- Patricia Neuray
Black Buying Power Matters
Over the last six months, we have seen hundreds of thousands of people take to the streets supporting the Black Lives Matter movement. And while the protests have sent a powerful message, one of the most sustainable ways to achieve lasting equity in the U.S. might be for consumers to choose to put their money where their values are. Because black spending power does matter and with black consumers spending $1.4 trillion in 2019 (which is larger than Mexico's gross domestic product), that money can lead to significant change if wielded more strategically. As Black Friday, looms in just a month, BCT Partners explores ways that black consumers, and others who support programs and initiatives to improve equity in America, can use their spending influence to fight racism and affect long-lasting change.
Support Black Businesses – COVID-19 has hit black-owned businesses incredibly hard. In fact, according to research conducted by the University of California, Santa Cruz, and another report by the National Bureau of Economic Research, 41 percent of Black-owned businesses—some 440,000 enterprises—have been shuttered by COVID-19, compared to just 17 percent of white-owned companies. Andre Perry, a fellow at the Brookings Institute, says the lack of wealth in the Black community has had an enormous impact on its ability to survive the pandemic. “Because a lot of Black business owners don’t have the kind of equity due to structural racism, they have less of a cushion to withstand this particular moment in time.” The companies that have survived need help more than ever, and consumers can be that lifeline. At the end of this blog, we provide a list of black businesses you can support.
Withhold Money From Businesses That Won’t Take a Stand - More than ever, companies face pressure from their customers to take action. It isn't enough to pay lip service anymore as consumers want to see companies putting money and effort towards solving systemic racism. In a recent poll conducted by Morning Consult, nearly 70% of the more than 11,000 people polled said that the way a CEO reacts to an issue, such as the Black Lives Matter movement, would permanently affect their decision to buy from the company. Corporations like Walmart have taken that seriously, and through their foundation, they have pledged to invest $100 million over five years to create a new center on racial equity. Microsoft has also promised to initiate a variety of initiatives: such as investing an additional $150 million in its diversity and inclusion efforts, creating a $50 million partner fund for Black-owned business partners, putting $23 million towards financing and training those partners, double its number of Black employees in senior positions by 2025, and double its number of Black-owned suppliers by 2023. These are just some of the commitments they have made, which in total add up to more than $1 billion. Another way that companies can show their support is to carry more multicultural products. For example, CVS said it's working with women and minority-owned suppliers, and it's expanded its textured hair and color cosmetics by 35% in the past year to add more items and brands for the black customer.
Buy Stock in Black-Owned Publicly Traded Companies – Not all black-owned businesses sell directly to consumers, but there are ways to support them just the same. You can invest in publicly traded companies either by buying stock or through mutual funds that include them in their portfolio. And for those that are just starting to think about investing, you might want to join an investing club to pool your money and learn through others. For a list of companies to consider supporting, go here.
The bottom line is that companies cannot afford to ignore black consumers. In addition to their sheer purchasing power, Cheryl Grace, senior vice president U.S. strategic community alliances and consumer engagement at Nielsen, says there are other reasons that companies should pay attention to black consumers as “they tend to be early adopters of new products, whether a new food item or clothing line. Black adults outpace the total U.S. population in their use of apps and spend more time on smartphones and tablets than the total population using video, audio, and social networking.” Grace continued, “They are also more inclined to share their thoughts on social media about all matters — including brands — whether for better or for worse.”
If there is one thing that we all know about American society, it’s that “money talks” and many Americans are becoming increasingly aware of the financial influence Black America has on the economy. There has never been a better time to use our voices and our collective purchasing power to create a more fair and equitable society.
Consumer Black Owned Businesses
NY Magazine -180 black-owned businesses
Etsy.com featured black owned shops