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Supplier Diversity Blog by supplier.io

Does Supplier Diversity Help Satisfy Customers' Needs?


As supplier diversity professionals, we focus a lot on the B2B aspect of our work.

Identifying potential diverse suppliers, implementing supplier development initiatives to build a strong, sustainable, diversified supply chain—these are worthy pursuits, but let's not forget the other reason working with diverse suppliers is good for business: the consumer. 

The direct link between supplier diversity and meeting customer needs is still a new area of research, but evidence supports the idea that a company invested in supplier diversity is more attuned to shifting demographics and consumer needs.

[Download the Reports] The 2021 State of Supplier Diversity

Here are four customer-facing ways supplier diversity is good for business:

Changing Demographics

By now, you've heard the statistic repeatedly: According to Census data, by 2044, there will be no racial or ethnic majority in the United States.

As the population diversifies, understanding consumer needs requires more diversity of thought and talent.

Fortunately, Census data collected in 2010 also tells us that between 2000 and 2050, new immigrants and their children will account for 83 percent of the growth in the working-age population.

We're already witnessing a shift in the workforce as Millennials enter the job market and Boomers retire. As this Deloitte University Report shows, the digital generation is 38% more likely to be actively engaged when they believe their organization fosters an inclusive culture.

With Generation Z coming of age soon, the two most diverse population groups in our nation's history are poised to change the way we work and how consumers relate to businesses.

In addition to a demographic shift in the workforce, the number of non-majority-owned companies is also booming.

In a 2017 report commissioned by American Express, data shows that the number of U.S. businesses owned by women has more than doubled in 20 years, as has their revenue.

Women are starting an average of 849 new businesses per day, and woman-owned businesses are growing at 2.5 times the national average. Within those figures lies another important fact: While the number of women-owned businesses grew 114 percent from 1997 to 2017, firms owned by women of color grew at more than four times that rate (467 percent).

These minority women-owned businesses employ more than two million workers and generate $361 billion in annual revenue.

Similarly robust growth is happening in other minority categories, which means the overall number of diverse suppliers is growing rapidly, reflecting the overall shift in our country's demographics.

Why is this relevant?

Because each of these business owners is also a consumer, and they represent many other consumers who shop the way that they do.

Meeting Customers’ Needs

The ultimate goal of any company is to deliver products or services that meet the needs of its customers.

We identify a problem and come up with a solution. That requires innovation and a competitive edge.

Over and over, we've seen how a diverse supplier has brought cutting-edge technology or a new perspective to a product, changing the way we think about familiar objects.

For example, how many times have we half-jokingly wished our coats contained heaters in the dead of winter?

This is no longer a fantasy.

During the 2018 Winter Olympics, Team USA wore Ralph Lauren jackets with built-in printed heaters.

Woman-owned Butler Technologies developed the conductive carbon and silver inks that were printed in the shape of the American flag on the back of the jackets. A lightweight battery pack and three heat settings allowed athletes to control the temperature of the printed heaters during the freezing days in Sochi.

How long do you think it will be before we see similar technology on the racks at retailers and available online?

Ralph Lauren identified a problem, then solved it with the help of a diversified supply chain.

Market Share

Representation matters to consumers.

In some cases, consumers report spending more money with corporations that have a focus on supplier diversity.

In a survey we conducted this year, 82 percent of respondents said the existence of a corporate supplier diversity program influences their decision to purchase from such a company.

In 2015, the purchasing power of African-Americans, Asian-Americans, Native Americans and Hispanic Americans in the U.S. reached $3.6 trillion. If the U.S. minority market was a country, it would be the sixth largest in the world based on GDP, right behind Japan, but larger than Canada, the UK, and Russia.

Think about all of the potential customers that exist in that minority market.

The opportunity to expand market share is enormous, and diverse suppliers can help you capture it by developing new products or simply altering your marketing to embrace minorities.

Consider this: Recently, global video marketplace Unruly created a stereotype analysis as part of its content testing solution, UnrulyEQ Max, which evaluates whether an ad’s content reinforces harmful gender stereotypes of women and men.

Research by JWT New York and the Geena Davis Institute on Gender in Media suggests the ad industry is guilty of “forgetting about women,” with ads twice as likely to feature male characters than female characters, and women 48 percent more likely to be shown in the kitchen.

While this research focuses on women, it only takes a couple of commercial breaks or trips to the newsstand to see that representation in advertising is a problem for people of color as well.

We've seen numerous high-profile ad campaign failures play out on social media as a result of brands not considering the minority market.

Think about how a minority-owned agency with a diverse workforce could help you not only avoid similar failures, but pivot your marketing to reach the vast minority consumer base.

Economic Impact

More and more research shows that utilizing diverse suppliers has a significant positive economic impact on the communities in which they are located, directly affecting consumers.

A study commissioned by the National Minority Supplier Development Council (NMSDC) illustrates that their certified MBEs alone have a total economic impact of over $400 billion in output that results in the creation of and/or preservation of more than 2.2 million jobs held by persons who find themselves either directly or indirectly employed by NMSDC-certified MBEs.

These same minority suppliers are also generating close to $49 billion in tax revenue for the benefit of local, state, and federal governments.

When we partner with diverse suppliers, we are strengthening their communities' economic base which means consumers have more buying power.


Let's not forget the consumer when talking about the benefits of supplier diversity.

They should be at the forefront of procurement strategies, whether the goal be increasing market share, identifying and solving consumer needs, or simply strengthening the economic base in our communities.

How has your supplier diversity program helped satisfy a customer need?


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The team has a long history in driving innovative solutions in supplier diversity. We believe that companies deserve solutions that are effective and provide measurable value and results. Started more than a decade ago, supplier.io has rapidly become a prominent provider of supplier diversity solutions to leading corporations. We currently support customers in automotive, healthcare, insurance, retail, manufacturing, education, and banking. One in five Fortune 50 company relies on supplier.io.