‘Black Exodus’

The Great Migration of the Black Community

Part 1. The ‘New Great Migration’ to the Sun Belt

Large cities such as New York, Chicago, and Los Angeles have traditionally been home to a diverse mixture of cultures and races, with the African-American community playing an important role, but in recent years, inflation, shifting industries, housing costs, and racial discrimination have pushed many African-Americans from the North and West to the Sun belt with more favorable conditions.

The history of the Great Migration of African Americans spanned more than a century with two major inflection points. In the First Great Migration, which took place from 1910 to 1970, many blacks headed north and west to escape poor economic conditions and racial discrimination in the South. The New Great Migration, which began in the 1970s, reversed the tide. Blacks began moving back to the South in search of better living conditions. This phenomenon has accelerated since 2010, especially due to the South’s lower cost of living and warmer climate. After the pandemic, this movement has continued with many Black families driven by economic motivations and a desire to improve their quality of life.

Factors driving African Americans out of their longtime home

1. High cost of living and housing

The inflation left by the pandemic has weighed heavily on American families, especially in large cities like New York, Chicago, and Los Angeles with large Black populations, where the cost of living and housing have risen sharply. These economic pressures have been particularly harsh on black families, who spend a higher percentage of their income on basic necessities, and housing costs have become a major burden in their lives.

Even after the Fair Housing Act of 1968, the black community continued to face unfair leasing terms and high interest rates, and many homes purchased by black families faced the risk of foreclosure. As a result, black homeownership rates declined, and rising rents made it difficult for many black families to remain in their homes.

2. Shifting industries and tax burdens

As industries shifted, many formerly thriving industrial centers went into decline. The loss of jobs in manufacturing and the railroad industry hit African-American communities particularly hard in the Midwest. Gary, Indiana, for example, once boasted the largest steel plant in the United States and was home to many black migrants from the South, but their numbers dwindled as the industry declined.

In addition, many black workers who had previously migrated to the North and West are now retiring and seeking better living conditions in warmer climates and lower taxes. The states they are moving to typically have zero or low state income taxes (3.8% vs. 8.0%).

People are moving to favorable tax treatments, so are businesses. The pandemic has reshaped the workplace in big cities, prompting many companies to rush to the Sun Belt in search of cost savings and tax breaks. Investment and development in the region is picking up, not only creating new jobs but also revitalizing local businesses like retail and restaurant establishments.

3. Home of the heart: Family and community support

With historical roots in the South, many African Americans long to return to a place where the culture and heritage of their ancestors is alive and vibrant, especially due to their deep ties to family and community. This longing has only grown stronger over the years and is now a major driver of migration, as people seek their cultural and spiritual roots.

4. Environmental discrimination

Neighborhoods with thriving black communities have enjoyed industrial prosperity in the past, but now face threats such as environmental pollution. “Asthma Alley”* in the Bronx, New York, oil and gas production facilities in California, and contaminated water systems in Flint, Michigan, show that these environmental problems are particularly common in Black neighborhoods. These problems are often rooted in past government policies, reckless decisions by governing bodies, and corporate land use, and these factors have created structural inequities that trap Black communities in polluted environments. This environmental discrimination negatively impacts the health and quality of life of Black people, leading to their decision to move to other neighborhoods with better conditions.

*The South Bronx, one of the poorest neighborhoods in the United States, has been dubbed “Asthma Alley” due to its high levels of air pollution and respiratory illnesses. Bronx residents are five times more likely to be hospitalized for asthma than the national average.

5. Difficulty accessing healthcare and increased crime rates

From 2014 to 2019, heavily gentrified metropolitan areas experienced a 62% increase in the rate of gun injuries compared to the rest of the country, posing a significant threat to the Black community. In Chicago, two-thirds of the shooting victims were in historically Black neighborhoods with sharply declining populations. This outbreak of violence caused the frustrations of the black community, suffering from years of discrimination, coupled with a deteriorating labor market.

Part 2. The New “Black Meccas”

Businesses are constantly changing, driven by demographic shifts and new trends. Beauty supply industry, with its deep ties to the black community, is no exception. Throughout history, the migration routes chosen by the black community have been seen as lands of opportunity, and the cities they’ve settled have witnessed changes in key aspects of life, including housing, jobs, education, and political representation.

The migration of the Black community doesn’t just represent a shift in population; it also changes the age, gender, marital status, education level, and other factors of the customers who walk into the stores. Understanding and adapting retail strategies to changing demographics is both a challenge and an opportunity.

Areas where black populations are growing

Georgia Atlanta: Heart of Dynamic Black Culture, City of Opportunity for Black Success

Atlanta is known for having the highest percentage of black-owned businesses in the country and a rich black culture. It has a strong influence on popular culture, including music, movies, and television, which has helped to keep Atlanta’s reputation as a “black mecca”. Atlanta, in particular, is the number one city for young black migrants. Georgia is also known as a key location for the electric vehicle industry, and with a median age of 36, a vibrant labor market is anticipated.

Texas Dallas, Austin, and Houston: Youthful, forward-thinking cities with no state income tax

These cities embrace racial diversity and are especially popular with young people. The lack of a state income tax makes them attractive, offering great opportunities for entrepreneurs and professionals alike. Since 2015, it has been the preferred destination for African-Americans from California and is expected to remain so through 2023.

North Carolina Raleigh and Charlotte: Low cost of living and burgeoning Black community

Raleigh was one of the cities where black homeownership rates rose during the pandemic, and Charlotte is considered a fast-growing black community with a 33% black population. With jobs in a variety of sectors, including manufacturing and financial services, Charlotte residents expect the city to surpass Atlanta as the new “black mecca” of the United States.

Florida Orlando, Tampa, and Jacksonville: Relocation hotspots for warm sunshine and tax incentives

No state income tax and warm weather make Florida an attractive destination for many people considering relocation. The affordability and recreational lifestyle has attracted many people. Population inflows have increased since the pandemic and the state ranks eighth in job growth in 2023. Most black migrants are from New York.

Western Nevada and Arizona: New options for California’s Black community

While recent black migration concentrated in the South, these Western regions are welcoming black migrants in the West. The growth is driven primarily by migrants from California, and Arizona is expected to see economic growth and local job creation due to large investments by semiconductor giants like Intel and TSMC.

Demographic shifts have transformed retailers’ strategies

In the aforementioned Sun Belt region, not only has the black population increased, but so has the overall population. The lack of commercial real estate inventory has led to the opening of smaller stores and leasing strategies that capitalize on the popularity of discount stores. There is also strategic movement among discount stores and big-box retailers. Discount stores like Dollar General and Five Below have plans to expand in the Sun Belt this year while traditional big-box retailers like IKEA and Macy’s are adapting to the changing market by opening smaller concept stores.

While the population has changed during the pandemic, so has the income disparity in the same neighborhoods. Large retailers such as Walmart have been quick to catch on to this shift, launching low-cost online shopping and pickup programs for low-income and dual-income families, and at the same time acquiring premium brands and collaborating with luxury brands for higher-income customers.

Meanwhile, higher home prices and interest rates have led to an increase in multi-generational living in the U.S., with nearly 40% of Millennials living with their parents or other family members. Baby boomers have more money than today’s Millennials, and the “Grandparent Economy,” in which grandparents living with them purchase household goods, is a new spending pattern that is driving “senior marketing” strategies. In particular, black households have a higher percentage of grandparents and grandchildren living together than any other ethnic group.

A guide for beauty supplies on how to adapt to the changing demographics

Black Population Growth Areas

1. Be price competitive

With the ever-increasing number of discount stores like dollar stores, it’s essential to stay competitive on price. You need to differentiate yourself in the market by selling complementary products that discount stores don’t have or by offering competitive pricing.

2. Engage with your local community

Participate in local community events and engage in active communication through social media to understand the needs of new customers and build a loyal customer base.

3. Opportunities to open new stores

Competition for commercial real estate is fierce, but strong demand makes it a favorable time for beauty supply stores to enter new areas or expand existing locations.

4. Identify new customer demographics and create a marketing strategy

Create a distinctive shopping experience for new customers from diverse backgrounds by offering a product line that incorporates diversity.

Black Population Decline Areas

1. Focus on customer service

In areas with negative population growth, you should focus on serving existing customers rather than expanding your store.

2. Niche markets

Despite the declining population, there is always a demand for niche and high-end products. By offering products that are unique to your store or specialized services, you can increase sales in specific customer segments.

3. Increase your personalized marketing strategy

If you have a limited customer base, you can increase customer loyalty by emphasizing the personalized service that is the core strength of beauty supplies.

4. Increase transaction amount per customer

Shrinking populations mean that you need to sell more products per customer. Aim to sell more products per customer, and increase sales by recommending additional products alongside the ones they look for.

It’s unclear how long these demographic trends will continue. Areas with growing black populations may suffer from inadequate infrastructure or rapid urbanization, and metropolitan areas that are currently experiencing population decline may start the migration cycle again in a new way. Change always brings both challenges and opportunities, and if you capitalize on them and apply them to your business, you’ll have a successful store.