In the aftermath of 2020’s racial reckoning, the beauty industry positioned itself as a blueprint for inclusive capitalism. It became an ecosystem where diversity wasn’t just moral, but materially profitable. From expanded shade ranges to retail pledges supporting Black-owned brands, equity became embedded in both brand storytelling and balance sheets.
Today, that clarity has fractured. After a year of renewed political pressure and a broader corporate rollback on diversity, equity, and inclusion, beauty is entering a more ambiguous phase. This one is less defined by bold commitments and more by careful recalibration. The language of equity is softening, but the underlying business tensions are intensifying.
The commercial stakes behind beauty’s DEI recalibration are not theoretical. They are measurable, and increasingly difficult to ignore. According to McKinsey & Company, Black consumers account for $6.6 billion in annual beauty spend, representing 11.1% of the total US market, yet Black-owned and Black-founded brands capture just 2.5% of industry revenue.
“Initially, the beauty industry as a whole was standing 10 toes down against the DEI rollbacks,” Corey Huggins, founder, Global CEO & Managing Partner of Ready to Beauty and a former L’Oréal executive, said to BeautyMatter. “The industry claimed and espoused all the virtues of democracy, fairness, and pluralism with a commitment for embracing all types of brands and consumers.”
That stance, however, has softened. “As the economic realities have set in, I have sadly seen a steady softening in the industry’s DEI absolutism to outright capitulation. Programs are being either eliminated or rebranded to the point that they have lost their teeth and effectiveness.”
Even cultural tropes have shifted. “Take, for example, Black History Month in February. This year was altogether different from previous years. Some of the big, multibrand companies held a single corporate event. Think of it as sticking a toe in the water, versus diving in,” Huggins lamented.
Across the industry, this retreat is often subtle rather than explicit. According to communications and impacts strategist Cheryl Overton, “Companies have scaled back their DEI language like a lot of corporate America, but mostly with quieter edits such as softer language, newer titles for execs who do this work, [and] synonyms for the words ‘diversity,’ ‘equity,’ and ‘inclusion.’ In their place are “belonging,” “access,” and “community.”
Crucially, Overton does not interpret this as an ideological rejection. “I don’t think these shifts are due to people rejecting the principles of DEI. Rather, some are afraid of the backlash of saying them outright.” Still, she is unequivocal about the stakes. “Words are not trivial. Standing ten toes down on DEI matters.”
Internally, the shift is even more pronounced. “Most brands and executives are scared,” said Huggins. “They don’t know what to do, and that in fact renders them to play it safe and err on the side of caution.” That caution is shaping investment, partnerships, and prioritization, and revealing uncomfortable hierarchies. “There is a serious trepidation with anything that is perceived as Black or Black supporting. The same holds true for anything connected or related to trans support, too,” he explained. “Consequently, I can only conclude that there is a hierarchy of DEI within beauty to some degree, with Black being at the bottom.”
Overton sees this manifest as a structural shift in how ideas are evaluated. “This does have an effect in boardrooms in the form of hesitation or over-scrutiny of equity-centered ideas. What felt like an obvious business strategy just a few years ago is considered political and requires excessive justification.”
This is a critical inflection point for an industry that has historically relied on cultural cross-pollination. “The beauty industry knows better,” she said. “It has always found inspiration and borrowed innovation from communities of color, queer communities, and global beauty traditions. These audiences are crucial to how beauty trends begin, spread, and monetize.” In other words, the very consumers being deprioritized in strategy remain central to growth.
While brands tread carefully, consumers are becoming more assertive and more polarized. Overton described a bifurcated landscape. “Some consumers relish the ‘anti-woke’ effect on advertising. Conversely, there’s another class of consumers who are more discerning and less patient with lazy execution around inclusion.”
This second group is asking sharper questions like “Who was this made for?” “Who signed off on this?” “What’s really real and what’s for show?” Younger consumers, in particular, are accelerating accountability. “Gen Z and younger millennials move at TikTok speed to light up comment sections before a formal crisis team has opened a laptop,” said Overton.
Yet at a foundational level, Huggins insisted the expectation has not changed. “Consumers still want to see themselves.” Where behavior has evolved is in spending. “100%,” he said, alluding to the fact that anti-DEI rhetoric is impacting purchasing. “Conscious Black consumers and their allies are not [shopping at] Target. Conversely, [they] are actively seeking out Black-owned brands in the name of solidarity.” This signals a more intentional consumer economy, one in which purchasing becomes both a cultural and a political act.
At the same time, consumer intent points to a clear path forward. According to the same McKinsey & Company report, 83% of Black consumers say they prefer to purchase Black-owned brands, suggesting that demand is not the issue, but access, visibility, and sustained investment are. As purchasing becomes more values-driven, particularly in a politically charged climate, this preference is translating into more deliberate spending behaviors and shifting brand loyalties.
As the industry recalibrates, the gap between performative and structural equity is widening. “Real commitment leaves fingerprints all over the business,” said Overton. This can be visible through assortment, supplier diversity, media allocation, who gets hired or promoted, and who sits on the board. By contrast, trend-aligned companies tend to be great at optics. However, weak systems show through.
Overton’s litmus test is simple: “If the language disappeared tomorrow, would the work still be happening?”
Huggins offered a sharper distinction. “Brands that continue walking the walk despite the risks are clearly committed, while those rebranding their efforts are simply being opportunistic at best or cowards at worst.”
Behind the scenes, however, companies are managing a complex matrix of risks. “The internal conversation is usually about risk—political, reputational risk, legal, talent, shareholder,” said Overton. Leaders are asking, “How do we continue to serve a diverse market without becoming a target?”
This tension is acutely felt by those leading DEI efforts. In some organizations, employee resource groups, now often rebranded as “business resource groups,” are gaining influence. In others, they remain symbolic. Overton warned that without tangible ties to recruiting, retention, compensation, product, or strategy, these initiatives risk becoming hollow, leaving employees deprioritized and even used.
These experts agree that, three years from now, the language may fade—but the underlying dynamics will not. “I think the acronym itself may be less visible, but its principles will still be alive,” said Overton. Huggins suggested that the industry needs to reimagine what DEI can be under these conditions.
That reimagination will likely center on power, including who controls resources, who shapes narratives, and who benefits from growth. Because despite political headwinds, one reality remains unchanged: beauty is too global, too multicultural, too age-fluid, and too trend-dependent to turn back. The industry may be speaking more quietly, but the business case for equity has never been louder.