Multicultural shoppers ‘key to the future’

Once considered a niche opportunity, the multicultural marketplace has become a mainstream imperative due to unprecedented growth in population, buying power and culture sustainability, according to a recent Nielsen report. These dynamic consumers are not only transforming the U.S. mainstream consumer, but also are reshaping how marketers and advertisers must use culture to connect and build loyalty.

“Multicultural shoppers may be the key to the future, not just because of their numbers, youth and economic clout, but because their unprecedented influence on the attitudes and consumption habits of non-multicultural consumers is upending the outdated assumptions and enlarging and expanding the multicultural market opportunity,” said Nielsen’s Monica Gil, SVP and GM multicultural growth and strategy, and Saul Rosenberg, chief content officer, in the report.

Already more than 120 million strong and increasing by 2.3 million each year — or 6,310 every day — multicultural populations are no doubt the growth engine of the future of the Unites States. Fueled by both immigration and birth rates, Hispanics, African-Americans, Asian-Americas and other multicultural people already account for 38% of the U.S. population, according to the Nielsen report titled, “The Multicultural Edge: Rising Super Consumers.”

What’s even more important for marketers is the multicultural buying power, which increased from $661 billion in 1990 to $3.4 trillion in 2014. That’s a 415% increase.

Not only do multicultural people possess significant buying power, but they also lead the way in effective years of buying power, exceeding that of non-Hispanic whites, according to Nielsen. In other words, multicultural populations are the fountain of youth for the United States, and will continue to be so for many decades to come. For marketers, it is essential to consider not only the short-term ROI of that spend, but also the long-term compound effect of a loyal, younger multicultural population with a much longer life span on the total long-term ROI of that spend.



Digitally connected ‘super consumers’

Super consumers, as defined by Nielsen, are a subset of consumers who drive the most value and are the most involved in a given category. They are the top 10% of households who drive at least 30% of sales, 40% of growth and 50% of profits.

Multicultural consumers are disproportionate super consumers in 15 major studied categories — including family planning, dried vegetables and grains, and hot sauce. Nielsen predicted that many more categories are likely to follow. The key to total market growth, according to Nielsen, is understanding how purchase behaviors are driven by multicultural consumer values, lifestyles, tastes and preferences.

Nielsen also suggested that marketers identify cross categories that appeal to multicultural super consumers, as doing so can be a shortcut to reaching them where they are most passionate and enables marketers to develop cross-category promotions and strategies. For example, Nielsen found that multicultural consumers who were super consumers of both the dried vegetable and grain category and the baby needs category over-indexed by greater than 20% on 13 additional categories, including men’s toiletries, refrigerated meal starters and shelf-stable meal starters.

These super consumers also are super consumers of technology and social media. This comes as little surprise when considering how technology can provide a bridge across both cultural and national borders.

According to Nielsen, multicultural consumers today are leaders in technology adoption, and these heavy consumers over-indexed against non-multiculturals on smartphone usage (82% versus 70%), mobile app duration (index of 130) and number of apps used (index of 142).

More specifically, heavy multicultural consumers are 32% more likely to be in the top segment of mobile users, averaging 73 website visits per month, and are 42% more likely to use an average of 46 apps per month. In all areas of mobile behavior, the percentage of multicultural consumers over-indexed non-Hispanic whites by 32% on number of sites visited and 42% on total number of apps used, according to Nielsen.

Individual social media apps also were tracked for the report, and these heavy multicultural consumers over-indexed non-multiculturals on such social applications as Facebook, Twitter and Instagram.

Clearly, multiculturals represent a significant opportunity for marketers and, as Nielsen stated, “companies that lead with multicultural insights to devise authentic sustained marketing strategies will reap the most profitable returns on their investment.”