What: BIPOC beauty brands face market access challenges as major retailers abandon diversity initiatives, prompting a strategic shift towards specialty retail partnerships.

Why it is important: The retail industry's DEI rollback threatens to destabilise USD 370 million in annual Black beauty consumer spending, reshaping market access for minority-owned brands.

Major US retailers including Walmart, Amazon, and Target are retreating from their diversity, equity and inclusion commitments, creating significant challenges for BIPOC beauty brand founders. These retailers previously championed DEI initiatives through enhanced shelf space and support programmes, particularly following the racial reckoning of 2020. However, the current rollback threatens to destabilise the momentum gained by diverse beauty brands in mainstream retail. The impact extends beyond mere shelf space, affecting critical resources like accelerators and funding programmes essential for emerging players. In response, brands are exploring alternative channels, with specialty retailers like Ulta Beauty and Sephora maintaining their DEI commitments. BIPOC-priority retailers and those participating in the 15 Percent Pledge are emerging as crucial allies, while brands strengthen their direct-to-consumer strategies and explore innovative retail formats like pop-ups and hospitality partnerships. Despite these challenges, experts remain optimistic about diversity in beauty finding new paths to growth.

IADS Notes:The retail industry's approach to DEI has undergone significant transformation since late 2024. Walmart's November 2024 strategic pivot to maintain inclusion practices while removing explicit DEI language achieved strong market performance , contrasting sharply with Target's February 2025 experience of a $10 billion valuation loss . The emergence of the FAIR framework in January 2025 offered retailers a new way to balance inclusive practices with business performance, while specialty retailers like Sephora reinforced their commitments through innovative initiatives.

BIPOC-owned beauty brands face a new reality in the post-DEI era