ROSEMONT, Ill. – You’re after the millennial consumer, right? Convenience-store operators have been advised about their potential purchasing power for some time now; we know what they like, how they shop. What you might not have known, however, is that there is a subsection of this all-important demographic group that is growing in numbers as well as buying power, to the tune of $3.4 trillion.
Multicultural consumers make up 45%% of the millennial population in the United States--and 21% of those are Hispanics.
"The conversation really has to be about multiculturals," said Juan Carlos Dávila, senior vice president of multicultural growth and strategy with Nielsen during his presentation at the NACS State of the Industry (SOI) Summit in Chicago. "There can’t be a conversation about millennials without a conversation about multiculturals."
But it’s not just millennials we’re after this time; we’re after the multicultural market as a whole, and perhaps more specifically Hispanic consumers. Today, about one-third of the United States is considered multicultural, and 56 million of those are Hispanic. And those numbers are growing.
"Latinos are not only important because of the big numbers of people," Dávila said. "They’re also changing trends, and this is important for marketers."
Multicultural consumers have larger household sizes, more mouths to feed--and for longer: "Multicultural consumers have a higher lifetime value, which means if you combine the life expectancy and younger median age, it gives you 57 effective years of purchasing power compared with the 37 years of non-Hispanic white consumers."
Given the overwhelming demographic data supporting the rise of the multicultural consumer, it would be prudent to recognize that this group also shops differently. In health and beauty, non-white Hispanic consumers shop diet aids, pain remedies and other medications and remedies most often, according to Nielsen. Multicultural consumers prefer fragrances, family planning, men’s toiletries and feminine hygiene products.
Healthy categories are growing faster than indulgent, but not as definitively in the Hispanic and Asian-American markets. While indulgent categories have shrunk since 2013 among white non-Hispanic and African-American consumers, it grew 3.6% among Hispanic consumers, and 8.6% among Asian-Americans.
The opportunity is there to attract Hispanic consumers with the right product assortment. But Dávila warned any change in product mix should require careful planning.
"Multicultural consumers are realizing the power they have. They can make a brand. They can destroy a brand. And they’re realizing that," Dávila said. "They are empowered and culturally driven."
"Marketing product development communication has to be done in a different way. It has to be done with a multicultural mentality, not ‘let’s start with the general market.’ The other thing that is important, and I do stress this a lot--do the homework that you would do in any other area. Ask yourself, how big is the opportunity?"
Perhaps more importantly, Dávila advised retailers to consider the cash left on the table by maintaining business as usual. He encouraged retailers to think not only about product mix, but consider larger changes across the board.
"It’s not only about marketing. It’s about how the company thinks," he said. "Does your organization look like your consumer?"
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