Abstract
Abstract We present a novel business case for Diversity, Equity, and Inclusion (DEI) by showing that DEI representation in advertisements has important, and yet unestablished, implications for brands. We show that depicting observably diverse (e.g., in race, gender, or age) models in advertisements creates a perception that the brand offers greater product variety, even when the advertisement neither showcases nor directly suggests greater variety. This effect arises because people believe that observably different customers have more varied needs. Diversity representations, therefore, increase the perception that the brand offers greater product variety, presumably to meet the varied needs of its observably different customers. The findings are important because perceptions of variety improve brand impression, perceptions of a brand’s creativity, willingness to pay, willingness to use, and choice. The findings are particularly relevant for brands that offer limited variety, face resource constraints to diversify, and/or want to benefit from generating perceptions of large product variety while avoiding the drawbacks of managing large assortments.