Amazon can craft an entire list of books, movies and music based on my purchases and
browsing, and then either deliver them to various devices or accommodate the
increasingly antiquated idea of tangible entertainment consumption through next-day
delivery (soon to be drone-enabled). Starbucks knows when I am within a certain
distance of one of their locations and pings my smartphone with a reminder that
I may be thirsty or interested in their new flavored beverage.
In essence, technology has allowed for
companies and brands to “know” and market to consumers at an unprecedented level
of personalization. Yet while the speed of change has been quick across so many
facets of the marketing world, we continue to lag behind when it comes to understanding
and creating relevant, insights-driven connections with multicultural
consumers. Much has been written about the impending population shifts and how
that translates to buying power, but few are ready with the insight and
strategy to capitalize and fundamentally shift existing mindsets. According to
our research at 84.51° Asians, African-Americans
and Hispanics will contribute nearly 90% of population growth between 2014 and
2019. By 2040, the non-Hispanic Caucasian population will drop below 50%,
becoming the minority. The three largest ethnic groups in the U.S. will each be
over 125 million.
future is now for the multicultural shopper. Without a fundamental shift in how
we think about marketing—from the products on the shelf to the way we
communicate with consumers about these products—brands will likely be left
behind. This fundamental change requires looking well beyond demographics.
addition, there is no typical or average multicultural shopper. The purchase behavior
of these consumers is influenced by so many facets beyond their ethnic or demographic
classification. This can be seen across nearly every category, including what
Hispanic, Asian and African-American consumers are placing in their carts at
their local grocery store. Here are a few insights into these customer groups,
according to our research:
consumers: frequent and fresh. The buying power of Asian consumers is significant
and growing at the fastest rate of any consumer segment within the U.S. Asian
households have different shopping patterns in totality. They have smaller
grocery baskets but visit the store more frequently, and those trips add up.
They are also engaged in fresher, more perishable items, with 20% higher spend in
produce and 50% higher spend in natural foods.
consumers: convenience is key. Previous perceptions of convenient
categories are evolving. Frozen food relevance has met a steep decline with
African-American millennials. For example, within the frozen, single-serve
premium meal space, engagement with African-American millennials has declined nearly
three times as much compared to the rest of the population.
consumers: personalized strategy. Having a single Hispanic strategy just
won’t work. Whether looking at generational status or acculturation level, the
needs and corresponding shopping patterns are fundamentally different. For
example, more acculturated Hispanic shoppers are engaged in center-store
offerings at nearly a rate of 1.5 times that of less acculturated consumers.
Variety-seeking behavior also varies drastically across the acculturation
all of these nuances, a blanket multicultural strategy is no longer sufficient
in today’s world. Whether that entails using any of the above insights to guide
new product innovation, assortment decisions at shelf, promotional strategies,
or personalized media efforts, marketers today need to change their thinking to
a more personalized strategy versus a one-size-fits-all strategy. Isolating
similarities, differences, emerging needs, and shifts in behavior enable
retailers and brands to tailor strategies, personalize communications and
ensure relevance across their portfolios.
insights exist, but we need to value these insights enough to do things
differently. As the wise marketers at NBC once said, and then subsequently
animated, “Knowing is only half the battle.” Transforming insights into action
that let us create meaningful relationships with multicultural consumers will
be a differentiator for success in the years ahead. The future is now.
This article was originally published in the July 2015 issue of the Marketing Insights e-newsletter.