Hair, makeup, and skin care: for billions of people worldwide, beauty products are a fundamental part of how others view them and how they see themselves. With taglines such as “because you’re worth it” and “making life more beautiful,” the beauty industry promises to enhance not only people’s appearances but also their lives.

Beauty also happens to be a very lucrative business. Over the past decade, Americans have spent more than $500 billion on beauty products. Last year alone, the US beauty industry was worth $60 billion, and with a compound annual growth rate (CAGR) of 5 percent, it’s expected to reach $73 billion by 2025.

Likewise, spending on beauty is robust among Black Americans, a diverse and growing group of 41 million people with increasing spending power. In 2021, they spent $6.6 billion on beauty. That’s 11.1 percent of the total US beauty market, lagging slightly behind the 12.4 percent Black representation in the total US population. Yet, despite significant spending by the Black community, the prospect of equity in the beauty industry, like in so many other industries, has been elusive. Our analysis shows that Black people’s experience within the beauty industry is markedly more frustrating than that of other people and filled with multiple friction points that non-Black consumers, entrepreneurs, and brands are less likely to face (see sidebar “Black beauty at a glance”).





Consider, for example, that Black brands—defined as either Black-founded or Black-owned—make up only 2.5 percent of revenue in the beauty industry, yet Black consumers are responsible for 11.1 percent of total beauty spending. Or that Black consumers simply don’t see themselves in beauty advertisements on TV, in magazines, or on billboards because of a lack of diversity in ad campaigns. Black consumers also don’t have access to quality beauty products the way that non-Black shoppers do, and when they do, it is harder for them to find the products they are looking for.

Such frustrations emerge in parallel to the experiences of Black entrepreneurs looking to make headway in the beauty sector. In theory, Black brands—whether Black-founded, Black-owned, or both—are well-positioned to serve the needs of Black consumers. But the beauty industry has not historically fostered a hospitable ecosystem supportive of Black-run businesses. Entrepreneurs often lack access to important market data and research, and there is a lack of Black representation across all levels of management among retailers, large beauty brands, and investors. Perhaps most critically, there’s a dearth of funding for Black beauty entrepreneurs at all stages of development, even when Black brands have proven to be more successful than their non-Black beauty start-up counterparts.





To better understand why the Black beauty experience is so challenging—and to dig into the massive opportunity to better serve Black consumers given their significant spending on beauty products—we conducted two surveys and a focus group about the consumer experience in the beauty sector. We analyzed retail-store placement among Black and non-Black populations and examined the placement of Black beauty products within stores. We also conducted dozens of interviews with insiders at beauty companies to hear more about their experiences (see sidebar “About the research”). And we collaborated with several prominent Black beauty industry executives to get their input as we developed our research.

In this article, we share the findings of our research and suggest a path forward. This work complements and builds upon a broader body of research conducted by McKinsey’s Institute for Black Economic Mobility to understand the structural challenges facing Black people and the vast untapped economic opportunities, including better serving Black American consumers, creating an environment where Black-owned businesses can succeed, and exploring how consumer-facing companies can invest for equity. Our analysis suggests that creating a path to a more equitable beauty market represents a $2.6 billion opportunity, and the road forward—while perhaps not easy—is clear. We describe several changes that the beauty industry can undertake, from starting with better research about Black consumers to increasing representation in the industry, from the sales associate up to the C-suite level, to better partnerships with, support of, and investment in Black brands. By taking some bold steps and opening the gates to more Black entrepreneurs who can innovate with products for Black and non-Black consumers, the beauty industry can enact authentic, permanent, and beneficial change and create substantially more economic upside in the quest for greater equity.



As with any product, the consumer should always be at the center of all considerations. As Desirée Rogers, current CEO and co-owner of both the 28-year-old beauty brand Black Opal and the 56-year-old Fashion Fair, told us, “We have to start with the needs of the consumer. They’re not only telling us what they want, but they’re also telling us where we’re falling short.” From finding out what hair, skin, or makeup products are available to seeking out a specific product, buying it, and potentially becoming a repeat shopper, the Black consumer encounters multiple points of friction throughout the entire purchasing process. These barriers include a lack of marketing, poor access to stores, limited availability of products, and poor customer service.

Video

Shopping for Black beauty products


Black consumers face challenges in finding suitable beauty products on store shelves.

Marketing. Advertising often sets the tone for the consumer experience with a beauty brand. According to a Nielsen survey, only 2 percent of the total money spent on advertising in the United States from 2011 to 2019 went toward Black-oriented TV stations, magazines, and websites. In our focus group, we found that many beauty advertisements—regardless of whether they were on TV, in print, or online—didn’t resonate with Black audiences because they neither portrayed a diverse population nor spoke to people with more melanin in their skin and curls or kink in their hair. Tracee Ellis Ross, founder and CEO of natural-hair-product company Pattern Beauty, recalls that the beauty advertisements of her childhood offered help for curly hair but didn’t do what they promised for her type of curly hair. “The marketing for hair products didn’t reflect images that looked like me, nor did the products provide what my curly and coily hair needed.”

Fewer than half of the respondents in our focus group had positive feelings toward advertisements from non-Black beauty companies, saying they did not feel represented. In contrast, they felt a much stronger connection to Black brands, responding with sentiments such as, “I feel it’s inclusive and represents me” or “It makes me think how beautiful Black people are.”

Our focus group research suggests that 75 percent of Black beauty consumers can be persuaded to purchase beauty products by ads that feature various skin tones across all races. Conversely, 75 percent can be dissuaded from purchasing a product when an advertisement does not reflect racial diversity. Our research also suggests that Black consumers have an affinity toward Black brands and are 2.2 times more likely to conclude that products from Black brands, as compared with non-Black brands, will work for them.

Lack of accessibility to stores. Many Black neighborhoods are in “consumer deserts” with insufficient access to goods and services. That means when it comes to finding retail outlets that might offer higher-quality beauty products, Black consumers have fewer options and have to travel further than White consumers. For example, there are nearly three times the number of specialty beauty stores within a mile of predominantly White neighborhoods than there are within a mile of Black neighborhoods. On average, Black consumers travel 3.36 miles to a specialty beauty store, about 21 percent further than White consumers. Black consumers also need to travel more than 17 percent further than White consumers to department stores to access expert customer service from behind a makeup counter (Exhibit 1).


Distance of stores from home leaves Black consumers fewer options for purchasing beauty products.



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I go into a drugstore right now and I cannot find my shade. Can’t find it!



Desirée Rogers, CEO and co-owner of Black Opal and Fashion Fair Cosmetics


Lack of product availability. Once Black consumers find their way to a retail location that sells beauty products, it’s hard for them to find what they’re looking for. There aren’t enough brands on the shelves suitable for melanated skin or Afro-textured hair. When stores do carry them, oftentimes, Black beauty brands are out of stock, and what’s in stock is often poorly placed on shelves. “I go into a drugstore right now and I cannot find my shade. Can’t find it!” said Black Opal and Fashion Fair’s Rogers.

Forty-seven percent of our survey respondents said they typically buy beauty products at a mass-market retailer or a grocery store, yet only 13 percent said it’s easy to find beauty products that meet their needs there. Many prefer to shop at beauty supply stores, but as previously stated, those are harder to get to (Exhibit 2).


Black beauty consumers have difficulty finding products that meet their needs at the retailers where they most commonly shop.



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Even at beauty specialty stores, which often pride themselves on the range of shades they offer, there’s a mismatch between what they think works and what actually works. “I visited with a retailer that we were trying to get into,” says Rogers. “I was told, ‘We win so many awards for our diversity. If you go into our stores, you will see we have every shade of foundation.’ I bought as many colors as close to my shade as were available. None of them worked.”

Another barrier is that even if a retailer does carry beauty products that meet Black consumers’ needs, they‘re hard to find on shelves. Seventy-three percent of our survey respondents reported that Black beauty products were often out of stock when they went to buy them. Fifty-four percent reported that when they were in stock, they were hard to find (Exhibit 3). And until recently, many chain stores kept Black beauty products locked up in cases, requiring interested consumers to jump over the humiliating hurdle of asking for permission to be able to look at the products and packaging.

When product placement is good, it can come as a surprise. One Black beauty consumer told us that when she visited a drugstore in a predominantly Black city, she was surprised to see three or four Black-owned brands with their displays at the front of the store. “I had never seen that before,” she recalled. “I saw myself in those displays and spontaneously bought a lip gloss.”


In-store shopping challenges faced by Black customers include out-of-stock and poorly placed products, as well as lack of sales associate knowledge.



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Poor sales experience. Black consumers often have a sour in-store shopping experience because sales associates lack knowledge about Black beauty products. Personalized advice is critical in influencing beauty sales, and sales associates often have the power to encourage or discourage people from purchasing specific products.

In our focus group’s experience, sales associates were not knowledgeable about products for Black consumers. Only 23 percent of our respondents said that salespeople could have sophisticated discussions about Black beauty brands and products. And only 13 percent said that sales associates could make knowledgeable recommendations for Black consumers. That may stem from a lack of diversity among store associates combined with insufficient systemized training of associates on Black customers’ needs and interests. When there is at least one Black sales associate in the store, Black consumers are almost twice as likely to find someone who provides a very or somewhat helpful answer regarding products designed for darker skin tones. One Black female consumer told us how “it’s helpful to have someone who looks like you doing the consultation and who understands what a product should look like on you.”

Even after buying a beauty product, there’s no guarantee that Black consumers’ will repeat their purchase, usually because the products didn’t work as consumers hoped they would. One consumer told us, “Finding the right item takes a lot of time, money, and effort. I’ve gone through six or seven foundation swatches trying to find one that matches, and if it doesn’t work, I’m not going to buy it again.” Black customers are 5.7 times more likely than White customers to be dissatisfied with product specialization in color cosmetics and 2.9 and 1.6 times more likely to be dissatisfied with skin care and hair care products, respectively (Exhibit 4).


Black consumers are not being offered the right products to meet their specialized needs.



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Black women can often struggle to find meaningful beauty experiences with big brands. That is particularly the case with non-Black brands. “There is heightened sensitivity around hair and skin because we were previously excluded [from these product categories],” one Black beauty consumer told us. “It’s such a personal and emotional experience and relationship that we have with the industry.”

Video: In their own words

Creating from need


Black beauty entrepreneurs fill gaps in the market while serving their communities.

Given all of the pain points when shopping for beauty products, Black consumers seem open to the possibility of switching brands for something different. Ninety-five percent of our survey respondents say they would consider switching away from their current brand. Fifty-seven percent of our survey respondents said they would intentionally refer Black-owned brands to a friend; 53 percent would recommend a Black-founded brand even if it were not Black-owned; and only 16 percent said they would recommend non-Black owned beauty brands.

In theory, Black brands are in a prime position to gain more business. Black consumers are turned off by the friction they encounter when it comes to purchasing beauty products and are also drawn to the promise of what Black brands can offer, with 83 percent of our survey respondents saying they prefer to purchase Black brands. Consumers have more to choose from than ever before, with the number of Black beauty brands in the market nearly doubling in the last decade alone (Interactive).

But the reality doesn’t seem to live up to this potential. Regardless of the type of retail store—whether it’s a drugstore, mass-market store, specialty beauty retailer, or department store—beauty products from Black brands make up less than 7 percent of what’s on shelves. The limited brand selection serves as an impediment for both Black consumers who lack choice and for Black brands that have constrained opportunities to access a broader set of customers.

Those limitations translate into reduced revenue too. Black beauty brands capture only 2.4 percent of revenue in the overall beauty market, lagging far behind the 11.1 percent of the Black consumer spend on beauty products, and the 12.4 percent of Black people in the US population (Exhibit 5). “If we know that a large percentage of Black consumers say they would prefer to buy from a Black-owned or Black-founded company, how do we bring that to life?” asks Rogers. “Because today we’re not bringing that to life. And that can’t just be placed on the shoulders of the Black-owned companies and the founders. There’s got to be some noise in the system that will allow the natural evolution for us to get to 10 percent.”


Despite their positive attributes and perception, Black brands comprise less than 3 percent of overall beauty revenues.



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When we differentiate between Black-owned beauty brands and Black-founded (but not Black-owned) businesses (see sidebar “Black-founded or Black-owned: Does it matter?”), we find that Black-owned brands struggle even more to get market share. Of the 45 Black beauty brands we identified, nine are not Black-owned, but they generate 82 percent of the total annual revenue of those brands. The remaining 36 brands share the remaining 18 percent of revenue (Exhibit 6).


More than 80 percent of Black-founded brand revenue is captured by brands that are not Black-owned.



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As a group, Black beauty brands have yet to reach their revenue potential. That’s because they face substantial impediments throughout their quest to go to market and develop a loyal customer base.

Insufficient data and research. To begin with, all entrepreneurs should utilize the research and market data necessary to develop products and build a business plan. But Black populations are often overlooked. Says Pattern Beauty CEO and founder Ross, “There’s never data to support what we need, how we shop, what we do, and what our practices are. Folded into that is unconscious bias against a vast community of people who are often invisible. Data will help support and give actual information and knowledge of who we are.”

Many Black beauty ventures are rooted in personal experience, and sometimes entrepreneurs have not received the business training that would help emphasize the importance of leveraging data. Moreover, those data are costly. Black entrepreneurs can often start out at a disadvantage because they may not have the initial capital to pay for that research. Black households, overall, have lower income and wealth. Last May, McKinsey surveyed 25,000 Americans on their views of economic opportunity. Black respondents were the most likely to say that their level of debt had increased in the previous year.

Video: In their own words

The need for better data


Black beauty entrepreneurs are often hampered by the lack of sufficient research.

Oftentimes, research or data about Black beauty products doesn’t exist. Black consumers are more likely than others to shop at beauty supply wholesale stores, which typically do not track point-of-sale data, creating a significant blind spot in available market data. As an executive at a growing Black brand pointed out to us, this can affect a brand’s valuation or ability to obtain funding: “Obtaining money is hard because there is a lack of data quantifying demand since beauty supply stores are a major distribution channel and don’t have to provide point-of-sale data.”

There’s never data to support what we need, how we shop, what we do, and what our practices are. Folded into that is unconscious bias against a vast community of people who are often invisible.



Tracee Ellis Ross, CEO and founder of Pattern Beauty


There’s also a lack of scientific research for beauty products geared to Black consumers. For decades, large multinational beauty brands were focused primarily on non-Black skin and hair. The beauty executives we spoke with told us they had trouble hiring Black chemists to do research in labs and also that there was underrepresentation of Black participants in clinical trials. “What I discovered in working hands-on with chemists is that the efficacy of products is typically based on what straight, blond hair does,” says Ross about her early days in setting up Pattern Beauty. That means there’s missing consideration for the needs of Black beauty customers, a deficit of testing opportunities for product efficacy, and no feedback loop for product improvements. “The testing done for the performance of an active ingredient is done on someone who is Caucasian or Asian 99 percent of the time,” said one chemist for a non-Black brand. “There’s rarely data validating the efficacy on melanated skin. But we’ll put that in a product targeting melanated skin anyway.”

Lack of representation. Industry networks and interpersonal relationships can make or break the future prospects of any enterprise, and it’s no different in the beauty industry. And here, representation matters—a lot. One of the challenges that Black entrepreneurs face is that they’re more likely to be excluded from receiving information about high-potential opportunities. Black representation in the beauty industry lags far behind Black representation in the share of beauty spending and the population at large: Black employees make up only a small percentage of employees in the beauty industry and are also underrepresented among employees at retailers selling beauty products (Exhibit 7).


Black employees are underrepresented throughout the beauty industry—a challenge that extends to representation at retailers that sell beauty brands.



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The implications are huge. Previous McKinsey research shows that if this current inequitable trajectory continues, it will take about 95 years for Black employees to reach talent parity across all levels in the private sector. In the beauty industry, it means that non-Black employees at large brands and retailers are deciding what brands to sell and how to help Black founders, even when they cannot relate to the Black consumer’s experience. That affects Black brands’ abilities to establish themselves, compete, and grow.

For Lisa Price, who founded Carol’s Daughter in 1993, one of the hardest things when getting started was trying to get people—whether they were potential retailers, partners, or investors—to empathize. “The biggest challenge of being a Black founder was not being able to find people who could identify with the challenge of being a Black founder. You have to figure out a way around it. You have to figure out a way to make it work. You have to figure out a way to convince people.”

One challenge? It’s harder to build relationships with retail buyers in an industry driven by informal relationships. “Connecting with a buyer is half the battle. You also need to know what the buyer is looking for,” one executive at a large, established beauty brand told us. “Typically, you’d be able to tap into your network to ensure that you show your most compelling offering.” Growing brands face a similar challenge in contracting with suppliers. This is an issue of finding suppliers who are inclined not only to work with Black brands with whom they have no previous relationships but also to negotiate fair prices for key inputs.

Black beauty brands also encounter challenges in finding high-level talent to staff key positions, partially because they are unable to lean on robust industry networks. This challenge applies throughout the ranks of a company. The lack of Black representation in the beauty industry workplace makes it less likely that products aimed at Black consumers will be stocked and adequately promoted in stores and also less likely that store associates will represent the diversity of their communities.


Person applying skincare in a mirror

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The testing done for the performance of an active ingredient is done on someone who is Caucasian or Asian 99 percent of the time. There’s rarely data validating the efficacy on melanated skin. But we’ll put that in a product targeting melanated skin anyway.



Chemist for a large non-Black beauty brand


Growing a beauty brand requires navigating a complicated set of industry-specific challenges. These can usually be solved more easily when the brand has the benefit of having encountered them previously—and Black brands frequently don’t have the benefit of mentorship or other informal networks. “It’s a challenge because you’re on a path that really hasn’t been paved. You don’t have many role models to look up to, and mentors are hard to find,” says Price. “It’s a challenge to be a founder who’s a woman and who’s Black just because it’s challenging to be that in general. The idea of the strong Black woman is beneficial and also a detriment because we never feel like we can fail. It’s always beast mode, but you can’t be in beast mode all the time.”

Another executive at a non-Black beauty brand told us how important mentorship is. “It’s not just about gaining access to capital. It’s important to understanding how you navigate the politics, get contract manufacturers, and negotiate with manufacturers, vendors, and investors. You need people who can provide insight to the fuller ecosystem.”

A hesitation among Black brands to share information with one another may exacerbate the absence of mentorship and informal networks. Often, there is no obvious forum for these discussions, and some Black brand founders see the success of another brand as one less opportunity for them to succeed. “It’s a zero-sum game,” one founder lamented to us.

Squeezed by expectations. Another challenge is that Black brands tend to be held to a higher standard by their target customer base while simultaneously being seen in a narrow and limited way by others in the industry.

In response to our survey, Black consumers expressed high levels of discernment when purchasing beauty products. They were 44 percent more likely than their White counterparts to believe quality is more important than cost and 38 percent more likely to prioritize brands to reflect personal style. Yet, at the same time, there can be a perception that products made for Black people aren’t up to snuff. As one executive from an acquired Black beauty brand told us, “Black products from most brands aren’t high quality. They don’t meet our needs and feel like they were developed as an afterthought.”

Black consumers were also over 25 percent more likely to say they’d fully explore all alternatives before purchasing a product and prefer shopping in an environment where they can have a sophisticated discussion with a sales associate and seek out better-quality products regardless of higher prices. These high expectations can prove challenging for Black brands and may be one of the reasons why they receive a disproportionately small amount of industry revenue compared with Black consumer spend on beauty products.

Video: In their own words

Challenges to building a Black beauty brand


Entrepreneurs face systemic barriers when developing products and building businesses.

Even when a Black beauty brand gains traction, the exacting expectations of Black consumers can create tension as a company’s revenues and ambitions expand. As with any enterprise, a beauty brand naturally wants to maintain a connection with its core shoppers while at the same time pursuing growth. It’s a hard balance to strike for any business—maintaining the loyalty of original consumers while pursuing bigger business goals through, say, going after valuable partnerships or potential acquisitions. When it comes to Black beauty businesses, there’s an additional risk of alienating an audience that might view you as “selling out” to a larger beauty brand that won’t pay attention to the needs of Black consumers. As one sales associate from a prominent brand noted, “Big beauty companies act like Black women will just happily buy whatever products happen to be offered to them.”

Suspicions that large beauty conglomerates don’t understand Black consumers—or the products developed for Black consumers—are not entirely unfounded. That’s because there’s also a persistent myth in the beauty industry that Black-brand products can only be sold to Black consumers. According to a former manager at a beauty retailer, “There’s an assumption that because a brand is Black-owned, only Black people will buy it.”

In fact, since Black brands are typically formulated to manage curly hair and darker skin, they can benefit anyone with those attributes, not only Black consumers. Yet, time and time again, Black beauty entrepreneurs are met with skepticism when meeting with executives from large beauty brands. As one founder of a prominent Black brand told us, “It’s like pulling teeth to get the industry to realize that these products aren’t just for Black people, but for all people with melanin in their skin or with curly hair, no matter their race.” Another founder added that her conversations with partners are full of bias. “Retailers think that prospects are more difficult for Black brands because they’re targeting a smaller market, or that the market may not be able to afford the product.”

This misunderstanding drives a persistent undervaluation of Black brands. One executive at a beauty retailer told us, “Merchants’ perspective on a Black brand’s true value to consumers is often skewed because they think that there’s a lack of opportunity if a Black brand is focused only on Black customers.”

By wrestling with exacting expectations from their core Black customers, while at the same time contending with misperceptions by the broader market, Black brands are squeezed in a way that non-Black brands aren’t and forced to walk a unique tightrope in moving their businesses forward.

The challenges that Black beauty brands face in building their businesses also extend to difficulties in finding financial support during various stages of development. “When you’re going the venture capital [VC] route, you have to be able to explain issues around race and unmet needs to people who don’t understand,” one founder of a Black beauty brand told us. “Doing that can take a lot of time and money that many start-up brands don’t have.”

The numbers bear that out. Of 213 VC-backed beauty companies, only 16 of them were Black-founded. There’s also a greater attrition rate in funding for Black brands than non-Black beauty brands. Black brands comprise 9 percent of early-stage and 4 percent of late-stage VC investments. The attrition rate for Black brands from early to late stage of support is 86 percent, compared with 62 percent for non-Black brands. That suggests a generalized unwillingness to support later-stage companies with VC funding and represents the insufficient funding that these Black brands typically receive (Exhibit 8).


Venture capital firms fund Black beauty brands at lower rates and amounts than non-Black brands.



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Even when they do get VC funding, Black brands in the beauty industry raise a median of $13 million, substantially less than the $20 million that non-Black brands raise. Early-stage Black beauty companies raise 64 percent less in venture funding than early-stage non-Black beauty companies. Funding for Black brands decreases as those companies move further along their development journey. The difference in funding between Black and non-Black brands jumps to 85 percent at later stages, when companies have proven growth and are generating revenue.

Big beauty companies act like Black women will just happily buy whatever products happen to be offered to them.



Sales associate for a large beauty brand


Despite the dearth of funding, VC-funded Black beauty ventures have a superior track record of success compared with their non-Black counterparts. Eleven years ago, Black brands represented only nine out of the 218 brands that received VC funding at the time, and they captured 90 percent less funding than non-Black companies. Yet today, the median income of those Black brands is 89 times higher than that of non-Black beauty brands over the same time period.

This inequity is likely due to systemic biases in the VC process that hurt Black brands’ abilities to raise critical funds and the result of many of the knock-on effects of a lack of funding. Those systemic biases include a geographic mismatch between the distribution of VC-funded Black beauty companies and the Black population density in certain states. For example, last year, half of total funding for Black brands went to companies based in California, which is home to only 6 percent of the nation’s Black population. In contrast, 8 percent of Texas’s population is Black, but that state has zero VC-funded Black beauty brands.

Without sufficient funding, and with weak industry-specific social networks, Black beauty brands can struggle to recruit and retain top talent, to scale up, and to operate at their full potential. Being hampered in this way makes it hard to meet the operational expectations of retailers or funders, leading to a vicious circle where the repercussions of operating below par can lead to a lack of further funding. One executive at a beauty retailer noted that they “work with one Black-owned brand that is lacking in operations. They have a really reduced staff and are always missing deadlines.”

Video: In their own words

Building equity and creating wealth


Black beauty executives aim to build a pipeline for more innovation and entrepreneurship.

The rigid and demanding expectations of retail partners often drive difficulties in scaling up. While recalling her early forays into the beauty industry, Nyakio Grieco— cofounder of the inclusive beauty shopping platform Thirteen Lune and founder of beauty brands Nyakio and Relevant: Your Skin Seen—says, “It’s devastating as a brand founder to get an opportunity to launch into a national retailer and to have to say no, because you can’t afford it. But what’s worse is to say yes, and then realize you can’t afford it.”

Additionally, consumers have said they plan to increase spending on Black-owned brands, leading to a mismatch between low supply and high consumer demands. A typical Black brand–retailer interaction begins with the brand pursuing a partnership with a major retailer to increase reach and revenue. But once the brand reaches shelves, the retailer demands the same performance metrics as larger, more established brands—and subjects them to the same penalties. The Black brand would naturally look to the retailer for guidance and support. But often, it comes up empty. The Black brand is then at risk of substandard performance, which can quickly result in discounts (the costs of which must be covered by the brand), removal from shelves, and other potential long-term damage to the brand.

Creating a more equitable ecosystem in the beauty industry is not a straightforward endeavor. Obstacles are deeply entrenched, and it may take purposeful, sustained efforts to effect fundamental change. But by addressing the pain points of both Black consumers and Black brands, the beauty industry has the opportunity to not only address deeply ingrained biases in the sector but also unlock billions of dollars in revenue.

What would it take, then, to achieve equity for Black consumers and brands in the beauty industry? Across the board—from market researchers and retailers to big beauty brands and investors—those in the beauty industry can consciously and deliberately adopt a variety of initiatives aimed at better serving Black customers and supporting Black brands more equitably:

  • Minimize the occurrence of “beauty deserts.” Retailers can more strategically locate their stores near neighborhoods where Black beauty consumers live. More equitable store placement will likely allow Black consumers to access specialty and department stores—where higher-quality beauty products are sold—more easily than they are able to do today. And that store placement should be paired with better store associate training with appropriate product knowledge and awareness of Black consumer needs. This is particularly true for customer experience: if Black consumers are assisted by sales associates who understand their specific needs and can make the right recommendations, they can purchase products that are the right fit.
  • Put more Black beauty products on shelves. Until recently, very few beauty products offered on stores’ shelves have come from businesses run by Black entrepreneurs. In some cases, there have been none. The percentage of quality Black beauty products on shelves can be increased, at a minimum, to reach parity with the share of Black representation in the US population. Founded in 2020, the nonprofit organization Fifteen Percent Pledge urges retailers to dedicate at least 15 percent of their shelf space to products from Black-owned businesses. More than 25 retailers have signed up so far. Real estate on shelves also serves as a form of advertising, which is critical to understanding and connecting with Black customers. Accordingly, as the share of Black brands on shelves increases at stores, the amount of marketing and advertising should also increase. Instead of using templatized approaches to product launches, retailers can also work creatively with smaller Black brands on rollouts to maximize reach.

Video

What beauty brands can do for Black consumers


Retailers and beauty companies have opportunities to unlock growth by listening to the needs of Black consumers.

  • Increase the number of Black beauty employees to at least 15 percent. Hiring shouldn’t just happen for entry-level jobs. For true equity and fair representation, Black employees should be hired in positions that significantly influence product placement and radiation, including product design and development, merchandising and brand management, marketing, and store operations. From top management down to the sales floor, higher Black representation at all levels in beauty companies will likely lead not only to better hair care, skin care, and cosmetics products but also to greater sales. If the top ten beauty retailers and top ten beauty houses (by revenue) increased the percentage of their Black employees to at least 15 percent—matching or exceeding Black representation in the population at large—that would lead to 60,000 more Black people working in the beauty industry. Companies can consider making these goals public, alongside public accountability measures.
  • Incubate and grow at least 500 Black beauty brands. Private-equity firms, as well as retail and beauty organizations, can further commit to scaling Black beauty brands by collectively targeting at least 500 Black beauty brands to invest in and incubate. By supporting entrepreneurs with financial investment (including funding for research), networking opportunities, and managerial advice, investors and corporations can give new entrepreneurs a space to innovate and grow under experienced guidance. This isn’t just a good thing to do; it’s also a smart thing to do. The larger corporations investing in these small companies not only get a cut of revenue earnings from their early investments but also can create a pipeline of acquisition targets. Moreover, funding and production capacity go hand-in-hand with incubation.

Just a slight shift toward more equitable treatment for Black consumers and Black brands across the beauty industry could lead to billions more in additional incremental revenue for the industry over the next few years. Black consumers spent $6.6 billion on beauty products in 2021, 11 percent of the total $60 billion beauty industry. If that share were bumped up to 12.7 percent—that is to say, at parity with the percentage of Black people in the United States—then Black consumer spend would comprise $9.2 billion of the projected $72.4 billion beauty market in 2025 (Exhibit 9). That growth is based on a projected 4.8 percent CAGR (which takes into consideration—and maybe even underestimates—population growth, inflation, and increased Black consumer spending on Black brands due to advances in equity).


A more equitable beauty market in 2025 could mean a $9.2 billion revenue opportunity from Black consumers.



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The majority of that opportunity is widely available to any Black or non-Black brand that takes a leadership role in embracing racial equity across the industry. Black brands—both Black-founded and Black-owned—would in particular benefit from a more equitable market, increasing overall Black brand share from $1.5 billion (a 2.5 percent share of the total market in 2021) to $3.7 billion (a 5.1 percent share of the total market in 2025), which is inclusive of Black-owned and Black-founded market share.

Aside from being put under extraordinary pressure to conform to externally imposed standards, Black people seek to find an authentic connection or sense of joy from their interactions with beauty products. Greater representation, inclusion, and equity are long overdue for Black beauty founders, owners, and consumers as they take their rightful place in the beauty industry. It’s both smart and the right thing to advocate for equity: that includes advertising more carefully to Black consumers, geographically distributing Black products more equitably to make them accessible to consumers, educating store associates on Black beauty needs, and achieving better placement of Black-focused products in stores. Leaders across industries, from retail and consumer goods to investment communities, must accelerate the push for advancement and invest in the future of the Black beauty industry.

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