(photo source: Shea Moisture via Blavity)
On paper, Shea Moisture’s game was by the corporate playbook. When you’re in your startup phase, you identify an underutilized niche market with high spending potential. Black women were the perfect customer base. We spend an unprecedented amount on beauty products every year, yet we’re often ignored by the marketplace and have long been frustrated with the lack of hair products designed for our varying textures and curls. In steps Shea Moisture with a line of products that seemed tailor made for our hair and a suitable back story that made us feel proud to make a purchase.
Our initial support provided Shea Moisture with the steady revenue to scale up and make their products available on the shelves of local retailers like Target, Rite Aid, etc. Next, Shea Moisture’s shelves got more colorful as they added new product lines to address a varying range of needs. But a growing business is always looking for more customers and investors want to see exponential growth. This is common and often necessary in the business world, but Shea Moisture’s move was a disaster. So what went wrong?
For any startup, part of your appeal to investors is your ability to scale up to expand past your initial consumer base and grow exponentially. Often this comes in the form of moving from a small but dedicated niche of costumers to target the larger mainstream market. Founder Richelieu Dennis sited the need to expand in an interview in 2015 after taking Bain Capital, LLC on as an investor. (Note in the article the reaction of customers to an early social media ad featuring only white children which should have foreshadowed this week’s backlash.) This is the growth model for most industries and many brands have successfully made the transition.
For instance, Marvel and DC Universe were once the exclusive destination for a niche audience of adult comic nerds. When they scaled up with tentpole summer films that catered to a mainstream audience, the nerds were not thrilled with the watered-down-for-mainstream consumption versions of their favorite superheroes. They were actually quite vocal with their opposition just as the internet was opening new avenues to publicly air your grievances on chat rooms and forums. Through some heavy PR strategy, the studios were able to appease the nerds and the comic film franchises have gone on to earn billions.
A more sobering example is Mod Cloth which began as a destination for plus sized women to find fun fashionable funky designs in sizes that flattered their figures. But as Mod Cloth grew (and was purchased by Walmart) and found success based off this initial group of consumers their idea of scaling up meant abandoning the plus-sized models on their homepage for skinnier more mainstream models. Their original base felt betrayed and Mod Cloth took a dive in popularity.
The problem with Shea Moisture is that the customer base they built their foundation on was not a body size or chosen field of interest, it was a racial demographic. And while the shift in audiences made by Marvel, DC and Mod Cloth can be criticized as “selling out” or simply “going mainstream,” there’s a much stronger term when race is involved - “whitewashing.” The film industry has taken a lot of flack for this with recent films like Ghost in the Shell, Aloha, the new miniseries Guerrilla and that unfortunate Nina Simone biopic that shall not be named. Apparently the leaders at Shea Moisture have not been paying attention, and they walked head first into a perfect storm in which black women have become increasingly vocal online, Americans have become increasingly sensitive to whitewashing, and Beyonce came out with Lemonade’s Formation last year - not a good time to come out with an ad excluding the black women who made your brand successful.
It was a definite misstep on Shea Moisture’s part. While it was technically sound from a coprorate perspective, it was tone deaf in every other way. It's important to remember that when working from the corporate playbook, if your original niche is based on a racial demographic, suddenly abandoning them for a "general" audience has an unsavory undertone. And social media will put you on blast. Companies beware.