Insight04: Nielsen’s first Multicultural Super Consumer Report features key EthniFacts paradigms and groundbreaking insights
Multicultural consumers are transforming the U.S. mainstream. Propelled by the twin engines of population growth and expanding buying power, they are at the leading edge of converging social and demographic trends that are reshaping how marketers and advertisers use culture to connect with increasingly diverse consumer markets. With multicultural consumer spending in the United States today at $3.4 trillion, this "super consumer" group is also influencing the tastes and behaviors of non-Hispanic whites that share their attitudes and shopping behaviors.
The Nielsen report, The Multicultural Edge: Rising Super Consumers, identifies multicultural consumers as the most dynamic and fasting growing segment of the U.S. consumer economy and shines a light on their role as Super Consumers, which refers to the top 10% of households who drive at least 30% of sales, 40% of growth and 50% of profits of any consumer product category. The report reveals how by understanding the cultural essence that drives multicultural super consumer behavior today, marketers and advertisers can better understand future market trends.
One of the many eye-opening insights in “The Multicultural Edge” is an analysis of U.S. Census-based data showing that by 2030 all of the nation’s population growth will come from multiculturals. What’s more, the compounded effect of the relative youth and longer life expectancy of Hispanics, Asians and African Americans translates into extended effective years of buying power for African Americans (42.3), Asians (52.3) and Hispanics (56.5), compared to Non-Hispanics whites (36.7). For marketers and advertisers, the additional years of effective buying power represented by multicultural consumers translates into a better long-term return on their marketing and advertising dollars and a chance to align their brand with a fast-expanding pool of empowered tech-savvy shoppers.
A preview of the report was presented earlier this month’s at the South By Southwest Interactive conference in Austin, Texas by EthniFacts’ Guy Garcia, who moderated the SXSW panel “Latino Tech-Culture Powers Up,” featuring Nielsen’s Monica Gil, AT&T’s Christina Gamboa and Maria Hinojosa from NPR’s “Latino USA” and “America By The Numbers” on PBS. Once viewed as laggards in a widening “digital divide,” multiculturals today are leaders in technology adoption and over index against non-Hispanics whites on time spent on the Internet, mobile devices and social media apps.
Nielsen’s “Multicultural Edge” report incorporates a number of key EthniFacts paradigms and market insights, among them:
Ambicultural identity - the ability and willingness to function competently in two cultures, which allows many multicultural consumers to simultaneously maintain their cultural heritage and see themselves as equally American. Multicultural consumers gravitate to brands, products, and activities that reinforce their cultural roots.
CulturEdge - the social spaces where people of any race or ethnicity exchange their and mix their distinct cultures with parity and reciprocity. This social spaces includes physical places or venues with multiethnic proximity, virtual ones as in social media, shared lifestyle orientations, and popular culture affinities that reflect and reenforce the cultural diversity around them. CulturEdge consumers are adopting or have already adopted cultural attitudes and behaviors.
New Mainstream - the emerging U.S. multicultural marketplace, as described in Garcia’s The New Mainstream: How the Multicultural Consumer Is Transforming American Business. As the population shifts, it is no longer a valid business strategy to assume that ethnicity and race will eventually become irrelevant and dissolve into a homogenous “general market.” Instead, marketers should adjust and update their efforts to address a new mainstream marketplace that reflects and acknowledges consumers of all ethnicities and races as a source of new business trends and business growth and develop and activation strategy that reflects that reality.
Multicultural consumers are younger, in their prime and already make up 38% of the U.S. population. Expected to become the numerical majority by 2044, 21 of the top 25 most-populated counties in the United States are already more than 50% multicultural. Knowing the cultural appeal of a brand is critical to marketers, as multicultural populations can vary widely even within metro areas. The combination of majority multicultural geographies and high levels of interethnic proximity magnify the need for ethnic and cross-cultural marketing.
Multicultural consumers comprise a disproportionate share of many categories, such as dairy, baby food and diapers, laundry supplies and detergents, school supplies, and other family goods. Of 126 grocery store categories reviewed, 45 categories (36%) over-index in total rate of spending for all multicultural consumers compared to non-multiculturals. The findings show Asian Americans are more likely to eat organic foods (29%). Cultural identity is very important to African- Americans (78%) and Hispanics (71%), and social causes are particularly meaningful to Hispanics (43%). Multicultural Super Consumers can heavily influence non-multicultural consumers in Super Geo areas—geographies with a higher concentration of Super Consumers. Proximity to other cultures and the sharing of cultural influences, attitudes, and behaviors in Super Geo clusters magnifies the multicultural opportunity.
Multicultural consumers gravitate to brands, products, and activities that reinforce their cultural roots. And these behaviors are affecting the purchase behavior of non-multicultural consumers, too. For example, while multicultural consumers represent 53% of hot sauce Super Consumers, the category has grown beyond it, becoming a mainstream condiment. Just as soul food, sushi, tacos, pizza and other once-ethnic foods have become as ubiquitous as apple pie and hot dogs, the traditions, attitudes and shopping behaviors of multiculturals are expanding the multicultural market opportunity. These multicultural Super Consumer categories have already experienced the future where many categories are likely to follow. Understanding how purchase behaviors are driven by multicultural consumer values, lifestyles, tastes and preferences is the key to total market growth.
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