Multicultural Momentum

Numbers don’t lie: if you’re not thinking about multicultural customers, you’re missing out.

April 20, 2015

By Abbey Lewis

CHICAGO – Like seemingly every other retailer these days, convenience store operators have been well-advised about the purchasing power of Millennials for some time now – including by us, in the April 2014 NACS Magazine cover story, “Meet the Millennials.”  News reports across all channels have covered what Millennials like and what their shopping habits are. But, less discussed, is a subset 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% percent 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 Summit in Chicago last week. “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 Americans are considered multicultural, and 56 million of those are Hispanic, with the number growing each year.

“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.

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?”

The NACS State of the Industry Summit took place last week in Chicago, the convenience and fuel retailing industry’s only event of the year where retailers gain the most comprehensive industry financial and operational metrics and consumer shopping behavior insights.

Advertisement
Advertisement
Advertisement