Feb 2, 2025 Story by: Editor
Black History Month serves as a time to honor the sacrifices of African Americans and recognize their invaluable contributions to society. Increasingly, it has also become an occasion for brands—from Coca-Cola to Sephora—to connect with consumers who prioritize diversity, according to Oren Reshef, an assistant professor of strategy and entrepreneurship at Olin Business School at Washington University in St. Louis.
However, corporations often struggle to execute meaningful Black History Month campaigns, with some missing the mark entirely—ranging from inauthentic messaging to outright offensive missteps. In an era of deep political division, even well-intended initiatives risk alienating certain consumer groups.
So, how can businesses create more equitable markets, appeal to diversity-conscious consumers, and steer clear of backlash? Research by Reshef, set to be published in the American Economic Review, highlights one effective strategy.
Reshef, along with co-authors Abhay Aneja from the University of California, Berkeley, and Michael Luca from Johns Hopkins University, examined the impact of a search feature introduced by Yelp in June 2020. This feature allowed users to easily identify Black-owned restaurants. Their analysis, spanning from April 2019 to August 2021, revealed that labeling a restaurant as Black-owned significantly boosted engagement—measured through online activity, phone inquiries, food orders, and in-person visits.
On average, Black-owned restaurants using this label saw a 67% increase in online traffic compared to previous levels. Similarly, when Yelp later launched a Latinx-owned business search feature, those businesses experienced a 60% increase in online traffic.
The study found that the effectiveness of this labeling largely depended on local consumer demographics and attitudes. The most significant gains were observed in predominantly white, left-leaning areas with lower levels of racial bias.
Although Yelp’s Black-owned business label emerged at the height of the Black Lives Matter movement, Reshef noted that timing alone did not account for its success. “For instance, nearly 10% of Yelp businesses labeled as Black-owned opted in more than a year after launch,” he said. Even these late adopters saw similar spikes in engagement once the label was applied.
In addition, a comparable initiative launched in 2023 by online furniture retailer Wayfair resulted in increased engagement and revenue for Black suppliers.
“A Low-Cost Change With Big Impact”
“Our research sheds light on an emerging tool for companies interested in social impact: making it easier for customers to find and then invest in companies in a way that aligns with their values. Our analysis shows revealing minority ownership—a relatively low-cost change—can improve the economic outcomes of minority-owned businesses,” Reshef said.
The Strategy Behind Supporting Minority-Owned Businesses
Consumer interest in supporting minority-owned businesses has surged in recent years, largely fueled by social movements like Black Lives Matter, which brought attention to racial disparities in the U.S., Reshef explained. This shift has led major corporations—including Amazon, Target, and Instagram—to implement strategies promoting market equity.
A common approach has been informing customers about the racial backgrounds of business owners. However, Reshef cautioned that this method carries potential risks.
“From past research, we know that revealing suppliers’ race on a platform can lead to an increase in discrimination. We have evidence of this happening on Airbnb and eBay, for example,” Reshef said. “As we approached this project, we were worried the same thing would happen on Yelp.”
A key factor behind Yelp’s success, he explained, was its opt-in approach. The Black-owned label appeared only to users who actively chose to search for Black-owned businesses, ensuring that the feature reached an audience already interested in supporting such businesses.
Another distinguishing factor was that Yelp provided relevant information without offering preferential treatment. “For example, if Yelp had offered a discount exclusively for orders from Black-owned businesses, consumer reaction may have been different,” Reshef noted.
A Model for Year-Round Equity
Yelp’s initiative presents a potential blueprint for businesses looking to advance equity during Black History Month and beyond.
“We expect firms to cater to consumer demands,” Reshef said. “If consumers want bigger cars, if they want cheaper products, we expect firms to produce them. If consumers want to have more Black-owned businesses and want a more equitable platform, I think that’s exactly what platforms like Yelp should be providing.
“This is a win-win situation: Consumers are happier because they’re getting what they want. Black suppliers are doing better—they’re increasing sales. And the platform is also doing better.” Source: PHYS ORG
