By Saroj Gupta
After the recent announcements this January, where the directive was issued ordering all federal diversity, equity and inclusion offices to be shut down, many companies have started scaling back their DEI efforts as well. In the past, we’ve seen this have a negative impact, so here’s what we can expect long term for brands that participate.
Your future consumer cares about community
On January 24th, Target announced they are ending their DEI goals that were previously set to increase black employee representation and advancement along with efforts to hire and promote women, LGBTQ+, minorities and veterans. Since this announcement, there has been backlash and activists are calling for a boycott of Target.
Gone are the days where brands could update their policies without considering the future repercussions. With social media, everyone has quick access to information. People can clearly see these updates and showcase their opinions.
The Impact: Decrease in brand loyalty
A reduction in DEI efforts will lead to public criticism, social media boycotts, reputational harm and loss of revenue. Consumers, especially Gen Z and more diverse demographics, care about their community and the world. They expect brands to uphold social responsibility. According to Direct Digital Holdings’ Research, 81% of Gen Zers say multicultural/diverse communities greatly shape brand preferences.
If manufacturers and retailers want to stay relevant, they need to care and connect with the generation that makes up 25 percent of the global population.
Your current consumer is diverse and will only get more diverse
In 2024, the buying power for Hispanic consumers was estimated at $2.4 trillion, Black or African American Consumers purchasing power was projected to reach $1.8 trillion and Asian American Consumers spending power was projected to reach $1.6 trillion (Source:NIQ). Considering the buying power of these diverse consumers, their representation becomes even more crucial to the success of companies.
The Impact: Missed market opportunities
With a decrease of DEI representation, we will see a decrease in sales and revenue for brands that do not support. A research by ANA AIMM reveals 77% of those surveyed will immediately stop purchasing or look to purchase other brands more supportive of who they are.
Diversity drives ROI
Research from the Saïd Business School at Oxford University found that there are benefits of inclusive advertising – 3.5% higher shorter-term sales and 16.7% higher longer-term sales. Brands that prioritize diversity and inclusion are 62% more likely to be a consumer’s first choice and have an 8% higher chance of being tried.
The Impact: Decrease in relevance in the global market & ROI
Inclusivity is necessary to stay relevant globally and to make money. While the US might be scaling back, the world in the digital age is becoming more and more borderless. Cultures and communities that have been niche before are more accessible than ever. If brands do not follow the way the world is consuming content and advertising, they will lose competitive advantages in international & national markets to brands that continue this effort.
Diversity drives innovation
Are we ready for Kendall x Pepsi commercial debacles in 2025? I’m not. We need diverse teams because we need diverse perspectives to do the best work. According to BCG, companies with more diverse management have 19% higher revenue than those that don’t. You know why? They are spearheading innovation.
Nadjia Yousif, BCG’s Chief Diversity Officer, says “This isn’t about taking sides, but rather making the most of the opportunities to enhance business and societal value. DEI raises standards for everyone by improving innovation, performance, and the workplace experience across the board.”
The Impact: Reduced Creativity & Innovation
If we decrease diversity and inclusivity, you decrease innovation and therefore revenue.
Policies will keep changing but it is up to leaders in our industry to help brands and our clients understand the long-term impact such decisions hold. Alicia Gonzalez, Freelance Journalist & DEI Columnist @ Forbes, has correctly said “The challenge is for companies to have the vision and courage to stay the course, even when it’s not the easy path to take. After all, the true measure of a company’s commitment to DEI is not just in times of popularity but in times of adversity.”
The American Marketing Association (AMA) is deeply committed to advancing diversity, equity, and inclusion (DEI) within the marketing profession. To support this mission, the AMA offers a comprehensive DEI Resource Hub designed to assist professional chapters in implementing effective DEI initiatives.
As a chapter of the American Marketing Association, we commit to fostering diversity, equity, and inclusion by increasing Black, Brown, Indigenous, People of Color (BIPOC) representation* in leadership, membership, and marketing initiatives. We pledge to build a diverse talent pipeline, collaborate with organizations that prioritize DEI, and use our platform to promote anti-bias and anti-racism through education and open dialogue. Holding ourselves accountable, we strive for continuous progress in creating a more inclusive and equitable marketing community.
