If the events of the past year and change have taught us anything, it's that being Black in America comes with its share of challenges and disadvantages. And that extends to Black-owned businesses.
It's these very struggles that spurred the creation of the 15 Percent Pledge, an advocacy group whose mission is to urge major retailers to commit 15% of their shelf space to Black-owned businesses and products. While the 15 Percent Pledge started out as a social media plea, it has since evolved into a full-fledged platform designed to help major retailers address inequality issues and just plain do a better job of giving minority-owned businesses a chance.
Nordstrom (NYSE: JWN) is one such major retailer with the potential to foster change. And so far, it's doing its part by signing a 10-year agreement with the 15 Percent Pledge. As part of that arrangement, Nordstrom has committed to a tenfold increase in purchases from and partnerships with Black-owned brands by the end of 2030. It's a step in a positive direction -- and one that could really work to Nordstrom's benefit.
What does the pledge entail?
The 15 Percent Pledge implores retailers to do the following:
- Take stock of how much shelf space Black-owned businesses get at present.
- Publish those findings internally and externally for full accountability.
- Create and execute a plan for incorporating more merchandise from Black-owned businesses.
Retailers that incorporate the pledge can buy themselves more than just goodwill. They can also expand their product lines to appeal to a wider range of customers.
In an age when there's so much competition for retailers, both from stores and online giants, supporting Black-owned businesses is a strategic move for Nordstrom. As a higher-end department store catering to higher-income customers, Nordstrom may, albeit unintentionally, alienate certain clientele. By committing to the 15 Percent Pledge, it might manage to change customers' perceptions -- and bring more people in the door by diversifying its product offerings.
Of course, if that were to happen, it would be great news for real estate investors. The coronavirus pandemic hammered retailers and caused many to close down underperforming store locations. As a result, malls and shopping centers are now grappling with vacancies -- and losing revenue in the process.
Malls especially have it bad. Their enclosed nature drove customers away during the pandemic due to health-related concerns. And now, a growing number of retailers are opening off-mall locations in an effort to lure shoppers away from the competition while accommodating pandemic-related fears. If Nordstrom manages to grow its customer base, it could solidify its position as both a mall and shopping center anchor tenant. And that alone could help mall REITs (real estate investment trusts) regain some of the value they'd lost in the course of the coronavirus crisis.
Nordstrom isn't the only department store to commit to the 15 Percent Pledge. Both Macy's and Bloomingdales have also signed on board. And if more retailers follow, it could, in time, change the face of retail, all the while encouraging customers to support more Black-owned businesses on a whole.