President Donald Trump has sparked international debates in just a few weeks of returning to office. Whether it’s the imposition of tariffs, an influence in TikTok’s uncertainty in the US, or America’s trade relationship with China, it is a stark representation of how governmental policies can impact citizens. Trump has also reignited debates around diversity, equity, and inclusion (DEI) in corporate America. With his recent executive orders dismantling federal DEI programs and limiting corporate diversity initiatives, industries that have made strides toward inclusivity—like beauty—now face an uncertain future.
The business of beauty, long criticized for its lack of representation, had made progress in recent years through inclusive product lines, funding for minority-owned brands—although in a fast plummet in comparison to past years—and workforce diversity programs. However, with corporations now rolling back DEI initiatives and investors growing wary of “woke capitalism,” the structural challenges facing Black and POC-owned beauty businesses are becoming even more pronounced.
The Corporate Response: A DEI Retreat or Resistance?
The beauty industry is split on how to navigate the new anti-DEI climate. “If history tells us anything, it’s that progress is often met with resistance. We’ll see who has the courage to stand by their pledges. This isn’t just about policies, it’s about principles,” Dwight Allen O’Neal, Co-Founder of the Black-owned retail consultancy company, Rose Neal Collective, says to BeautyMatter. Rose Neal Collective includes a portfolio of Ulta Beauty, Sephora, Issa Rae’s Sienna Naturals, Live Tinted, etc.
Several major retailers that previously championed diversity are scaling back their commitments. Walmart and Target, two of the biggest distributors of mass-market beauty, have already announced plans to pull back from their DEI-focused hiring and supplier diversity goals. Target, in particular, has stated that among many other things, it would be taking actions, including concluding its three-year DEI goals, as well its Racial Equity Action and Change Initiative, to which it had previously pledged $2 billion. “Companies that backtrack now are not just failing their commitments; they’re failing the future. True diversity is more than a policy; it’s a practice. Those who genuinely value it will find ways to continue, regardless of political climates,” O’Neal continues.
Yet, not all corporations are falling in line. JPMorgan and Costco have publicly affirmed their commitment to DEI, despite shareholder and political pressure. “We believe our DEI strategies, programs, and initiatives are well-conceived, rightly intended, and executed in a way that reasonably manages risk. We will continue to review our approach and programs as the law develops further in this area and make adjustments as appropriate based on our firm objectives and legal requirements,” JP Morgan CEO Jamie Dimon says to Fortune.
In beauty, Sephora remains vocal about its The 15% Pledge, which ensures that at least 15% of its shelf space is dedicated to Black-owned brands. On January 24, it premiered its first international film, Beauty & Belonging, a documentary directed by filmmaker Anastasia Mikova, featuring conversations with more than 75 Sephora employees and founders of beauty brands including Makeup by Mario and Glow Recipe.
The Retail Fallout and the Risk of Brewing Consumer Backlash
Beyond funding, the rollback of DEI could also affect shelf space and distribution for minority-owned beauty brands. Retail partnerships have been instrumental in bringing brands like The Lip Bar, Donna’s Recipe, and Mented Cosmetics to mainstream audiences. However, if major retailers are stepping away from DEI commitments, the risk is that Black-owned brands could lose visibility and retail support. “We are the largest Black-owned beauty brand in Target, so of course we were disappointed,” Lip Bar founder Melissa Butler says in a statement. “[However], I’m not that surprised. I always thought that the 2020 commitments were a farce … and Trump is emboldening companies to reverse commitments that they never wanted to do in the first place,” she continues.
Experts like Karess Roseme of Rose Neal Collective opine that over time, DEI has proven to always benefit companies and retailers through diverse perspectives in problem-solving and enhancing and diversifying financial performance, boosting not only employee engagement but also retention and overall economic growth. “Diversity drives innovation and growth. It’s a cornerstone of modern business ethics that companies should want to uphold,” she says. “Pressure might force some brands to rethink their strategies, but the ones led by people with conviction will persist. These leaders will navigate the challenges and continue their DEI programs because it’s essential to their identity and success,” she adds.
This DEI rollback, especially by retailers, of course comes with its potential consequences: fewer Black-owned brands making it onto shelves, less variety in product offerings for consumers of color, and a return to a market dominated by legacy brands with historically narrow shade ranges and product formulations. However, despite corporate shifts, consumer sentiment remains firmly in favor of inclusivity. According to data marketing agency and analytics company Kantar, 75% (up to three-quarter) of consumers globally say that diversity and inclusion—or a lack thereof—influence their purchase decisions.
Brands that therefore distance themselves from inclusivity could face significant backlash, including social media-driven boycotts and loss of customer loyalty. Consumers are already calling for this, although posing an even bigger risk for minority-owned beauty brands. “It’s heartbreaking to feel unsupported,” Tabitha Brown, founder of Black-owned Donna’s Recipe, says in a statement. Donna’s Recipe is in business with Target, Walmart, and Amazon. “However, if we all decide to boycott, so many of us would be affected. Our sales would drop, [and] our businesses would be hurt. If we all decide to stop supporting said businesses, our sales dwindle down, and the companies get to say our products are not performing, [enabling them to take us off the shelves],” Brown continues.
Beatrice Dixon, founder of The Honey Pot Company, weighs in on this. “I deeply respect [consumers] decision to boycott. However, we need to be mindful of the broader impact of our actions,” she says in a statement. “While Honey Pot Co. will be fine, many DEl-focused brands are set to launch at Target in 2025, and this could hurt them significantly. The first few weeks on the shelf are critical for these brands, as they determine whether buyers see them as a success worth keeping in stores. By boycotting Target entirely, you're also affecting the people who have worked tirelessly to bring their products to mass market—a key step for scaling and growing in the CP industry. Ultimately, the choice is yours, but I want to ensure you fully understand the ripple effects this could have. These amazing brands don’t deserve to bear the consequences of this situation,” she adds.
Many founders like KJ Miller, founder of the Black-owned Mented Cosmetics, found in Target and Walmart, say that resistances like this are nothing new to minority-owned businesses. “I don’t think this DEI rollback is going to change the way women founders like me do business. At the end of the day, we’re going to continue making products that speak to our consumers, and we’re gonna distribute these products via the avenues and channels with the least resistance,” she says. Speaking to the looming boycott, she says “Retailers rolling back DEI is very short-sighted … we’re seeing the calls of boycott which was very predictable. I [also] think consumers should use their dollars like their voice and spend their dollars with brands they decide care about them.”
The rollback of DEI initiatives is not only political, but a fundamental shift that could reshape the future of the beauty industry. The last years saw unprecedented progress in inclusivity, from expanded shade ranges to the rise of women, Black, and POC-founded beauty conglomerates. A reversal of these gains risks alienating consumers, stifling innovation, and setting back decades of progress.
