Why Diversity is Crucial for Success in Retail
Projected cultural shifts will create a need for a diverse retail workforce from top to bottom
People of color, who currently make up about one-third of the population, will become a majority by 2042. The U.S. Census Bureau also reports that the country's Hispanic population is expected to nearly triple by 2050, while African-American and Asian populations are each expected to grow about 60 percent.
Keeping up with these dynamic shifts and hiring a diverse workforce that truly represents the consumer demographic will be crucial to finding success in retail.
Currently, women and minorities are underrepresented in higher-paying retail management positions, with women also overrepresented in lower paying front-line jobs, according to research from The Aspen Institute. However, diversity does not stop at the front line and it's resulting in a disconnect between management and front-line workers. Diversity needs to run much deeper.
Here's why diversity is crucial in retail, in addition to its many benefits.
Customers feel better connected to a diverse brand
Having diversity in every aspect of a retail company ensures that decisions being made have the interest of a retailer's true diverse demographic. The Network of Executive Women (NEW) report, released in 2011, states that customers feel more comfortable doing business with companies whose employees reflect the diversity of their own communities.
A diverse workforce brings innovation
According to the NEW report, a diverse workplace fosters great innovative solutions especially in retail. It seems obvious, but diversity truly does bring all different backgrounds and points of view to the table when making decisions and the best decisions are made when they are challenged. This is particularly true for the large companies.
Forbes' "Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce" found that among companies with more than $10 billion in annual revenues, 56 percent strongly agreed that diversity helps drives innovation. “Because of our diverse workforce, we’ve experienced a boost in productivity. When you can move people to contribute to their fullest, it has a tremendous impact,” noted Rosalind Hudnell, director of global diversity and inclusion at chip maker Intel, in the report. “We have a vast amount of diversity [within the company] that comes into work every day to build technology that plays out around the world. You can’t be successful on a global stage without it,” Hudnell added.
Working in a customer service industry, it is vital that all decisions come from many different places and diversity makes that possible.
Gender diversity leads to higher revenue
Diversity does not just mean ethnically or racially diverse, it also means gender diversity. A 2014 Gallup poll of 800 business units from two companies in retail showed that companies with a gender-diverse team had a 14 percent higher average comparable revenue than less diverse business units. This is showing that diversity does not just create a better customer experience but truly creates revenue for businesses.
The Gallup poll stated that “if the gender-diverse business units are also highly engaged, financial performance improves dramatically.” Retail units that are engaged and diverse have a 46 percent higher increase in comparable revenue. Not only is this a great business case to improve revenue of retail companies but also to improve performance and engagement of staff.
Diversity may seem like a “buzzword" that is overused in the business world. "Our investments need to be 'diverse,' our backgrounds need to be 'diverse,'" but when it comes to a team and a staff, it is truly important to the success of the business that there is real diversity ― meaning class, ethnicity, race and gender. This will result in the best service for customers and a financial increase for retail companies.
Browse retail jobs in your area that embrace diversity.
Monster Wants to Know: Why do you think diversity matters in retail? Do you value a diverse retail brand as a consumer? Share with us in the comment section.