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In late May and early June, as much of the U.S. broke out in protests over the killing of George Floyd by a police officer, retailers rushed to affirm that their company values stood against racism.

There was a flurry of brand statements to that effect, though some responses stood out more than others. Nike released an ad campaign that entreated its customers to help stop racism in America. It centered on a reversal of the iconic "Just Do It" slogan, using five words to mark a contrast from its usual ads: "For Once, Don't Do It."

Rival Adidas retweeted the video and many applauded both brands for standing together against racism. Then came the backlash.

Nike's ad was seen by some as exploitative, rather than uplifting, and Black employees at Adidas formed a coalition to request changes at the German sportswear retailer, according to Footwear News. In an emailed statement at the time, an Adidas spokesperson told Retail Dive the brand was "deeply saddened" by events in the U.S., and that all leaders at its global headquarters and in North America had attended "educational sessions to understand and learn how to lead through this crisis."

"We're listening. We recognize that we have not done enough, and we are dedicated to doing more," the statement read, noting that the company was working closely with "a coalition of Black leaders" to establish goals.

The result was a list of quantifiable actions Adidas would take, including investing $120 million in Black communities through 2025 and filling a minimum of 30% of all new U.S. positions at Adidas and Reebok with Black and Latinx candidates. Half of all new positions will be filled with "diverse talent," which is inclusive of all diversity categories, according to a statement the company posted on Instagram. That response quelled some of the criticism Adidas faced, but many employees were still disappointed in how the company handled the situation, according to The New York Times.

Nike, too, built upon its response over time, announcing on June 5 that it would donate $40 million over the next four years to support Black communities in the U.S. The Jordan brand went further. In partnership with Michael Jordan, the brand pledged $100 million over the next 10 years to organizations fighting for racial equality, social justice and access to education. Nike also moved to make Juneteenth an annual paid company holiday.

The backlash and resulting action taking place at top athletic brands is a microcosm of an issue that's being tackled with renewed force in just about every area of retail as a result of the protests. It's led companies to change the name or imagery of iconic brands like Aunt Jemima, and take a closer look at the makeup of their executive teams. But cosmetic changes brands make are easier to track than the progress they're making in diversifying leadership. Few publicly provide any statistics about racial diversity.

And while the protests have resulted in more direct action from brands on racial diversity, corporate America was not prepared for it going in.

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"They treated this as though it was a similar moment to ones we've experienced time and time and time again — that you could donate your way out of," Donnie Broxson, CEO of multicultural marketing agency Acento Advertising, said. "This isn't a moment. This is a movement that is going to be much longer-lasting and so the response has to be far more meaningful."

'If you included us earlier, you wouldn't be in this situation'

One of the first mistakes brands made was rushing out a statement on a topic that necessitates deeper reflection. Ari Lightman, a professor of digital media and marketing at the Heinz College at Carnegie Mellon, called it "purpose washing" when a company latches on to a cause without understanding or appreciating the full meaning behind it. It's come up for a diverse set of issues, including in relation to sustainability, where it's often called "greenwashing."

Lightman said that reacting to the protests in real time required a faster turnaround for marketing teams, which in turn meant brands lost the luxury of focus groups and other methods of testing out their campaigns, but putting out a statement just to have the brand's voice heard was not the solution.

"Understanding the plight of a large percentage of the population that feels disenfranchised — it's going to take a lot more than nice platitudes and a donation of investment when you're a multimillion-dollar corporation," Lightman said. "These things, they're nice to see, but kind of ring hollow."

Saying nothing was not a strong option for retailers either, but the variance in statements also served to highlight which companies had been thinking about diversity and inclusion prior to the protests, and which ones had not made it a priority, said Michelle Ngome, president of the African-American Marketing Association. Ben & Jerry's, which waited until June 2 to make an official statement, has been praised for its response to the protests, which called for dismantling white supremacy.

"Intentions are only intentions — they need to be actions."

Donnie Broxson

CEO of Acento Advertising

Ngome said the company "blew it out of the park" in its response, but there was an important reason for that: They had been engaging with the Black Lives Matter movement for years. This was not a moment where they chimed in to sound relevant.

"If you included us earlier, you wouldn't be in this situation," Ngome said of brand responses that were met with criticism. "Some companies are struggling with those statements because they haven't practiced their diversity and inclusion initiatives."

She also highlighted the importance of the language brands use, and the necessity — in a meaningful response — to specifically state that the company agrees that Black lives matter.

Even if a company knows they have work to do, its response could be made better by admitting that, Broxson said, and using the protests as a chance to reflect on the progress that needs to be made. Some responses to the protests have done that. Founder and creative director of accessories brand Brother Vellies, Aurora James, advocated for concrete change with her 15% pledge, which encouraged retailers to take stock of the number of Black-owned brands on their shelves and increase the percentage.

Problems stem, in part, from a lack of prioritization of diversity and inclusion in leadership and how infrequently it is reflected in marketing campaigns. Launching one well-timed campaign with people of color in it is not enough when people of color do not feature regularly in your marketing, Broxson said. Instead, companies should be talking about diversity "every day."

"Until merit is driving executive decisions [and] executive promotions, rather than comfort, then it still needs to be discussed," Broxson said.

"There are more good intentions out there than we can easily recognize right now," he added. "But the intentions are only intentions — they need to be actions. They have to be in how we operate, how we function and make decisions and plan against an uncertain future."

We've been here before

The athletics space has faced allegations and complaints about diversity and inclusion before. Nike was the defendant in a class-action lawsuit filed in August 2018, which alleged a toxic work culture for women, and was hit with a racial discrimination lawsuit by a former employee in 2019 just six months after the debut of its Colin Kaepernick ad. Executives also were named in a 2019 shareholder lawsuit alleging they knew about the toxic culture of the company. Both with regards to its treatment of people of color and women, the retailer has come under fire for the its alleged championing of one thing while practicing another at its corporate headquarters.

Under Armour, too, faced a racial discrimination suit in July 2019, and in December the year prior faced criticism for a corporate culture that allowed executives to charge adult entertainment and gambling to corporate cards.

In response, athletics retailers have given pay raises, fired executives and committed to different initiatives. In a recent letter to Nike employees from CEO John Donahoe, he called it the retailer's "most important priority" to "get our own house in order." In the letter, a copy of which was sent to Retail Dive by the company, Donahoe called for further changes to the retailer's culture and noted that "Nike needs to be better than society as a whole."

Nevertheless, having employees speak out against the company they work for is dangerous for brands. It may signal to consumers that companies aren't following their own corporate values.

"Your largest advocates are your employees, and potentially your largest detractors could be your employees as well," Lightman said, noting companies need to pay attention to when employees call out practices that go against the corporate mission.

Adidas has faced employee complaints for years over racial diversity at the company, and critics have noted the brand's heavy reliance on partnerships with Black cultural icons like Kanye West and Beyoncé. Many of those concerns came to a head during the recent protests. Adidas laid out hiring goals to bring more people of color into the business and it posted a statement about the impact the Black community has had on its success.

"First, we need to give credit where it's long overdue: The success of adidas would be nothing without Black athletes, Black artists, Black employees, and Black consumers. Period," the retailer said in a recent Instagram post.

"We've celebrated athletes and artists in the Black community and used their image to define ourselves culturally as a brand, but missed the message in reflecting such little representation within our walls," the post said.

Measuring diversity at athletics retailers is a task easier said than done. Nike publishes a yearly impact report, which tracks gender and racial representation across its employees, board of directors and leadership, but hardly anyone else does the same. Of a group of eight retailers that Retail Dive reached out to, five gave statistics on gender representation at their companies, but only two would provide statistics on racial representation.

The percent of people of color at sportswear brands

Retailer

U.S. leadership

Board of directors

U.S. employee base

Adidas

No data

No data

No data

Gap, Inc. (owner of Athleta)

31% (store management)

15%

55%

Lululemon

No data

No data

No data

Nike

25% (Directors) 21% (VPs)

31%

56%

Outdoor Voices

No comment

No comment

No comment

Puma

No data

No data

No data

Skechers

No comment

No comment

No comment

Under Armour

No comment

No comment

No comment

Nami Sumida/Retail Dive

Lululemon plans to publish an impact report by the end of 2020 that shares demographic data. The company already updates gender pay equity statistics annually. It should be noted, too, that German-based retailers like Puma and Adidas are prohibited from tracking race at their headquarters due to German employment law. Neither provided statistics for the number of people of color in U.S. offices.

Under Armour CEO Patrik Frisk reportedly vowed to improve the racial diversity of its management team, but the company did not respond to repeated requests from Retail Dive for information on the diversity of its staff. Nor did Skechers.

At Nike, which does break down company statistics on diversity, 56.3% of U.S. employees were non-white in 2019, while 42.6% were white. However, the representation of people of color decreases significantly in the retailer's director and vice president roles.

The retailer's directors are 72.7% white and 24.6% non-white. Black or African American employees account for 4.8% of directors. Of the retailer's vice presidents, 77.1% are white and 21.2% are not. Black or African American employees make up 9.9% of vice presidents.

Employee diversity at Nike in 2019

All employees

Directors

VPs

Board of Directors

RACE (U.S.-only)

American Indian or Alaskan Native

0.4%N=140

0.2%N=8

0%N=0

0%N=0

Asian

9%N=3,060

11%N=512

5%N=18

0%N=0

Black

22%N=7,370

5%N=224

10%N=34

31%N=4

Hispanic/Latino

19%N=6,521

5%N=243

3%N=11

0%N=0

Native Hawaiian or Other Pacific Islander

0.7%N=239

0.2%N=10

0%N=0

0%N=0

2+ races

6%N=1,894

3%N=156

3%N=10

0%N=0

Non-white

56%N=19,224

25%N=1,153

21%N=73

31%N=4

White

43%N=14,559

73%N=3,408

77%N=266

69%N=9

GENDER (global)

Female

49%N=33,030

41%N=2,661

39%N=161

31%N=4

Male

51%N=34,808

59%N=3,853

61%N=252

69%N=9

Data related to race are for U.S. employees, while data on gender encompass employees globally. Percentages are out of employees who disclosed information about their race or gender. A small percentage of employees whose race is unknown are not displayed.

Nami Sumida/Retail Dive; data from FY19 Nike Inc. Impact Report

In a statement to Retail Dive, Nike said the company increased vice president representation in the U.S. for underrepresented groups by two percentage points over the last year.

"While this is good progress, we know there is more work to do," the company said. "We will continue to increase representation and strengthen our culture of belonging."

The percent of Black employees, vice presidents and directors at Nike has stayed relatively steady over the past four years, though the company's board of directors is now 31% Black, up from 17% in 2016.

The percent of Black directors at Nike has stayed steady for four years

% of Black employees based on job category over time

Although diversity in exec ranks has been an issue for years, the protests have highlighted the need for better representation in management ranks. That's also partially because consumer expectations for brands have risen.

"[There is] the expectation that a brand and the company that owns it be aligned in a demonstrable way: that your words are a reflection of actions, are a reflection of really who you are at your core and what you value," Broxson said. "When you see some of these getting some backlash around things that maybe to others seem brave or applaudable, it's because when you look a little deeper, you scratch beneath the surface, you're seeing something that doesn't add up right."

Well-meaning hiring goals are also not enough to create real change, according to Ngome. She noted the difficulties retailers have in finding Black talent, and also that once they've found it, many Black employees become frustrated with a culture that isn't inclusive and doesn't provide for their future.

"There's no entry level pipeline. There's no mid-level to leadership pipeline," Ngome said, "and people get frustrated when they can't see their career growth within a company, and they start their own business."

This time may be different

Retail as a whole has been through these moments before. Inequalities have surfaced in a variety of ways, but, as the protests revealed, there are still problems retailers need to solve. While in the past, news of a lawsuit or other brand crisis caused minor flare-ups for companies, there's reason to believe this time might be different.

Broxson believes the pandemic had an impact by making inequalities sharper at a time when everyone is facing the same threat. He likened the situation to the Spanish flu, which lasted from 1918 to 1920, and ended with women gaining the right to vote.

"It's clearly attributed to the fact that the movement was given greater credibility because of what was going on due to the pandemic," Broxson said. "They saw that everyone was facing the same crisis, but there was a section of society that didn't have the same rights to overcome that crisis, to face that crisis."

Similarly, he noted that COVID-19 is "highlighting a level of inequality that is endemic to all of our societal structures."

As a result, the actions companies take will need to be stronger, sources said, and move toward lasting change to satisfy critics. Because consumers are demanding more from retailers, they will have to respond with change at the organizational level, not just the brand level.

"If a company puts something out and says, 'We're going to make a donation,' I think that worked five years ago," Broxson said. "That drew attention away from the problem long enough for people to calm down and forget about it or stop being as active on that and move on to focus on other issues. That's just not going to happen this time around."

While making a donation is still a good thing to do, it won't be enough, he said.

"It's one thing to celebrate Black History Month," Broxson said. "It's another thing to truly incorporate the spirit of Black history and that struggle into your corporate identity and into your boardroom and into your management team and say, 'I want that perspective every day — not just in February.'"

Ngome isn't as certain that things will change for good this time around. She worries that diversity and inclusion initiatives companies are so quick to put in place now will become "affirmative action 2.0" and be just "the fine print on the bottom of the website."

She said she hopes that companies take some time in the wake of the protests to perform an internal audit of sorts: going through products and services, examining where people of color are at the organization (for example, entry level vs. leadership), looking into retention efforts and thinking of ways to be more inclusive as a whole.

"They have to make sure that whoever they put in these roles, they have the resources they need to really execute on these so-called initiatives that they're very serious about."

Michelle Ngome

President of the African-American Marketing Association

According to a recent report by Demos and the NAACP, Black and Latino retail workers are overrepresented as cashiers, the lowest-paid position in retail, but underrepresented in management positions. Black workers constitute 11% of the total retail workforce, but just 6% of managers.

The chief diversity and inclusion role has gained visibility in recent years, and has become a popular step for companies that face racism accusations. Perhaps most notably, Gucci named a global head of diversity in 2019, while Prada announced a diversity and inclusion advisory council in February of the same year. Both had been called out in the past for racist actions and products.

Simply hiring someone into that role is not enough, though, Ngome said. They need to be provided with staff, an appropriate budget and whatever else is needed to do their job effectively.

"The company, from the CEO down, they have to make sure that whoever they put in these roles, they have the resources they need to really execute on these so-called initiatives that they're very serious about," Ngome said.

Broxson said that retailers should be looking at who their audience is and reflect that audience in equal parts in their workforce.

Athletics retail isn't the only sector that struggles with diversity, but it does provide a lens through which to view the rest of retail. And consumers are watching to see how retailers approach the issue.

"How long are we going to keep allowing these white men to tell us what we want to wear and use on our body?" Ngome said.