The Economic Power of Hispanic Consumers
The reality of retail sales is that the holiday season can either make or break the bottom line of a business. As such, savvy entrepreneurs are looking at key factors designed to make the most of this important sales opportunity. While the tendency in recent years has been to address this reality by starting holiday sales earlier and earlier, retailers can only push that envelop so far.
After all, unless we want to begin holiday promotions in mid-August, there is really only so much holiday promotions one can do without running the risk of appearing unseemly. A better approach is to closely look at the important demographic groups and to determine a marketing strategy aimed specifically at attracting their attention. Towards that end, this year, retailers that are hoping to improve on last year’s sales numbers are targeting the fastest growing demographic group in the country: Hispanic consumers.
The Growing Demographics of the Hispanic Community
Hispanics are with out a doubt the fastest growing demographic group in the country, and demographers anticipate that by 2050, this group will be the largest single ethnic group in the United States. Long before they reach that exalted status however, the size of their population lends them an outside role in the minds and hearts of retailers attempting to get their business. According to a recent report of the National Panel Study (NDP), which is the retail industry’s gold standard of tracking and retail measurement metrics, Hispanic consumers plan to spend upwards of 12% more this holiday season than the $330 billion that they spent in 2014. This demographic is believed to have held one trillion dollars worth of buying power in the year 2010. This was believed to increase by fifty percent in the following five years, which it did. Hispanics now contribute over 1.5 million dollars in buying power yearly.
Bigger Families and More Holidays
One of the driving data points of Hispanic holiday spending is the size of their families and the number of holidays each year. Hispanics tend to have larger families and come from larger households. This information translates into more valuable sales numbers when they shop for the holidays. Additionally, as a cultural group, Hispanic consumers enjoy three extra days of celebration that inspires more trips to the store to find gifts for Las Posadas, Noche Buena, and Three Kings Day. Understanding this information and marketing for these specific three holidays will be beneficial in reaching a Hispanic consumer group. As a result of these additional holiday events, and other buying habits, Hispanic consumers have boosted their sales numbers have grown better than twice the rate of non-Hispanics.
Shopping Habits: Wired Up and Looking for Good Deals
Another factor in Hispanic consumer buying decisions is the manner in which they shop. For instance, in numbers that exceeds their non-Hispanic counterparts, the Hispanic community views shopping as a form of entertainment, so they make multiple trips to the store and do so in very large groups. This heightened shopping frequency, coupled to larger shopping parties, results in more valuable buying conversions for the retail outlet. In an attempt to engage and evolve the spending of Hispanic consumers many business are trying to understand the Hispanics both as a culture but also understand the varying sub cultures. As the group is exceedingly large and continuously growing marketing teams are researching both the commonalities and differences amongst Hispanics. This tactic allows companies to come up with campaigns that will reach and be relevant to the largest portion of this demographic possible. Some things companies take into consideration when researching their new targeted Hispanic audience is whether or not they were born in the United States, their age, family size, education, and income.
The aforementioned NDP study also notes that, on average, Hispanics spend more per shopping visit than their non-Hispanic counterparts by a factor of $10 per sale on average. In addition to dominating brick-and-mortar operations, Hispanic consumers are also extremely well represented in online sales. With $56 billion in online sales, Hispanic consumers composed 17% of the entire Internet sales in 2014, with a preference for purchasing beauty products, shoes, and consumer electronics over the internet rather than an in store location.