Ep. 71 – Affirmative Action for End Caps

JUNE 1, 2022

Welcome to Episode 71, Affirmative Action for End Caps.

George Floyd’s tragic murder in 2020 accelerated many long-term cultural shifts in America. But, one cultural change, the uptake in retail merchandising of minority-owned businesses, has developed a bitter irony: an uptake in large chain retailers trying to increase minority supplier access to their shelves AND not much more. 

Walmart, Albertsons, and Target have announced renewed or expanded minority supplier programs in recent years. Target even has a global accelerator program with an entire website for these companies. 

But are retailers doing all that they could to help founders with high potential, early-stage brands gain marketplace advantage? 

Before I weigh in, let me share a story from my college days that I’m going to use as a crude analogy. This was 1990-1994, folks. So, although I grew up in the second most white state in the U.S. – New Hampshire, I went to the most racially diverse college in America at the time – yes, that one in Western Cambridge, MA. 

Wide-eyed white honkey from New Hampshire got himself a rude introduction to multiculturalism on the first day. 

I had a black roommate in the first year, my bunk buddy. The guy was a high school linebacker. Not a small guy. So, I offered to take the top bunk since I weighed roughly 83 lbs. OK, I was joking; it was more like 55 lbs. 

Why are you laughing? 

He had had a strong GPA at his high school in the Midwest, but it became pretty clear by the second semester that he was struggling…a whole hell of a lot. The sheer workload Harvard throws at students is not to be under-estimated. Even by the 1990s, the good ‘ole days of the gentleman’s “C” were over. Harvard was already dominated by the type A over-achiever, almost always viewed by the administration as White or Asian. It was competitive. 

My roommate, however, was stuck with a white football recruit, a wrestling recruit, and a red-headed nerd boy with poor social skills. He hung out with us most of the time. Now that’s open-minded, folks. 

The entire year, I never once saw any evidence of the college reaching out to pay special attention to his adjustment to Harvard standards. He was left to figure it out himself, including whether or not he needed help. I love that. Let’s let 18 -year-olds diagnose their academic problems miraculously and ask for just the proper support (which they may have no money to pay for in this case if it needs to be private). 

Who invented this messed-up society?

Now, if you were a straight-A student from most likely NOT the best high school and you got into Harvard back then, are you going to admit to anyone there that you need a whole bunch of help….that YOU were the incorrect admission….at the age of 18? Probably not. And now, if you’re black and in the same situation, how much more humiliating would it be to ask for this help? 

A lot. 

Because it places you in a racist box as old as slavery itself and one which I will not describe here. 

That poor kid was utterly alienated and had no skills or administrative outreach to help him adjust. Yes, he had friends, but they didn’t understand what I’m describing here. I didn’t understand what I’m describing.

So, a few years later, I found out he had flunked out and never graduated. And this was not a dumb person by any means. 

Harvard admissions gave him the advantage of being let in, but he didn’t have the skills to thrive, AND the college didn’t lift a finger to address his needs once he was there. 

Welcome to Harvard, kid. You are now an alienated, lone individual fighting for an A all by yourself!!! Good luck, chap! 

What the fuck does this have to do with retailer programs for minority founders? 

OK, here we go. I bought media liability insurance just for this kind of episode. 

Well, it’s great that folks like Target are actively vetting and coaching serious minority-owned brands before they approach retail chains like theirs. And they are doing it for free. Bravo. Historically,  this kind of retail-ready operator knowledge restricted to industry vets (who all look like me) or offered behind various paywalls. 

Target Takeoff will coach you on how to win a line review at Target and then set it up for you. That’s probably the most impressive effort I’ve seen so far.

But, hey, remember my college roommate? The bright, black kid from an ordinary middle-class family who got no special supervision or outreach from Harvard College? And then basically flunked out.

If he were going to compete with punks like me for grades, he would have needed loads of assistance AFTER her got in. Not before. And someone would have had to insist he get it proactively, even set up a quiet, discrete program to offer it. Harvard had no such minority program back then.

Programs like Target amount to an admissions coaching program. Not a bad thing at all, even for college applicants.

But, this does not level the playing field once you’re in, folks. Not at all. The disadvantage doesn’t end withy onboarding on the shelf. Not at all.

Because Target’s management of shelf space and displays still defaults to the calculus of the moment regarding how they can maximize profit per linear foot (among other KPIs), category by category, desk by desk.

What my college roommate needed was a free tutor, subsidized by Harvard at the very least, once he was inside. 

At Target or any other chain early on, minority-owned businesses need a shelf advantage that only money can buy. 

My dad bought me an elite private high school education, so I didn’t need the tutoring at Harvard. It doesn’t mean I was brighter than my roommate, just better resourced to succeed. The admissions committee set him up to fail. And he did. 

In what I call Phase 2 of early-stage brand development, when national chain accounts become relevant and more feasible to support, minority founders need money in most cases. They also need free access to display space to spend their money on building awareness to drive traffic to the display. 

I have yet to see a single retail chain take a profit hit directly in support of boosting velocities for their minority suppliers. It means to say no to Pringle’s end caps and put in a high-potential seven-figure brand from a minority founder. 

If anyone knows a grocery chain doing such a thing, please e-mail me at [email protected]. Whoever it is, deserves public praise…if such a retailer exists. 

We need affirmative action for endcaps. Because until you pierce the corrupt bubble of the pay-to-play areas of merchandising, which always favors wealthy, overfunded founders, you don’t change the success rate for minority founders, at all. We talk about the low percentage of venture capital going to minority founders. You should look at the insanely high failure rate of minority-owned small businesses.

I wish retailers would focus less on creating PR-friendly accelerators and pushing lots and lots of companies through them as an act of philanthropy (so they can boast about the number they’ve helped). Instead, they should pick 1/10 the number of companies, give them $100,000, not $5,000, AND then deliver some bad news to Kelloggs about those routine Pringles endcaps. 

I won’t hold my breath. So, I wouldn’t either if I were you.