Combatting Slow Growth by Unlocking New, Polycultural Markets

Valeria Piaggio
SVP, Head of Polycultural and
Inclusivity Insights
Kantar Consulting

Rob Callender
Associate Head, Polycultural and
Inclusivity Insights
Kantar Consulting

As growth becomes more elusive and disruptions large and small erode market share from established brands, businesses need new ways to win. Increasingly, brands have become aware that growth requires reaching out to historically underserved or overlooked consumers. But why are so many brands getting this outreach so very—and very publicly—wrong?

The answer is that too many companies are talking the diversity talk without walking the walk. Successfully connecting with diverse new markets means genuinely understanding those markets. And that requires finding, hiring, and empowering a diverse and inclusive team—from the executive level to marketers, innovators, and front-line talent.

Clearly, the demographic face of the United States is changing. The youngest generation is already on the cusp of being majority-minority, and the nation as a whole will follow in just a few short decades. The facts and figures are familiar, but there’s less understanding about what this shift means for culture and commerce. The United States is rapidly moving away from a multicultural paradigm in which so-called “niche” cultures impacted “mainstream” American culture around the margins. Instead, we’re moving toward an era when diverse cultures aren’t competitors to American culture so much as they are collaborators within it. Today, polycultures coexist, interact, blend—and sometimes collide.

This development has profound implications for businesses. The white middle class has for decades been the default target for marketers—too often to the exclusion of other segments. Limiting focus to this shrinking, aging demographic essentially weds your business to the past. A more inclusive approach to brand strategy and company culture is needed to stay relevant, maintain engagement, and ultimately boost the bottom line. After all, no one knows the wants, needs, and cultural context of the demographics that will fuel future growth better than their members.

Studies have consistently shown that businesses with diverse workforces fare better and are more innovative: According to McKinsey’s “Diversity Matters” study, for example, there is a statistically significant relationship between a more diverse leadership team and better financial performance. Companies that are highly ranked on D&I reported 45 percent improvement in market share and 70 percent more success in new markets.

Inclusivity also improves employee engagement and performance: A Salesforce study found that employees who feel a sense of belonging at their company are five times more likely to feel empowered to perform their best work.

Who should be top-of-mind when considering outreach to new targets? We’ve identified several key growth demographics poised for a dramatic increase in consumer power in coming years: African Americans, Asian Americans, Hispanics, LGBTQ+, and People with Disabilities. Whether through population growth, emerging consumer power, or a combination of both, each of these segments promises to fundamentally reshape the consumer landscape.

Despite the obvious power of the diversity market in the US, however, the vast majority of consumers in these high-growth segments remain frustrated by brands that treat them as an afterthought. But there’s another story coming out of this data: even non-Hispanic white consumers express frustration when brands overlook them.

The message is clear: Everyone wants to feel included in the brand story. Brand heritage is vitally important, but don’t allow yourself to be so focused on your past that you limit your future. Create positive marketing strategies that bring people together through shared consumer values while celebrating individuals’ unique cultural heritage.

Unfortunately, we find that many brands and businesses have a serious problem with inclusivity—and most don’t even know it. While it’s easy to assume that most people who experience prejudice do so at the hands of authority figures like law enforcement, far more say they’re discriminated against while shopping or in an employment setting. Are you fully confident that your customer touchpoints and hiring practices show your brand in an inclusive light?

In an era defined by fragmentation, we also find that consumers often look to brands to act as a kind of social glue. Brands offer one of the best opportunities for creating shared experiences, and they allow consumers to telegraph shared personal preferences to others. Because of this, many marketers believe their brand’s best role is to stay neutral and not to alienate anyone.

Increasingly, however, brands are being forced into public debates whether they like it or not. Thanks to a more transparent environment, their business practices, corporate cultures, and political donations are coming under the microscope. Today, benefit of the doubt is hard to come by, and silence is often interpreted as siding with the other side—by all sides. Consumers in general—and younger ones in particular—tell us emphatically that they expect brands to take a stand on important social issues. We believe it’s important for brands to live their values, proudly and out in the open.

The best way for brands to look inclusive is to live inclusive by employing a broad cross-section of people and empowering them to share their unique viewpoints. But building inclusivity into a heritage brand can be a complicated and nuanced endeavor. Kantar Consulting’s recommendation is to look holistically at all areas of your business. Internally, your company values and codes of conduct should reflect a desire to champion civility and inclusivity in all areas. Talent is obviously a key element to the inclusivity journey, but so is offering a workspace that’s safe, accessible, welcoming, and comfortable to employees with a broad range of needs.

Externally, think beyond simple brand communications and customer service. Are your retail touchpoints accessible to all customers? How can you expand your mix of products and/or services to grant access to new customers? Brands that build inclusion into their cultures will be best positioned to build it into their business model—and benefit from inclusivity for growth.