Sales Slump? Check Your Culture.

By OurOffice Team

The Tale of Two Companies

In today's dynamic business environment, the intersection of company culture and sales performance has become increasingly evident. Workplace culture, engagement strategies and DEI initiatives, once considered optional, now play a pivotal role in shaping consumer perception and, consequently, sales outcomes. This article delves into the tangible impacts of company culture on sales, drawing insights from recent developments at major retailers.

Target's Sales Decline Amid DEI Controversy

Target Corporation recently reported a 3.8% decline in comparable sales for the first quarter of 2025, prompting a downward revision of its full-year sales forecast. Several factors contributed to this slump, including reduced discretionary spending and tariff pressures. However, according to the company, a key contributor was the backlash following Target's decision to scale back its DEI initiatives. 

The company's rollback of diversity programs and reduction in LGBTQ-themed merchandise led to consumer boycotts and negative publicity, adversely affecting foot traffic and sales. (Wall Street Journal)

E.L.F. Beauty's Growth Through Inclusive Culture

In contrast, E.L.F. Beauty has demonstrated robust sales growth, attributing its success to a steadfast commitment to inclusivity, according to their CEO, Tarang Amin. The company's inclusive culture resonates with a diverse consumer base, fostering brand loyalty and driving sales. 

According to their February 2025 earnings report, E.L.F. reported 24 consecutive quarters of net sales growth, citing its commitment to community, values-driven marketing, and authenticity as key contributors. (E.L.F. Beauty Investor Relations)

The Business Case for DEI: Research-Backed Insights

A growing body of research confirms that inclusive workplaces aren't just good for employees—they're good for the bottom line.

• McKinsey & Company: Companies in the top quartile for ethnic and cultural diversity on executive teams were 36% more likely to outperform on profitability. 
• Deloitte: Organizations that embedded equity into their business strategy were 3x more likely to achieve customer loyalty and trust. 
• Harvard Business Review: Teams with inherent and acquired diversity were 45% more likely to report market share growth and 70% more likely to capture a new market. 
• Forbes: Values-driven consumers increasingly prefer to buy from inclusive brands. DEI is seen not just as risk mitigation but as a strategic growth lever. 
• SHRM: 76% of job seekers say diversity is important when evaluating companies. Inclusive workplaces also have 20% higher retention, positively affecting customer experience and sales continuity. 

Effective DEI Strategies

Proven Implementation Strategies 

To harness the benefits of DEI, organizations should consider the following strategies:

1. Leadership Commitment: Senior leaders must champion workplace culture initiatives, setting the tone from the top.
2. Inclusive Policies: Develop and enforce policies that promote equity and address systemic biases.
3. Employee Resource Groups (ERGs): Support ERGs to provide safe spaces for underrepresented groups and foster belonging inside the company.
4. Continuous Education: Implement ongoing training programs on unconscious bias, allyship, and cultural competency.
5. Transparent Metrics: Regularly track and report workforce metrics to assess progress and ensure accountability.

Addressing DEI Criticisms and Misconceptions

Some argue that DEI initiatives may alienate certain customer segments or distract from core business objectives. However, the data suggests otherwise. 

In fact, DEI-aligned companies often experience enhanced brand reputation, greater customer trust, and increased access to new markets. It's critical to distinguish between performative actions and authentic, systemic DEI work—the latter is what drives sustained value.

The Role of Storytelling and Authenticity

Beyond statistics, human stories reveal the heart of inclusive brands. E.L.F. Beauty’s "Show Your(s)e.l.f." campaign showcases real customers from diverse backgrounds, highlighting how inclusion fosters genuine connection. Similarly, brands that have failed to acknowledge diverse experiences or walked back commitments have seen backlash from increasingly conscious consumers.

Conclusion: Culture as a Sales Strategy

The experiences of Target and E.L.F. Beauty offer a clear contrast. Target’s retreat from its DEI commitments was met with public criticism and declining sales, while E.L.F.’s inclusive culture has fueled its growth. These outcomes aren't coincidental—they reflect the values of modern consumers and the financial upside of an inclusive culture.

Call to Action

For business leaders, the message is clear: Focused efforts on workplace culture and intentional DEI are not optional add-ons. They are business imperatives. Start by embedding inclusion into your culture, aligning it with strategy, and measuring what matters. Your customers, employees, and shareholders will take notice.

Organizations serious about sustainable growth must commit to real, measurable inclusion. Because in today’s market, inclusive culture isn’t just good ethics—it’s smart business.

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OurOffice helps busy HR and people leaders improve hiring, engagement, and retention by building a more inclusive workplace with an easy and affordable toolset, leading to better business outcomes. Unlike one-size-fits-all solutions, the OurOffice DEI platform is fully customizable to mix and match the right tools and ensure that you have the right solution to drive measurable impact. 

Ready to take your DEI initiatives to the next level? Contact OurOffice today to learn how we can support your journey toward a more diverse, equitable, and inclusive workplace, or schedule a free session to discuss the challenges you are facing and get answers and guidance from professionals.