Multicultural Consumers Invisible?

Most marketers would agree that the demographic shift in this country is real. U.S. Census data tells us that the Hispanic population as well as the African-American segment now represents the largest minority groups. The minority has become the majority. I know. No new news there.  But, as I counsel brand managers across the country on their marketing strategies, many say they understand the demographic shift and what it represents from a business opportunity perspective. However, I’m not convinced that they really do see the business opportunity before them.

Armed with data and the most compelling consumer insights, I routinely direct our clients and prospects to invest more into ethnic marketing or consumer engagements targeting multicultural communities. With reputable market research organizations such MRI, Forrester Research, Pew Research Center and Nielsen all substantiating the shift in multicultural communities, it would appear that investing more in ethnic marketing would be a clear strategic move, right?

Unfortunately, this market still seems invisible, failing to get the investment share and business priority it ought to have. See the recent AdAge article regarding CPG companies reducing their multicultural marketing efforts: http://adage.com/article/cmo-strategy/cpg-cuts-put-pressure-multicultural-units/297920/. Why are marketers staying with mainstream marketing tactics?

Far too frequently, I pose this question to my staff, advisors, friends and family as well as anyone who will listen. Why isn’t this being met with the enthusiasm of a gold rush? Why is multicultural marketing being done half-heartedly through adaptations of mainstream creative and executed through simple ethnic representation in creative rather than being uniquely relevant?

Some have argued that the systems for gathering multicultural sales data are dated and flawed. The lack of reliable multicultural sales data is one of the primary reasons why companies continue to under-invest in the Hispanic market and African-American communities, which should be seen as engines of real and sustainable growth for corporations. I personally believe the problem stems from the fact that U.S. marketers haven’t yet evolved from being Middle-America marketers to Multicultural-America marketers. We are still thinking and behaving as though our country remains demographically unchanged. As a result, the true business opportunity continues to elude many brand managers.

With this in mind, I’m laying out the most compelling stats that get me going. The following captures the broad strokes:

  1. The Hispanic and African-American consumer buying power is nearly $3 trillion combined. They are the super consumer. Check out the latest report from Nielsen (http://www.nielsen.com/us/en/insights/reports/2015/the-multicultural-edge-rising-super-consumers.html).
  2. Every major media market in the United States is either at the tipping point or is already comprised of at least 50% people of color. In 2014, multicultural groups collectively represented greater than 50% of the population under age 9 versus 35% of those 45-50, and only 17% of those 80 or older, as each successive generation is showing a more multicultural skew.
  3. Multicultural consumers are younger than the rest of the population. They are trendsetters and tastemakers across a broad range of categories, from food and beverage to beauty products. Cultural traditions and social aspirations that drive multicultural shopping and product behaviors are also resonating with many mainstream shoppers, which increase return on investment and magnify the business case for reaching multicultural consumers.
  4. Ethnicity and culture DO matter to Millennials. In fact, some studies have shown that they are less racially tolerant than we think. These studies also go on to suggest that those who claim that the rise of the millennials will usher in a new age of racial harmony are misreading statistics.  They’re doing so primarily in two ways: by lumping together all millennials when they report survey findings rather than breaking out white millennials’ views on racial issues, or by focusing narrowly on a small set of questions about explicit racial beliefs that don’t tell the full story. On key questions involving race, it seems that millennials are no more open-minded than their parents. The only real difference, in fact, is that they think they are. I think New York Magazine did a good job of addressing the topic: http://nymag.com/scienceofus/2015/01/millennials-are-less-tolerant-than-you-think.html.
  5. In their prime, multicultural consumers are starting families, making plans and establishing long-term brand relationships. The compound effect of youth and extended life expectancy make multicultural consumers a key to long-term growth for products and brands.
  6. Multicultural consumers are connected and mobile savvy, they use their smartphones and other devices at much higher rates and more intensely than their non-multicultural counterparts. The smart phone serves as the “computer” in many multicultural households.
  7. Hispanics and African-Americans co-exist in two worlds. One world filled with general market influences and pressures to assimilate and the other is culturally driven. Brands that spend the time and effort to develop a relationship will reap the rewards from both worlds.
  8. Inter-ethnic and multi-generational, African-Americans, Hispanics and Asians are leading the cultural change in the United States. As a result, the multicultural selling proposition for marketers and advertisers extends beyond the size of the multicultural population. Just as soul food, sushi, tacos, pizza and other ethnic foods have become as ubiquitous as apple pie and hot dogs, the traditions, attitudes and shopping behaviors of multiculturals are influencing mainstream consumers, expanding the multicultural market opportunity.

Needless to say, the list above is not an exhaustive one. However, it does highlight the business opportunity that exists within multicultural communities across the country. The brands that are doing it right don’t ignore the diversity within diversity, thus gaining a true competitive advantage in the market place.

I’ll continue to counsel brand managers and encourage them to “fish where the fish are.”

That’s just good business.