One of the aspects of writing about multicultural marketing that I like the most is when I have the opportunity to discuss relevant studies that can help marketers better understand how to invest in multicultural marketing to drive sustainable growth effectively. Recently, a new study led by Emory’s Goizueta Business School’s Omar Rodríguez-Vilá, PhD, helped shed light on a very important and timely discussion: the relationship between marketplace DE&I efforts and business growth through intentionally building inclusive practices into a marketing organization.
Rodríguez-Vilá partnered with Dionne Nickerson, PhD, of the Kelley School of Business at Indiana University, and Sundar Bharadwaj, PhD, of the University of Georgia Terry College of Business to measure the level of inclusion by brands and define the characteristics of an inclusive brand.
Below is an edited version of my conversation with Professor Rodríguez-Vilá.
Isaac Mizrahi - What was the inspiration for this study?
Omar Rodríguez-Vilá - Like many others, our attention turned to diversity, equity, and inclusion issues in the summer of 2020. But most of the focus and discussion at the time was on DE&I issues related to the workplace, such as diversity in hiring, implicit bias, etc. Yet, for some brands like Sephora, Barbie, Target, or Fenty, marketplace inclusion efforts became transformational. Seeing their work inspired us to understand the phenomenon we call "inclusive brands"—brands that grow by serving the needs of historically underrecognized consumers. We were then fortunate to partner with Sheryl Daija and BRIDGE, which was instrumental in helping us get the research done.
Mizrahi - What was your biggest learning or surprise after seeing its results?
Rodríguez-Vilá - Two points. Our country is increasingly diverse, yet that diversity is not reflected in the actions of many brands. In fact, our study found that, on average, the diversity reflected in the social media activity of the top 50 brands is 23 years behind that of our country. Coming from a discipline that is supposed to be customer-centric, the size of the lag was surprising. Second, perceived inclusion by customers can be a critical driver of choice, and with marketers being responsible for growth, we saw this as an ample missed opportunity as well.
Mizrahi - Why do you think companies still move so slowly to embrace diverse segments in America fully?
Rodríguez-Vilá - There are three critical conditions needed for marketplace inclusion. First is the diversity in the people and mindset guiding the brand strategies and actions. The more diverse the team is and the more developed their sense of empathy, the more likely it is for them to see and value opportunities in the market that others might not. We also find that leaders of inclusive brands are intentional about the role of inclusion in their business, which they make explicit in their mission and purpose statements. This leads me to the third condition—the presence of a product-specific business case. There are many general statistics about the importance of inclusion and diversity. Still, teams that generate their own understanding of how marketplace inclusion contributes to their competitiveness in the market tend to create plans and actions that are more consistent and sustained.
Mizrahi - Diversity for many marketers is still focused on ethnic background, but your study expands on this. What other diverse segments should a marketer consider?
Rodríguez-Vilá - This is a great question. I would encourage marketers not to set a goal based on representing the diversity of people. Instead, seek to serve a diversity of needs. That will help you be more specific about the role of marketplace inclusion in your business. To do so, become interested in how different conditions in people's lives might result in different needs. Then, identify the historically under-recognized communities your brand could better serve. For instance, in some product categories, like in the case of razors, racial differences are important in shaping differences in needs, yet some consumer segments were significantly underserved by the industry leaders before the launch of Bevel. In others, like fashion, the critical inclusion area may be around diverse body types or hair types. Also, the presence of physical disabilities may lead to new needs and preferences, as Barbie or Microsoft’s Xbox has reflected in their innovation over the past decade. The goal is to serve the needs of more people, with a focus on those communities that the industry has historically under-recognized. To do that, you need to be inclusive. And the more inclusive you are, the greater the likelihood to win.
Mizrahi - Some brands are feeling backlash for supporting DE&I-driven marketing programs. What would you say to a CMO concerned about investing in diverse segments?
Rodríguez-Vilá - We operate in a hyper-politicized environment where many actions by a company, not only their inclusion efforts, can be turned into points of conflict. The first thing I would say is that getting criticized is part of the reality of competing for inclusion. Avoiding it is an unrealistic goal. You can, however, mitigate the risk and reduce the impact by doing three things. First, ensure that your inclusion efforts fit your brand heritage well. Second, that inclusion considerations cut across all relevant areas in the demand chain, not just your advertising or content. Finally, have your actions vetted by experts who deeply understand the views of different stakeholders. These three actions can help you reduce the incidence and impact of backlash.
Mizrahi - Some marketers still seek one "universal insight" that can guide all their communications to all consumers (aka Total Market). However, your study suggests that underrecognized segments place inclusion as a priority in their choice for some products, which can drive tangible business growth. Why is the "one-size-fits-all" approach still so attractive?
Rodríguez-Vilá - It is an issue of economies of scale—both in terms of money and effort. Producing one product for everyone used to be more efficient than changing the product for different segments. The same goes for messages or other brand actions. Yet, that standardization vs. personalization trade-off is changing due to the advent of technology, particularly AI, which dramatically reduces the cost of customization. For instance, many companies personalize their website's landing page and user experience for individual visitors based on their history and predicted needs. The notion of a “total market” website experience would make little sense when a customized option produces better returns. As technology reduces the cost of personalization, it will also increase the economic viability of inclusion across more areas of the demand chain, reducing the role of “total market” work and increasing the value of inclusive market actions.
Mizrahi - Where do you see the state of diverse segments from a business standpoint ten years from now?
Rodríguez-Vilá - The operational and economic barriers to marketplace inclusion are falling. With the advent of technology and the access to more granular data, the cost of capturing growth from understanding and serving the needs of historically underrecognized communities is decreasing. That should enhance the attractiveness and ability to adopt inclusive business practices. Still, the motivation and mindset behind inclusion must be worked on. Ultimately, we need more leaders who are able to avoid the political framing surrounding DE&I initiatives and manage inclusion as a new paradigm for competitiveness and success in the market.
In previous writings, I have touched on the difference between DE&I and multicultural marketing, and how both are related yet distinct activities. The study conducted by Professor Rodríguez-Vilá and his colleagues will aid marketers and business leaders understand that investing in marketplace DE&I is not just a moral issue but an opportunity for business growth and ultimately, a legacy we as marketers can add to our discipline.
