Diversity in the Retail Apparel Industry

Transgender model Hari Nef recently highlighted the importance of the role of fashion retail diversity and inclusion, stating: “Diversity is everything. Inclusion leads to understanding, demystification, destigmatization. Fashion has the power to glorify bodies and identities — to include them in a narrative of luxury and beauty.”

The fashion industry has not always focused on diversity or inclusion. Certain types of bodies and backgrounds were valued more highly than others. Marginalized communities never saw themselves represented in glossy magazine spreads until relatively recently.

Today though, stakeholders are demanding that retail fashion companies hold themselves to a higher level of accountability, recognizing DEI as more than a passing trend. Here, we’ll reveal DEI pain points present throughout the retail apparel industry and how organizations can address them.

The Necessity of Diversity in the Retail Apparel Industry 

As consumers cultivate a growing awareness of social justice, DEI is no longer an option for the retail fashion industry. This $2.5 trillion annual global industry has come under scrutiny for not doing enough and perpetuating systemic inequities. Brands need to meet consumer demand by ensuring more visible representation of diversity. Industry actors must take actionable steps to implement DEI best practices in the workplace, with transparent insights into their DEI policies.

A focus on DEI can give retail apparel companies a competitive advantage. Companies that do not effectively implement DEI best practices are likely to be outperformed by their counterparts. However, organizations that leverage the unique talents of their diverse workforce benefit from an increase in:

  • Collaborative problem-solving and innovation
  • Productivity and employee engagement
  • Improved employee morale and retention
  • Access to best candidate talent pools
  • Stakeholder buy-in
  • Meeting and exceeding bottom lines

Cultivating a vibrant workplace culture in which diversity is valued requires ongoing DEI training and education. Company leaders must model and facilitate DEI best practices to foster understanding, respect and tolerance.

DEI Pain Points in the Retail Apparel Industry

While some companies in the retail apparel industry have made visible DEI efforts and gains, many still have a long way to go in all three areas:

  • Diversity. Representation on and off the runway has been severely lacking in the retail apparel industry. Minority presence on executive teams, boards, and among general employee groups — as well as in ad campaigns, on runways, shelves, and magazine covers are all areas lacking in diversity across the retail apparel industry.
  • Equity. A disparity exists across race and gender in the fashion apparel industry. As of 2019, it was found that women held on average only 26 percent of board seats for retail and consumer companies and made up just 14 percent of executives. Meanwhile, ethnically diverse individuals held just 16 percent of board seats and 13 percent of executive positions.
  • Inclusion. According to an article published in The Journal of Consumer Affairs, about one-third of minority respondents to a survey said they have experienced racial discrimination from an advertise­ment. Furthermore, more than 60 percent of African Americans say they have experienced racial discrimination inside a retail store, and half have experienced racial discrimination when making a purchase. Whether it’s from behind the counter, in the boardroom, on the runway, or on the floor, the retail apparel industry needs to make greater strides towards achieving inclusivity.

A couple of industry leaders have set an example to rectify these areas. Macy’s committed to the “15 Percent Pledge,” which asks retail outlets to dedicate 15% of their shelf space to Black-owned brands. The Gap publicly declared it will make efforts to close the space between the diversity of its employees and the diversity of the US population by doubling the representation of Black and Latinx employees in its US headquarters by 2025.

The Cost of Inadequate D&I in the Retail Apparel Industry

Brand loyalty is no longer a guarantee based on inherited generational consumerism patterns. Today’s consumers demand more from companies in terms of values. Customers want reassurance that they are participating in more ethical consumption, and apparel companies that can’t deliver on that may experience backlash, leading to a drop in profitability.

Fast-fashion industry giant Zara joined a slew of retail apparel outlets found to be using code words to racially discriminate among BIPOC customers and employees. In 2015, this resulted in a $40 million discrimination lawsuit leveled against Zara. The suit claimed the company practiced race-based favoritism by virtue of management practices that treated darker-skinned employees worse than their lighter-skinned counterparts. Zara is one of many industry leaders that have faced costly discrimination lawsuits.

Assembling a More DEI-Friendly Wardrobe

The COVID-19 pandemic shifted the global landscape across all industries. According to McKinsey’s State of Fashion 2022 report, the fashion industry posted a 20 percent decline in revenues in 2019–20, with a record 69 percent of companies labeled as value destroyers in 2020. Now more than ever, retail apparel companies must embrace a growth mindset to get back on their feet. This requires that they adapt to evolving consumer demand and ramp up their efforts to reflect customer values in their assortments, supply chains, and ways of working.

Kia Roberts, principal and founder of Triangle Investigations, has thrown down the gauntlet, stating that brands must get some teeth for their DEI commitments. Fashion companies must spell out what is and isn’t acceptable behavior by leadership and employees. Setting clear, transparent, and bold DEI initiatives is vital to the longevity of organizations within the retail apparel industry.

Actionable Solutions Tailored for Your Organization

Numbers structure the DEI narrative in retail apparel, while variations across human experiences account for details that complete the picture. Diversio’s unique platform tracks and measures your organization’s DEI metrics by linking human intelligence and artificial intelligence to provide you with ready-to-implement, actionable recommendations resulting from a four-minute, anonymous survey linked to six research-based KPIs.

Book a demo today to elevate DEI best practices in your organization.

Diversio DEI Expert
Diversio DEI Expert
Diversio's DEI expert shares everything about diversity that you need to know.
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Head of EDI, Canadian Institute for Advanced Research

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