Commentary: What LGBTQ+ Consumers Want Retailers to Know
If the global LGBTQ+ community was a country, it would be the fourth-largest economy in the world — an economy that insists on doing business on its own terms.
After decades of discrimination and persecution, LGBTQ+ consumers demand to do business on their own terms. Building on its growing research and evolving perspectives on the future consumer, A.T. Kearney found that while some consumer brands have worked to advance social and economic equality by revising employment policies, fewer have attempted to understand how LGBTQ+ consumers’ beliefs, values, experiences, and lifestyles influence which products and services they buy and what stores they patronize.
While approximations vary, conservative estimates suggest LGBTQ+ individuals make up about 4.5% of the total population of the United States, but represent about 8% of the country’s disposable income, or roughly $1 trillion. Witeck Communications estimates this figure will rise faster than the economy at roughly 4% per year for the foreseeable future. Nielson found LGBTQ+ consumers make about 10% more trips to the store per year than their non-LGBTQ+ counterparts and spend about 7% more during those trips. And, speaking of trips, LGBTQ+ consumers collectively spend about $80 billion annually on travel.
Studies conducted in 2017 by the American Community Survey and US Census Bureau found LGBTQ+ couple households exceed non-LGBTQ+ couple households in median household income ($92,000 vs. $86,000); dual employment (61% vs. 50%); percentage of households with combined incomes over $100,000 (46% vs. 42%); and educational attainment (in 32% of LGBTQ+ households both partners had at least a BA or BS degree vs. 25% in non-LGBTQ+ households).
Recognizing Complexity in Diversity
The community is not monolithic—the LGBTQ+ community encompasses a remarkable diversity of communities, individuals, and social and economic realities. However, despite a multitude of elements of intersectionality, many members of the LGBTQ+ community tend to share a common set of values. Pew Research Center and US Census data suggests LGBTQ+ individuals are more likely to be involved in their communities and spend more in stores offering opportunities for communal engagement and human connection. Nielsen found they spend 72% more in bookstores, 55% more in beverage stores (for example, coffee shops and smoothie shops), and 32% more at pet stores as well as spending more time and money at bars and other entertainment venues.
Though in aggregate LGBTQ+ consumers far outspend their non-LGBTQ+ peers, it is important to balance this against another reality. Many LGBTQ+ individuals live in poverty and suffer from a lack of stability in housing and employment. Inclusion and advocacy are not the exclusive benefits of the most affluent, but must also serve the needs of economically disadvantaged and resource-deprived LGBTQ+ individuals. Advocating for all members of the LGBTQ+ community is a core value for many as they collectively work to further social, political, legal, and economic equality.
Looking at Retailing and Brands through an LGBTQ+ Lens
How companies conduct themselves with respect to LGBTQ+ issues is crucial. A CMI study found 86% of LGBTQ+ consumers would boycott a brand they perceive as discriminatory against them and 71% would tell their friends and family to do the same.
And those reactions get amplified. Seventy-two percent of LGBTQ+ consumers cite either their partner or an LGBTQ+ friend as the person who most influences their purchasing decisions, and 58% of LGBTQ+ individuals cite word of mouth as one of the most common ways they learn about a company’s position on LGBTQ+ issues.
On the other hand, authentic advocacy on LGBTQ+ issues generates loyalty. According to CMI, 76% of LGBTQ+ consumers say the brands they buy tend to be openly supportive of their community. Fifty-four percent of LGBTQ+ consumers have asked friends and family to buy from a certain company because of its support of LGBTQ+ issues. Further, 79% of LGBTQ+ consumers are willing to pay a premium for products whose companies support them, as much as 15% more.
Authenticity and Boldness, Table Stakes for Success
So what can companies do to build high-quality, lasting connections? First, they need to be courageous and take bold positions on LGBTQ+ issues, even when they appear risky. Target’s announcement that it would remove “Boy” and “Girl” labels from some store departments, for example, garnered mixed reactions but ultimately demonstrated authentic support for LGBTQ+ individuals.
Most importantly, companies must advocate for LGBTQ+ issues with true, authentic intent—not just for commercial interests. Corporate advocacy is most effective when it reflects company values consistently expressed through actions—whether hiring and promotional policies, support of LGBTQ+ causes, or a dignified, respectful, and inclusive approach to advertising and marketing.
LGBTQ+ groups aren’t fooled by corporate lip service or patronization—they set high benchmarks and use sophisticated scrutiny when examining any corporate claims of “authentic” support. Even small personal donations by executives to non-LGBTQ+ friendly organizations quickly make headlines. LGBTQ+ advocacy, led by values rather than commercial interests, requires deliberate action, including achieving high scores on the Human Rights Campaign’s well-known Corporate Equality Index. Awareness of gender fluidity, correct use of pronouns—hint, it’s not just male and female—and providing gender-neutral restrooms are table stakes for demonstrating authentic intent and understanding of LGBTQ+ issues.
The Pot of Gold at the End of the Rainbow Flag
Building a better relationship with the LGBTQ+ community and working to end the discrimination its members still experience should be part of the values of every company, consumer-facing or otherwise. Consumer brands and retailers’ public reputations give them a capacity for influence far larger than that of other industries. As a result, their support of the LGBTQ+ community does more to advance progress.
Advocacy is expected every day, 12 months a year. Trust isn’t built overnight, and the LGBTQ+ population will not be drawn to brands based on a single campaign during annual pride events. Building trust with the LGBTQ+ community takes time, year after year, moment by moment. Consistent, intentional, and continuous commitment, backed up by actions and authentic concern for their quality of life, is the only way to build a lasting relationship with LGBTQ+ consumers and earn their loyalty.
Corey Chafin is a principal in the consumer and retail practice of global strategy and management firm A.T. Kearney ([email protected]).