How Sephora is tackling racial bias in retail

“Bias is wired into our brains and shows up in every institution, from policing to real estate to online media, and so we wanted to understand the implications for retail, guided by our commitment to create a more inclusive retail experience,” Deborah Yeh, Sephora’s chief marketing officer, tells Fortune. 

The beauty retailer recruited a team of experts from both inside and outside the company who could report on racial bias in retail and come up with actionable steps that Sephora and ideally other retailers could take to make the shopping experience more inclusive. The task force worked for more than a year to study the issue and earlier this month released its findings in the company’s first-ever “Racial Bias in Retail” report.

“The study was really intended to better understand the issue, and understand how commonplace racial bias is in retail settings, as well as similarities and differences across different racial groups, and ultimately measure the problem,” Yeh says. “But we also wanted to identify tactics and actions that could help mitigate bias treatments from the shopper experience.”

When Sephora set out to recruit the experts needed to conduct the report, Yeh says it was vital the retailer also brought in advisers from outside the company who could share their expertise and findings and be candid about the scope of the problem. She also wanted team members with “lived experience” who could share their perspectives on being BIPOC in a retail setting.

What Sephora found was a pervasive, industrywide problem, with two out of five shoppers reporting discriminatory treatment based on race or their skin color. BIPOC shoppers identified a variety of ways bias and exclusionary tactics can affect their shopping experiences, from marketing materials to the products on store shelves to how they’re treated by employees. Additionally, three out of five employees reported observing bias at their place of work.

Dr. Cassi Pittman Claytor, a leading scholar in racism in retail and a professor at Case Western University, was one of the outside experts recruited by Sephora to lead the research over the last year.

“When we tried to think about the nature of how racial bias and discrimination operates in retail settings, we really try to be comprehensive,” says Pittman Claytor. “We developed a model that looked across the entirety of the consumer experience. We’ve been talking a lot about in-store experiences, but even before a consumer enters a store, there are opportunities for retailers to be inclusive or to be exclusive.”

“They come off like they’re trying to help, but I know what it is.”

Sephora had to answer to one of its most high profile examples of racial bias months before it began work on the report. The company, which is owned by French conglomerate LVMH, went into damage control mode after R&B singer SZA tweeted about being accused of shoplifting at a Sephora location in Calabasas, Calif.

“Lmao Sandy Sephora location 614 Calabasas called security to make sure I wasn’t stealing. We had a long talk. U have a blessed day Sandy,” the nine-time Grammy nominee tweeted in April 2019.

Sephora apologized to SZA and closed its stores for diversity workshops in June 2019. 

Erica Woodkins relates to the feeling of being “policed” when she goes shopping. The Dallas resident loves makeup but says she goes to Sephora only when she absolutely needs to purchase a product she can’t find anywhere else.

Woodkins, 38, works as a nurse in Dallas and is building House of Kaine, a beauty blog with a focus on skin care for Black women. Last month she tweeted at Sephora after she says she had a negative experience that occurs all too often for her in retail environments.

“I really like how your employees at Northpark followed me and my daughter around the store being rude. Little do they know I’m a Rouge client,” she wrote, referring to Sephora’s VIP program for customers who spend more than $1,000 per year. “I thought you guys addressed the racist treatment of your black clients.”

While she received a response on Twitter from Sephora’s customer service team, Woodkins says that is the last she heard from the company.

Even when she visits her local Sephora after work, wearing her scrubs, Woodkins says she usually feels like she’s being followed and treated differently from white customers.

“They come off like they’re trying to help, but I know what it is,” she tells Fortune. “I’m the only one in the aisle and they want to know what I am looking at. There are times when I am sitting there looking at the bottle because I can’t touch it due to COVID. At this point, I have to learn to laugh.”

Only 13% of BIPOC report their negative retail experiences, according to the report, for fear of gaslighting or retaliation. Woodkins says she usually speaks up after her negative retail interactions, but she says she doesn’t want a conciliatory gesture. She wants change.

In the case of Sephora, “the manager will apologize and say come in and get your makeup done,” Woodkins says. “Lady, I don’t need you to do my makeup. I just want you to treat me with respect when I come in there.”

Doing the work

Tackling such a deeply rooted issue from all angles required the Sephora team to come up with a multifaceted plan to effectively understand the scope of racial bias in retail. That included building an all-star team of experts.

“I think in our particular case, the secret sauce is shared values and equal passion for things that matter to us as an organization,” Yeh says. “And then a lot of different types of people coming together to actually answer the challenge.”

In addition to Dr. Pittman Claytor, Sephora enlisted the help of Dr. David Crockett, a leading expert on racism in retail. April Reign, founder of the #OscarsSoWhite movement, also joined as a Sephora equity adviser, in addition to qualitative researchers who previously worked with Sephora to conduct focus groups on a variety of issues.

Sephora executives looked to their academic experts to review previous studies about what had been uncovered about the issue of retail bias over time and get what Dr. Pittman Claytor calls “the lay of the land.” 

The next phase involved setting up qualitative and quantitative studies with shoppers and retail employees across the United States with a sample of people encompassing all races, cultures, ages, and income levels. 

Just as the team was getting ready to conduct in-person interviews and ask participants to go on in-store shopping experiences, the coronavirus pandemic hit, forcing them to modify their research strategy and shift to virtual interviews.

“There was a conversation at the time around how to do authentic interviews with people talking about something that’s incredibly personal in a virtual environment,” Yeh says. “We decided that we did want to press forward, and we conducted all of those qualitative interviews remotely. Our research team was amazing in building rapport with folks, and this was early. I think it seems a little bit more obvious now that everyone can do business in an effective way, in some way or another, in remote environments, but we were pleasantly surprised that we were able to still have really meaningful conversations.”

The timing also meant Sephora found itself in a position to lead on an issue that others in the industry were only beginning to wake up to. The May 25, 2020, death of George Floyd sparked racial justice demonstrations around the world and led to brands issuing statements of support. 

By this point, Sephora was nearly halfway done with its reporting at a time when Reign says there was “a lot of performative allyship by other companies and corporations.”

“Sephora took this on just because they knew it needed to be done,” Reign says. “And then it just so happened that things transpired.”

“50 shades of beige”

Sephora didn’t wait for its report to be released before it took its first big step toward creating a more inclusive shopping experience. Last June the company became the first major retailer to take the 15 Percent Pledge. The grassroots movement, which was founded by designer Aurora James, asks shops to allocate at least that much shelf space to Black-owned brands. 

The beauty retailer currently lists eight Black-owned beauty brands on its website. Those brands account for about 3% of shelf space, says Artemis Patrick, chief merchandising officer at Sephora. 

“As an action point, we are focused on three core areas of our business. That’s marketing and merchandising, retail operations, and in-store experiences, and of course, talent and inclusive workplaces,” Patrick explains. “Within merchandising, our brand representation goal is really to both meet and actually exceed our 15% pledge, and provide greater visibility for our Black-owned brands, both in store and online.”

Maeva Heim, founder of BREAD, pitched Sephora on her Black-owned hair care company in 2019 and earned a spot in Sephora Accelerate, the company’s brand incubator.

“As I finally started building BREAD, I knew it was a brand that needed to exist in Sephora. I wanted to create a brand for all of the women who would be going to Sephora for their makeup and skin care, but to date hadn’t felt like they had an offering in hair,” Heim says.

Last July, BREAD products launched on Sephora.com and hit store shelves in August.

“I do believe that diversity in the beauty industry is making progress,” Heim says. “And while I could not be more thrilled to witness and be a part of this progression, we have a long way to go.”

The brand incubator is one area where Patrick believes Sephora can make a massive impact. Sephora Accelerate previously focused on female-led brands, but now works exclusively with BIPOC founders to help build their brands and bring them to market. The next incubator class includes eight brands helmed by diverse founders, according to Patrick.

“We are really looking at the full cycle. It’s not just about putting a bunch of brands on the shelf,” she says. “We’re looking at how we scout and vet new brands, how we evolve our brand incubator strategy, which has been in place for years and years.”

As part of the report, Sephora is pledging to double the number of Black-owned beauty brands on its shelves by the end of 2021.

Trinity Mouzon Wofford, CEO and cofounder of Golde, started selling her company’s Superfood Latte Blends at Sephora in 2019. This month, Sephora added Golde’s Superfood Face Masks to its inventory. As a Black woman, Wofford says she knows what it’s like to go somewhere and not feel represented at a store or like her business was valued.

“In the past I have definitely felt that exclusion—you go to shop for makeup, and it’s 50 shades of beige with literally two brown colors. That was kind of the norm in cosmetics up until Fenty blew that open,” she says, referring to the brand helmed by the singer Rihanna. “That’s the beauty of having representation within founding teams—when a Black woman is behind the brand, it’s obviously going to take into consideration the needs of that community.”

Lessons learned

After more than a year of research, Sephora executives and their research team gathered for a virtual town hall on Jan. 12, where they presented the results of the study to employees and reporters, and discussed how they can come together as a team to address the complex insights outlined in the report. 

In-store interactions—including negative experiences, such as the one Woodkins shared with Fortune—are one of the key focus areas the company is addressing. 

BIPOC shoppers are more likely to feel that in-store interactions are the result of their skin color, appearance, or ethnicity, according to the report. While BIPOC shoppers feel judged based on physical attributes, the report says that 60% of retail employees use a shopper’s behavior to determine whether to approach them, showing both unconscious bias and a massive disconnect behind how shopping experiences are perceived.

“We have so much evidence on how profiling occurs in a variety of different contexts. No one thinks they’re profiling. That’s a moment where you have to kind of step back from the data and interpret it,” Dr. Crockett says. “It is not uncommon for us to hear employees say they are looking at behavioral cues, but we have enough existing data through audit studies and experimental data that can really tease out the cause and effect. People may think that this is what they are doing, but a lot of what they’re doing is using proxies for race, and that race is the most salient thing.”

As a result of these experiences, some BIPOC shoppers are using coping mechanisms, such as shopping online to avoid having to go back to a store where they feel they were treated unfairly, according to the report. It’s an opportunity for Sephora and others across the retail industry to do better.

“There are clear areas where retailers can focus efforts to make the shopping experience more inclusive and welcoming for all. The findings show that BIPOC shoppers have some needs that hold greater importance in helping them feel welcome compared to white shoppers in creating a positive in-store experience, including promptly being greeted and offering assistance when shoppers enter the store, telling shoppers about new products, offers, and services, and having store associates who ‘look like me,’” the report notes.

Sephora outlined an action plan for 2021 that includes a consistent greeting system, new training for beauty advisers about what the customer interaction experience should look like every step of the way, and a dashboard that will provide feedback at the store level on a monthly basis regarding employee training compliance and efficacy.

In order to mitigate the feeling of being “policed” while shopping, Sephora  says it will reduce its reliance on third-party security guards and shift its focus to “in-house specialists.”

The report also sheds light on how BIPOC employees feel in retail environments. One in three retail employees say they have considered quitting after experiencing racial bias or unfair treatment in a work environment, whether it’s perpetrated by customers or their coworkers. For Black employees, that number is even higher at 37%.

George-Axelle Broussillon Matschinga, Sephora’s first-ever vice president of diversity and inclusion, has been one of the driving forces behind implementing new training and hiring practices to strengthen Sephora’s teams, both in stores and at corporate.

As part of the report’s action plan, she says Sephora will publish its employee representation data on a biannual basis.

“We will disclose our numbers and be honest about the gaps that we have that we want to do better as a retailer,” Matschinga says. 

For Sephora, the report is about sparking a greater discussion about a difficult truth across the retail industry, but also a way for the beauty retailer to publicly hold itself accountable to its goal of mitigating racial bias.

However, what shoppers want most, according to the report, is a long-term plan of action and for retailers to commit to making meaningful changes.

“It is uncommon to see this level of commitment on this issue,” Dr. Crockett says. There’s been plenty of  “performative allyship” over the past year, he adds.

“It’s been a lot of, ‘We’re here for you,’ but not much since then,” he says. “That has not been the case with Sephora, so good for them.”