Last summer, after the police killing of George Floyd led to a global movement for racial justice, brands began making promises to support the Black community. Aurora James, founder of the fashion label Brother Vellies, wanted to hold those companies to their word.
On May 29, 2020, James took to Instagram, asking retailers to take the Fifteen Percent Pledge and devote 15% of their shelf space to Black-owned brands. It began as a spontaneous call-to-action, but a year later, James has evolved the Fifteen Percent Pledge into a full-fledged nonprofit with eight full-time staff members. It’s about to launch a database with 1,200 Black-owned brands for both retailers and consumers to tap into.
And in a new report, shared exclusively with Fast Company, the organization reveals the impact it has had in its first year. A total of 26 national companies have signed the pledge, including Macy’s, Sephora, and Gap. Within months of taking the pledge, these retailers were able to at least double their assortment of Black-owned brands which, in turn, allowed 385 Black-owned brands to launch their products in these major retailers. Still, these early adopters represent a small sliver of companies in the United States, and the organization has a long way to go to make an impact beyond this small cadre of pledge-takers.
“It’s been a whirlwind of year,” says James. “But we believe this could have a seismic shift by helping to close the racial wealth gap in the country. This is about more than just supporting Black founders: It’s about creating an ecosystem of venture capital, creating jobs for Black folks, supporting Black-owned marketing and publicity firms, and so much more.”
What it means to take the pledge
Until last year, James’ career had been focused on the fashion industry. When she launched the Fifteen Percent Pledge, she realized she needed to bring on experts from the activist and nonprofit worlds. One of the key hires was LaToya Williams-Belfort, who became the executive director in December with nearly two decades of nonprofit experience under her belt. The organization is funded through donations from individuals and corporations.
The nonprofit has spent the last year figuring out the nuts and bolts of what it actually means for a brand to take the pledge and how to keep them accountable. It’s free to take the pledge (companies don’t pay anything to the nonprofit), but brands do sign a contract with their commitment. “This is not just a superficial commitment that allows them to say ‘I’ve taken the pledge’ on their website and social media, LaToya Williams-Belfort, who became the executive director of the Pledge in December. “This is a contractual, legally-binding agreement. If a partner does not meet their goals quarter after quarter, we may terminate the relationship.”
That said, Williams-Belfort says the details of each contract vary a great deal, depending on the size of a company, its resources, and how inclusive it already is. The first step is to do an internal audit, to quantify how many Black-owned brands are already on their shelves. In some cases, retailers have few, if any, but Williams-Belfort doesn’t want this to prevent them from signing up with the Pledge. Instead, her team works closely with the retailer to scale up at a reasonable pace. “To really do this work in a strategical and sustainable way, it is a multi-year proposition,” she says. “Most companies work their way up to 15% over four to five years, checking in with us every six months to discuss their progress and figure out what they need to succeed.”
And while James first made this call to retailers, many other kinds of companies have signed on, including Vogue, InStyle, and Yelp. In these cases, the Pledge team customizes the contract further, focusing on issues like increasing the representation of Black people in photo spreads and in hiring.
Miriam Warren, Yelp’s chief diversity officer, says that last summer, when the Black Lives Matter protests were taking place around the country, there was a 6,500% spike in searches for Black-owned businesses, which prompted the company to partner with the Pledge to better give these companies visibility. “We’re not a traditional retailer with shelf space, but what we do have is a very large platform,” Warren says. “In taking the pledge, we thought about how we could be using our platform [to] help consumers use their purchase power to support businesses that align with their values.” The Pledge worked with Yelp to make changes to its platform, which resulted in increased exposure to more than 4,500 Black-owned businesses. Searches to Black-owned businesses spiked by 2,400% thanks to a new button that allows users to search specifically for these companies. And all of this has resulted in a 232% increase in reviews to Black-owned businesses, which can be instrumental in helping other consumers patronize them.
According to the new report, within six months of taking the Pledge, brands have at least doubled the number of Black-owned businesses on shelves. Of course, some retailers had few Black-owned brands on their shelves to begin with, so even doubling their numbers still leaves them far from 15%. But for a brand like Sephora, which had already been working to increase diversity in its product selection, doubling its selection of Black-owned brands was meaningful. In the haircare category, for instance, Sephora has already hit its 15% target. As part of the Pledge, Sephora also launched a 2021 incubator program for beauty entrepreneurs that focused exclusively on BIPOC founders of eight startups. The entrepreneurs were mentored by founders of successful beauty brands, had an opportunity to pitch investors, and will eventually launch products at Sephora.
One Black-owned brand that got its start through this incubator program was EADEM, a skincare brand specifically for women of color that has been self-funded by co-founders Marie Kouadio Amouzame and Alice Lin Glover. The brand’s flagship product is a serum designed to fade dark spots—a problem that primarily affects Black and Asian women—without harsh chemicals and without changing skin tone. Prior to the Pledge, the brand may have struggled with pitching a national retailer, given that it caters to a subsection of beauty consumers, but thanks to Sephora, the brand’s products will soon be visible to millions of consumers of all ethnicities when it launches in store later this year. “Before the Fifteen Percent Pledge, Sephora was not explicitly identifying the backgrounds of the founders, when they were deciding what brands and products to bring in store,” says Amouzame. “I’m glad we were able to benefit from this shift, because it has put us on the map and given us access to people we never would have been able to meet otherwise.” Glover also says that being connected with both the Pledge and Sephora has given EADEM more media attention, which has led to more traffic to the brand’s website.
Rent the Runway, Moda Operandi, Madewell, and West Elm all increased their assortment of Black-owned brands by at least 200%, and Macy’s went all the way up to 250%. The Fifteen Percent Pledge declined to provide figures about exactly how many Black-owned brands each of these retailers now has on their shelves, or exactly how close they are to achieving 15%. That said, it points out that 385 Black-owned businesses launched their products at these stores within the first two quarters of 2021. Until now, the Pledge has not collected data from the brands themselves about things like revenue increases or job growth as a result of these new partnerships, but it plans to do so in the future. Williams-Belfort points out that launching a product at a major national retailer can have a transformative effect, not just on the brand itself, but on entire Black communities. Scaling up often requires hiring more workers, and Black-owned businesses are more likely to hire Black employees.
The challenges ahead
The first year of the Fifteen Percent Pledge was an opportunity to lay the foundation for an organization that James hopes will be around for years to come. But it also gave the team an opportunity to assess the challenges ahead.
For one thing, it became clear early on that many Black-owned businesses don’t have the resources to meet the demands of a national retailer like Macy’s or Bloomingdale’s. A Black-owned fashion label, for instance, may be used to ordering a few hundred of each garment, but a large retailer may require thousands. This would require the brand to have both the supply chain and the cash to place a larger order.
A big part of the problem is that it’s still very hard for Black founders to get the capital they need to scale. In 2020, U.S. companies raised $150 billion in funding, but only $1 billion went to Black founders. And according to Federal Reserve data, half of Black-owned companies that applied were turned down for loans, a rate that is twice as high as white business owners.
Williams-Belfort points out that the entire concept of the Pledge gives retailers an opportunity to step in and support these Black-owned brands. Once a Pledge-taker has signed a contract, they are legally obligated to increase the number of Black-owned brands on shelves, which means it’s their responsibility to help these brands succeed. This might mean connecting entrepreneurs to venture capitalists, or offering them help with warehousing or back office support. “Every entrepreneur we spoke with talked about the support that they so desperately needed to succeed,” she says. “We’re now using these insights to help train Pledge-takers about how to welcome Black businesses.”
The other problem is simply that Black-owned businesses often aren’t as visible to retailers and consumers because they tend to spend less on marketing, advertising, or public relations than other business owners. According to the Pledge’s own research, only 58% of Black business owners sought professional services for many reasons, including cost and inaccessibility, compared to 70% of white business owners.
To this end, the Fifteen Percent Pledge is about to unveil a database where retailers can explore Black-owned businesses as they consider partnerships. Brands can apply to be included, submitting data about their revenue and funding. There will also be a consumer-facing version of the database that will allow shoppers to support these businesses directly. The database will go live this month with 1,200 businesses that have been fully vetted, but Williams-Belfort says that number should double by the end of the year.
James says it’s also important to keep encouraging companies to sign on to the pledge. When she first launched it on Instagram, she specifically asked Target, Sephora, Whole Foods, and Shopbop to sign up, and so far, only Sephora has done so. “Ultimately, there are these large companies that don’t think there is anything wrong with how they are going about doing things, and don’t want to take counsel from outside advisors,” James says. “Transforming industry is a complex, challenging undertaking. And believing in racial equity and accountability is being willing to accept that you might not have all the answers.” (We reached out to Whole Foods and Shopbop as to why they haven’t taken the pledge, but neither provided comment by the time of publication.)
James has been particularly critical of Target, which has chosen not to take the pledge, but has instead devoted $2 billion over the course of four years to the Black community. (As we reported in the past, Target appeared to mimic the Fifteen Percent Pledge’s branding when it made the announcement.) James points out that $500 million a year is a fraction of Target’s $93.6 billion annual revenue, and that devoting 15% of shelf space to Black-owned brands would be a much more significant commitment to the Black community.
“At Target, it’s been important for us to commit and act in a way that fully leverages our size and scale as a large company, beyond just the products we sell,” a spokeswoman for the company said in a written response. She explained that the $2 billion Target pledged will go beyond Black-owned product vendors and and will include companies like marketing agencies and construction companies. And she said it also builds on Target’s previous commitments, which includes increasing its representation of Black team members by 20% over the next three years and committing $10 million to support nonprofits focused on tackling systemic and structural barriers facing Black communities.
Still, Williams-Belfort holds out hope that Target will come around. “We think they should absolutely take the Pledge and ensure that their shelf space is a direct representation of their consumer,” she says.
The next generation of black entrepreneur
James and her team have their work cut out for them. While they had early successes bringing on 26 big name companies, their goal is far more ambitious. They want to obliterate America’s racial wealth gap by empowering the Black community financially and ensuring that the brands on retailers’ shelves are an accurate reflection of the diversity in the nation’s population.
While the Fifteen Percent Pledge has established systems to support Black founders and businesses, Williams-Belfort says it’s important not to underestimate how psychologically and emotionally empowering their work is. She points out that many young Black men and women simply don’t believe they can become entrepreneurs, because there are so many obstacles. There are also very few role models. But as more Black-owned brands begin popping up on the shelves of major retailers, launching a business slowly begins to seem like a reasonable path for them. “I’m a mother of two Black sons, aged 9 and 13, who are interested in entrepreneurship,” Williams-Belfort says. “I’m so hopeful that the work we’re doing with these Pledge-takers will mean that they will have many less barriers to his success.”