The global beauty industry is missing a $2.6 billion opportunity by failing to meet the needs of the black consumer, according to McKinsey. In a new study, the consultancy concludes that Black people’s experience within the beauty industry is significantly more frustrating than that of non-Black people and filled with multiple sticking points.

For instance:
• Black brands represent only 2.5% of beauty industry revenues. Yet black consumers are responsible for 11.1% of total beauty spending.

• Black consumers are three times more likely to be dissatisfied than non-black consumers with their hair care, skin care and makeup options.

• Black consumers show an affinity and preference for black beauty brands and are 2.2 times more likely to conclude that products from these brands will work for them. However, only 4-7% of beauty brands offered by specialty beauty stores, pharmacies, grocery stores and department stores are black brands.

• From entry-level to C-suite and retailers to beauty houses, only 4-5% of all employees in the US beauty industry are black.

• Black brands in the beauty industry raise a median of $13 million in venture capital, far less than the $20 million that non-black brands raise. Yet today, the median revenue of these black brands is 89 times higher than that of non-black beauty brands over the same period.

McKinsey concludes that better serving black consumers and supporting black beauty brands could lead to greater fairness across the beauty industry – for buyers, entrepreneurs, big beauty houses, retailers and Investors.

To help remedy the situation, McKinsey offers insights for research, marketing, and sales.

When it comes to market and product research, black populations are often overlooked, according to McKinsey. For decades, major multinational beauty brands have focused primarily on non-black skin and hair. Beauty executives interviewed by McKinsey said they struggled to hire black chemists to do research in labs and there was also an underrepresentation of black participants in clinical trials.

For black entrepreneurs, they are more likely to be left out of receiving information about high-potential opportunities. Black representation in the beauty industry lags far behind black representation in share of beauty spending and in the general population: Black employees make up only a small percentage of employees in the beauty industry. beauty and are also under-represented among employees of retailers selling beauty products. In fact, McKinsey estimates that it will take 95 years for black employees to achieve talent parity at all levels of the private sector.

According to Nielsen, only 2% of total advertising dollars spent in the United States from 2011 to 2019 went to black-oriented TV stations, magazines and websites. In her focus groups, McKinsey learned that many beauty ads didn’t resonate with black audiences because they didn’t represent a diverse demographic or speak to people with more melanin in their skin and curls or knotted hair. . Research from McKinsey’s focus group suggests that 75% of black beauty consumers can be persuaded to buy beauty products by ads featuring different skin tones from all races. Conversely, 75% may be deterred from purchasing a product when an advertisement does not reflect racial diversity. According to McKinsey, black consumers have an affinity with black brands and are 2.2 times more likely to conclude that black brand products, compared to non-black brands, will work for them.

Lack of availability is another problem in the black beauty industry. Many black neighborhoods are in “consumer deserts”. On average, black shoppers travel 5.36 miles to a specialty beauty store, about 21% more than white shoppers. Black consumers also have to travel more than 17% farther than white consumers in department stores to access expert customer service behind a makeup counter. Once you get to the store, there aren’t enough brands on the shelves that are suitable for melanic skin or Afro-textured hair. When stores carry them, black beauty brands often run out of stock and what’s in stock is often misplaced on the shelves. Forty-seven percent of McKinsey survey respondents said they usually buy beauty products at a big-box store or grocery store, but only 13% said it was easy to find beauty products there. beauty products that meet their needs.

If black consumers find what they’re looking for, they often have a bad selling experience, according to the McKinsey survey. Sellers were unaware of products aimed at black consumers. Only 23% of respondents said salespeople could have sophisticated discussions about black brands and beauty products. And only 13% said salespeople could make informed recommendations to black consumers. McKinsey concludes that this may stem from a lack of diversity among store associates combined with insufficient systematized training of associates on the needs and interests of black customers. McKinsey found that when there is at least one black salesperson in the store, black consumers are nearly twice as likely to find someone who provides a very or somewhat helpful response regarding products designed for darker skin tones.