working closely with founders to identify roadblocks.
Ron Robinson has struggled growing up as CEO and founder of BeautyStat, which debuted in Ulta stores and on its website this week. Its brand, which includes a vitamin C serum, is carried by Bluemercury, Neiman Marcus and Nordstrom, owned by Macy.
Prior to founding the company in 2019, Robinson was a cosmetic chemist for acclaimed beauty brands like Clinique and Estee Lauder. He said retailers can play a role in helping emerging black-owned brands of today become the heavy hitters of tomorrow.
Small gestures from retailers can make a huge difference, he said. Throw samples in buyers’ bags. Accelerate shipments to overcome supply chain issues. Pay for products quickly rather than making a cash-strapped start-up wait two or three months.
He said BeautyStat got a boost from his retailers: he saw his sales increase almost instantly when Bluemercury featured one of his products in a targeted email to customers.
He said he wanted to see more retailers “be part of the brand building process”.
“It’s a win-win situation,” he said. “The retailer needs strong brands that will drive consumers to come in and buy these products and I think the real magic could happen if these two work together.”