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"Rainbow retail" a biz opportunity in Pride Month and beyond

Retailers roll out rainbow merch for Pride
Retailers capitalize on Pride Month with rainbow merchandise 01:15
  • Businesses big and small are rolling out rainbow-themed merchandise for Pride Month to draw LGBTQ consumers.
  • What some marketers call the "pink dollar" is worth an estimated $917 billion annually to businesses.
  • But efforts must be genuine: LGBTQ advocates say members of the community can identify inauthentic "Pride clutter."

Like Halloween, Christmas, and Valentine's Day that come before it, LGBTQ Pride Month — a four-week celebration including parades and marches honoring the 1969 Stonewall Inn uprising in Manhattan and the LGBTQ community's civil rights progress ever since — has become a major selling season in the American retail calendar.

Brands ranging from Johnson & Johnson-owned Listerine mouthwash and Harry's, a men's care brand, to clothing makers Ralph Lauren and Michael Kors have rolled out rainbow-themed designs and products to celebrate the occasion.

Restaurants have bit into the theme too, adding special-edition food items — in rainbow hues, of course — to their menus: Shake Shack is selling a Pride Shake (a cake batter shake topped with rainbow glitter sprinkles) and Fresh&Co has a special Pride Menu, including the Love Salad and Rainbow Sandwich, available for the month of June.

Service providers like FlatRate Moving and New York City's subway and bus system are also celebrating the 50th anniversary of the Stonewall Inn uprising with rainbow decals and special edition metro cards.

Why is the rainbow flag — designed by San Francisco artist Gilbert Baker in 1978 and later adopted as a universal LGBTQ symbol — seemingly everywhere? "Diversity and inclusion are good for business, period," answered Jonathan Lovitz, senior vice president of the National LGBT Chamber of Commerce (NGLCC).

The rainbow connection

Rainbow retail has become the norm, not the exception, as businesses big and small increasingly use the occasion of Pride Month to sell merchandise, win over consumers year-round, and donate to LGBTQ causes while they are at it. "We are in an exciting place now where the list of people not publicly supporting us is far smaller than people who are," Lovitz said.

Just follow the money: America's LGBTQ community holds an estimated buying power of $917 billion annually, according to the latest data from the NGLCC.

"Retailers realize and understand that the 'pink dollar' is good money to have coming into the story regularly, not just during Pride Month," said Simon Fenwick, executive vice president of talent and inclusion at the American Association of Advertising Agencies.

The 2019 Edelman Trust Barometer: How much do conumers trust big brands? 06:38

"The community and their extended families have become good and loyal customers and so, beyond wanting to do good, businesses are seeing that they have long-term, valuable customers in the LGBT community," Fenwick said.

Indeed, 78% of LGBTQ community members said they are inclined to support companies that market to and support LGBTQ people, according to report by Community Marketing & Insights, an LGBTQ-focused business research firm.

"That's why it's so important for companies that advertise rainbow merchandise or that march in Pride events to make sure those commitments don't end on June 30, and recognize that LGBT inclusion is 7 days a week, 365 days a year," Lovitz said.

This is well-understood by wireless provider Verizon, a corporate giant with more than $130 billion in revenue that for a second year has partnered with PFLAG, the nation's oldest organization uniting LGBTQ people and their families, to help it build programs, call centers and education resources in underserved communities.

As Diego Scotti, Verizon's chief marketing officer, explained in an email to CBS MoneyWatch: "Verizon's customers are diverse across the spectrum in gender, race, age, sexual orientation, culture, etc., so our marketing needs to be inclusive of our base."

Verizon LGBTQ pride campaign "Love Calls Back" 01:00

In general, consumers of all kinds say that their purchase decisions are driven by companies' social and political stands. Two-thirds of consumers worldwide identified themselves as "belief-driven buyers," indicating that they expect brands "can make change and not just talk about it and do advertising," Richard Edelman, president and CEO of Edelman, recently told CBSN. "They have to take can't do brand-washing, you can't just buy people's attention," he said.

"It's a new day. You can't just advertise and expect people to believe you. You have to do something. You have to live your mission and you have to actually take the risk of doing it," Edelman said.

Standing out from "Pride clutter"

Many companies that wave the rainbow flag at consumers do give back, LGBTQ advocates say. Major examples include:

  • Swedish furniture retailer Ikea partnered with the Human Rights Campaign Foundation (HRCF) to release a Pride version of its iconic blue shopping bag for $3.99, with all proceeds going toward HRCF's educational programs for LGBTQ people. 
  • Target this month launched a special 90-item Pride collection and donated $100,000 to GLSEN, an organization dedicated to making schools safe and inclusive for everyone. 
  • AT&T continued its multiyear partnership with the Trevor Project, a provider of life-saving services, to which it donated $1 million in 2018. AT&T also powers the Trevor Project's text and chat counseling services for potentially suicidal LGBTQ youth.

But there also can be a lot of "Pride clutter," and authenticity is key to businesses standing out, according to David Paisley, senior research director at Community Marketing & Insights. 

"The LGBTQ community wants companies that are authentic, and that means having a 12-month strategy, treating LGBTQ employees well, and showing that they support LGBTQ non-discrimination policies both in their own corporations and also things that are happening in the government," he said. 

Otherwise, it can appear like retailers are just exploiting sexual orientation for profit. "Pride is important, but companies that just outreach during Pride Month are suspect. When we look at brands that are doing the best job, they are showing genuine, authentic LGBTQ support through outreach and policies," Paisley said. 

New documentary explores the state of gay pride in America 04:38

Companies that are successful in making the rainbow connection show a "year-round, trickle-down, 360-degree commitment to the community," NGLCC's Lovitz said. 

"Just plopping the rainbow on packaging doesn't mean you are LGBT-friendly or supportive. If you include us authentically all year long, it's not as much of a shock to the system when a rainbow appears because you had us on the journey with you all along because you were showing interracial lesbian parents in your toothpaste ads in October, not just in June," Lovitz said.

It's never been easier to vet a business — the HRC Foundation's Corporate Equality Index rates workplaces based on LGBTQ equality — and the onus is on consumers to do their due diligence before patronizing businesses.

"It means going much deeper than hoping to see your favorite brand represent the community with a pride flag. Ask what they are doing with that economic loyalty. Are they donating proceeds from every purchase to causes that support us year-round? Are they investing in LGBT-owned businesses to make the goods they are selling?" Lovitz said.

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