More Retailers Are Courting Gay Customers

Public policy often follows the dictates of the markets. But historical discomfort evident in many societies around gay issues has made businesses cautious. There has been concern about the tradeoff between the benefits of a sophisticated, affluent segment and the potential controversy some feared might arise.

Polls in the US and some European countries point to decreasing concerns amongst citizen-consumers. To the point where the word 'issue' may be anachronistic. Businesses are, therefore becoming bolder about pursuing this market more openly and aggressively. Even staid, traditional companies are finding the economics compelling.

From a social and business perspective, ignoring potential customers in a constrained economic environment is self-defeating. Rationality prevails. JL

Karen Talley reports in the Wall Street Journal:

Retailers are becoming a lot less closeted.

Many retailers are turning their attention to gays and lesbians, a group that wields substantial buying power but isn't fully integrated into mainstream advertising
Similar to other moves to attract different minority groups, the push comes with risks, as it could threaten the retailers' relationships with some of their longtime shoppers.

Nonetheless, from J.C. Penney Co.'s JCP high-profile hiring of openly gay Ellen DeGeneres as its spokeswoman, to Target Corp. selling same-sex greeting cards, retailers are trying ways to cozy up to a community that by one estimate is as much as 16 million strong and has almost double the disposable income of the average American—some $49,000 per capita compared with the $26,000 average.

The efforts, while nascent, show a growing interest in reaching out to consumer groups beyond the standard Caucasian audience. Indeed, courting the gay market follows on retailers' increased interest in ethnic groups, specifically blacks and Hispanics.

For years retailers have advertised in gay magazines and through other gay media. But now they increasingly are going mainstream, whether through their choice of representatives or whom they put on the front of their catalogs. Many households populated by gays, especially couples, have migrated to suburbia, long the bastion of large retailers.

J.C. Penney has been more aggressive than other large retailers in courting gays. In addition to hiring Ms. DeGeneres, the company featured two women as a couple in its May catalog and two men in its June offering. J.C. Penney also had a float in New York's Gay Pride parade.

J.C. Penney's monthly catalog is mailed to 14 million customers nationwide.

"We are committed to being a store for all Americans. Our marketing reflects the diversity of today's families," J.C. Penney spokeswoman Kate Coultas said.

It is a welcome trend to many. "It's not just putting a float in a gay-pride parade once a year. It's J.C. Penney putting a gay couple in mainstream ads," said Rich Ferraro, spokesman for the Gay & Lesbian Alliance Against Defamation. "This tells me that corporate America is recognizing gays and their families are a significant part of our culture."

Target last month began selling greeting cards for same-sex couples, such as a wedding congratulations card emblazoned with "Mr. & Mr." The retailer is selling the cards nationwide, signaling that it believes that demand extends beyond cosmopolitan centers and into Middle America. A line of gay-pride T-shirts sold out in less than a month, Target said.

The retailer "supports inclusivity and diversity in every aspect of our business and has a long history of supporting the [gay] community," Target spokeswoman Molly Snyder said.

Retailers' efforts, while embryonic, "are great," said Christine Arax, an editor and gay woman who lives in New York City. "They were slow to the game," Ms. Arax said, but she said she believes gays will respond well to the overtures by "buying their products and staying loyal."

Building brand loyalty is seen as a benefit of acknowledging gays and lesbians. "There are countless more people who support the gay community" and they could also become loyal shoppers, said Robert Ross, professor of sociology at Clark University in Massachusetts.

Macy's Inc. uses gay-friendly graphics in some of its windows during Gay Pride Month in June. "We support, and have for many years, pride parades in many cities," Macy's spokesman Jim Sluzewski said.

The move by retailers isn't happening in a vacuum. The government allows gays to serve openly in the military, ending its "don't ask, don't tell" policy. Several cases challenging the constitutionality of the Defense of Marriage Act—which limits federal recognition of marriages to those between one man and one woman—are winding their way to the Supreme Court.

Meanwhile, Americans increasingly are likely to shrug off news that a celebrity is gay, as was happened recently regarding Anderson Cooper of CNN.

With a sensitive subject, it is easy to draw the ire of some conservative shoppers. A group called One Million Moms called for a boycott of Penney when the retailer hired Ms. DeGeneres this year. Penney didn't respond to One Million Moms, Ms. Coultas said.

A representative for One Million Moms didn't respond to a request for comment. It is unclear how many members the group has. The group's Facebook Web page showed under 50,000 "likes."

Plenty of shoppers aren't fazed by retailers advertising to gays. Karen Hewitt, who was shopping at a Target near her Amityville, N.Y., home, said gays have made such strides in recent years that it is time retailers recognized them. "It's not something you have to hide anymore, so why not do it?" said Ms. Hewitt, who said she is straight.

Target was lambasted two years ago by the gay community for making a $150,000 contribution to political-action committee MN Forward. The group supported gay-marriage opponent Tom Emmer, a Republican who was running for governor of Minnesota, Target's home state.

MN Forward "was a pro-business group, which was the reason for the contribution," Target's Ms. Snyder said.

Some retailers are tentative. A Sears store in a Toronto mall that was along the route of this year's gay-pride parade in that city had models holding flags in rainbow colors, the symbol of gay pride.

A spokesman for Sears Canada said the Toronto store was the only one that had such a display. Sears doesn't participate in gay-pride displays in the U.S., according to a spokeswoman.

"I think we will be seeing an increase as corporations see the value, both social and financial, in developing these relationships," said Andy Marra, spokesman for the Gay, Lesbian & Straight Education Network, an organization that works on behalf of young gays and lesbians.

The University of Georgia's Selig Center for Economic Growth calculated the average buying power of the overall U.S. market at $26,000 a person by taking the Census Bureau's total U.S. population and dividing it by the amount of money people have left after taxes.

It is harder to determine the figure for gays because there is no box on the census for gays to check off unless they are part of a committed couple.

Bob Witeck, a consultant who has studied the gay community for 20 years, estimated that there are roughly 16 million gay adults in the U.S. with projected spending power of $790 billion this year, or roughly $49,000 each.