A total market approach is no longer viable today in the United States. This country has a plethora of cultures and subcultures, all with very distinct beliefs and consumption habits. To this day, some large companies don’t dedicate healthy parts of their marketing budgets to target these segments. One of the most powerful markets of 2020 is the Hispanic Market, which accounts for over half of the population growth in the United States. This means that their purchasing power will increase dramatically, so it’s important to look at their consumer behavior.
Here are key data to keep in mind to understand the purchasing power of Hispanics:
- In 2018, Hispanics made up about 18.3% of the United States population, making them the largest non-white ethnic group. Between 2000 and 2017, the American Hispanic population grew about 74%… still think they’re a minority?
- Hispanics were reported to have lesser median household incomes ($51.5K) compared to the U.S. average ($63.2K). However, this is expected to change because Hispanics are more likely to be hired, with a 67% rate compared to the national 63% rate. 60% of U.S Hispanics earn $60K and above, and 20% already make $100K and over!
- Only 16% of U.S. Hispanics have a bachelor’s degree compared to the national average of 32%, but Hispanics are more likely to have trade and vocational training, which is high in demand in the current economy.
- There are over 17 million Hispanic households in the U.S. Homeownership increased by 47% since 2008.
- 1 in 4 people under the age of 18 in the U.S. is Hispanic. That means that Hispanic Gen Zers are a key segment that can’t be ignored.
- The average U.S. Hispanic is about 28 years old, compared to the average American age of 38. Hispanics are younger and more technologically savvier.
- Hispanics over-index on video applications and social networking via smartphone compared to the overall population, ranking in at 48% of their digital consumption being over the phone. So, it’s no surprise that 75% of Hispanics use YouTube to learn about new products.
What does all of this data mean for marketers? It’s an opportunity to zone in one of the groups with the largest spending power. Currently, many companies adapt their total market approach for Hispanics, literally just translating those assets. This doesn’t consider their trends or lifestyles. For Hispanics, these generalized approaches just feel like an out of touch message that happens to be in Spanish.
A great example of effective advertising targeted to Hispanics is that of Alma Advertising. In 2018, they launched a TV spot called Tio Roberto. The spot shows a teenager meeting his mom’s uncle for the first time. They have a huge language barrier – the teen doesn’t speak Spanish and his mom’s uncle only speaks Spanish. There are a few scenes where they miscommunicate and can’t really understand each other until they reach McDonald’s. They’re able to come together over the classic fast-food chain ingrained in so many’s people’s childhoods. they even eat the same way – dipping one of the World Famous Fries into their soft-serve treat. They laugh and develop a unique closeness.
While the TV spot may feel dramatized to some, it reveals a huge truth in American Hispanic culture: not all Hispanics pass off Spanish to their kids. About 30% of U.S. Hispanics primarily / prefer to speak Spanish. Another 30% are bilingual and the remaining 40% are English dominant. That’s very important to consider because marketers need to decide which Hispanics they are talking to and what’s their language preference.
It’s up to marketers to invest in more Hispanic-centric research to connect with these consumers. If a total market approach must be utilized, show legitimate Hispanic representation. According to the Culture Marketing Council, Hispanics seek to have their own voice; don’t speak for them.
Stay tuned for next week’s post: I’ll be diving into Hispanic consumption patterns and overall consumer behavior for key industries.