The Rise of Supplier Diversity in Retail: Promoting Inclusion and Innovation
Supplier diversity is a concept that has gained increasing importance in recent years, particularly in the retail sector. The idea is simple: by increasing the number of diverse suppliers that a company does business with, it can promote diversity in its supply chain and, by extension, the broader economy.
Shipt, a leading online grocery delivery platform, is one company that has recognized the importance of supplier diversity. In 2020, the company announced its commitment to spend at least $10 million with diverse suppliers over the next three years. This includes businesses that are owned by women, people of color, veterans, and members of the LGBTQ+ community.
Lululemon, a well-known apparel brand, has also made supplier diversity a priority. In 2020, the company launched its “Equity, Diversity and Inclusion Action Plan,” which includes a commitment to increasing the number of diverse suppliers it works with. The company has set a goal to achieve 20% diverse representation across its global vendor base by the end of 2023.
Beyond the social and cultural motivations to promote DEI initiatives, how useful will supplier diversity programs and strategies actually be for retailers? Supply management pros have been touting the benefits of diverse suppliers, including the opportunities that come along with these initiatives that let companies tap into new markets, gain access to innovative products and services, and foster a culture of inclusion.
How can retailers make sure their supplier choices are actually leading to a more diverse and resilient supply chain? What needs to accompany supplier diversity decisions to measure ROI? Aniela Unguresan, founder of leading DEI certification standard EDGE Certified Foundation & of SaaS-based DEI solution EDGE Empower, gives her perspective on how retailers need to approach implementing effective diversity strategies across their supply chain.
“Programs to increase supplier diversity can be sustainable and could make a positive impact on the diversity of a retailing sector in general if there are clear ways to measure current status, track progress, and if there is accountability for results. It would also be important that participation in such programs is a precondition in becoming a supplier of a specific brand and or unlock access to preferential business terms and conditions with the brands.”
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