diversity

Broken Promises: How DEI Rollbacks Are Deepening The Brand Trust Crisis

  
Target's Black History Month items sparked outraged comments on social media, criticizing what many consumers see as brand hypocrisy.

 

A new study reveals that consumer trust in brands is eroding, with diversity rollbacks becoming a key flashpoint in an already widening gap.

Some 80% of those in Collage Group’s latest wave of data say inclusive marketing is equally or more important to them today than in 2020, and 39% say they’ve purchased from a brand expressly because that company’s ads represent diverse people in ways that seem authentic.

Since President Donald Trump’s re-election, many companies -- including Target, Walmart, McDonald’s, and Toyota -- have rolled back DEI initiatives. As a result, 30% of consumers (about 86 million people) plan to cut back spending on these brands.

That meshes with other research, including a recent Harris Poll published in the Guardian, which found that by mid-February -- even before boycott and Economic Blackout plans solidified on social media -- 24% of consumers said they’d already stopped shopping at their favorite stores.

And while there’s no conclusive data available yet that these efforts, including the recent Economic Blackout Day, are hurting sales, preliminary indications show these consumer-led boycott groups could hurt financial performance.

The uproar reflects problems that go much deeper than a single issue. “Many brands have been spiraling down a reactionary cycle for years,” the report says. Brands start with grand promises, retreat to moderate promises, then degenerate into empty promises. For consumers, that’s led to a parallel downward cycle of disappointment and backlash.

The result is a gaping trust gap: While 80% of consumers say brand trust is essential when making a purchase, only 40% believe brands and companies are trustworthy.

DEI isn’t the only measure of trust, or even a large one. A personal positive experience with the product or service is the essential way brands build trust, named by 61% of respondents, followed by friends and family recommendations (47%), timely and personal customer service outreach (39%), transparent business practices (37%), and fair treatment of staff (32%.)

A stated commitment to diversity was named by just 25%, with support for “social causes I care about” mentioned by 24%.

Before their DEI pullbacks, Walmart and Target had high trust levels compared to other retailers, with 83% of consumers saying they trusted Walmart and 82% saying they trusted Target, according to Collage.

In the weeks following announcements from both companies saying they would no longer support efforts promoting internal diversity and inclusion, Walmart has somehow managed to maintain more of that trust, with Collage’s measure of brand momentum among multicultural consumers up nine percentage points, and increasing by six percentage points among white shoppers.

Consumers believe Walmart is holding up its primary and highly transactional promise: everyday low prices.

For Target, the reverse is true. Consumers read the DEI retreat as an abandonment of core promises. Momentum among multicultural shoppers fell three percentage points and dropped seven percentage points among white shoppers.

“Target is stuck in a repeated, reactionary cycle of dramatic reversals,” the report notes, “with the latest policy changes, misaligned with established brand values, continuing the downward spiral. The brand is now extremely vulnerable to double backlash and accusations of performative allyship.”

Early in February, Target launched a Black History Month collection, drawing widespread hisses and boos on social media. “Did you think we forgot???” posted one critic. “Babes Babes it hasn’t even been a month.” Added another: “Anyways, y’all need anything from Costco?”

Collage says the findings underscore messages for all marketers, no matter where their corporate parent lands on the political spectrum. For those at companies that are standing by DEI policies, a list that includes Costco, Apple, Delta Airlines and E.L.F., it’s vital to do more than just stay the course. Collage says stepping up core brand value propositions, and increasing transparency efforts to reach out to multicultural growth segments, will all increase trust.

For those working at brands that have eliminated or watered down efforts, marketers need to “chart a new course.” That likely entails increasing efforts to track consumer sentiment, developing proactive response playbooks, and building new relationships with diverse creators.

1 comment about "Broken Promises: How DEI Rollbacks Are Deepening The Brand Trust Crisis".
Check to receive email when comments are posted.
  1. John Caldwell from JACaldwell Inc, March 6, 2025 at 11 a.m.

    This article tries to claim that consumer trust is eroding due to DEI rollbacks, but it contradicts itself and ignores the bigger picture of why people actually buy from brands. Right away, it pushes the idea that DEI is a key driver of trust when, according to its own data, only 25% of consumers consider a commitment to diversity important. That’s far behind factors like product experience (61%), recommendations from family and friends (47%), and good customer service (39%). If trust is really falling, it has more to do with companies failing to deliver value and consistency than rolling back DEI initiatives.

    It also misuses polling data. Saying that 30% of consumers “plan” to cut back on brands that moved away from DEI efforts doesn’t mean they actually will. People often claim they’ll boycott something over politics, but when it comes down to it, price and convenience win. Look at Walmart—the article admits that despite its DEI pullback, trust in the brand has actually gone up among both White and multicultural shoppers. If these changes were really alienating consumers, Walmart should be losing trust, not gaining it. Meanwhile, Target’s struggles aren’t because of DEI rollbacks but because it’s been inconsistent in its branding and decision-making. The article even acknowledges that Target has gone through “dramatic reversals,” which makes it seem unreliable to customers.

    Then there’s the attempt to use social media outrage as proof that consumers are turning on brands over DEI decisions. Twitter comments about Target’s Black History Month collection aren’t real market indicators. Social media outrage is mostly performative, driven by a small but loud group of people who often don’t even shop at the stores they’re complaining about. What actually moves the needle for companies is whether people are spending money, and there’s no real data showing that these so-called economic boycotts are having a meaningful financial impact.

    At the end of the day, the article is trying to force a narrative that doesn’t hold up. Brands succeed when they stay true to their core promises, offer good products, and give customers a reason to keep coming back. Walmart proves that if a company delivers on what people actually care about—like low prices and reliability—then political posturing, whether for or against DEI, doesn’t really matter. Target’s decline has more to do with its business missteps than its stance on diversity. The real lesson here is that consumers reward consistency and value, not pandering or reactionary politics.

Next story loading loading..