The Hispanic Truths That Shall Set You Free
April 26, 2022 – There are endless articles, reports and blogs dealing with the power, the importance, and the resiliency of the Hispanic consumer – not to mention everything that has been written about the numerous myths, and sometimes outright ethnic fallacies, surrounding Hispanic consumers.
But why does the Hispanic Consumer Market (HCM) deserve so much focus and analysis? Let’s start with some basic truths about Hispanic consumers, which will illustrate their growing importance:
Hispanic Consumer Market Data
We are driving the US population growth: Hispanics will account for the majority of U.S. population growth (68%) through the year 2060. (Nielsen, 2021)
Hispanics are increasingly more affluent, despite the ravages of Covid. In fact, between 2015 and 2020, the affluent Latino segment (household income of $125,000+) grew by 81%, compared to just 53% for the non-Hispanic population. (Ipsos Affluent Study 2015-2020, 2021)
Latinos, like most immigrant communities, are acquisitive, as shown by the growth in buying power. Through the last decade, Hispanic buying power grew at a faster pace than that of non-Hispanics: Latino buying power outpaced non-Hispanics by 36 points (87% vs 51%). (eMarketer, May 2021)
In the critical area of supermarket shopping, Spanish-Preferring Hispanics are the best customers: average basket dollars per household comes in at $11,214 compared to $9,631 for non-Hispanics. (Nielsen Homescan, 5/24/20-5/22/21)
And let’s not forget home ownership. Hispanics will be the only ethnic group to increase their percentage of home ownership through 2040, when 70% of new home buyers will be Latinos. (Urban Institute, February 2021)
Finally, not all Hispanics live in California, Texas, or Florida. For example, in North Dakota, the number of Hispanics grew an astonishing 148% between 2010 to 2020. Next door, South Dakota experienced a 75% growth in its Latino population. The reason is jobs… these states have the top oil-producing areas in the country. (Pew Research Center, September 2021)
Hispanic Consumers are Driving Growth
So, what does this all mean? Quite simply, marketers who are not actively addressing the HCM need to reassess their preconceived notions about the value of Latino consumers.
While it’s true that the HCM buying power still lags behind our total market size, our pace of growth is not only economically impactful but beats non-Hispanic growth – a clear indicator of the healthy financial well-being of the HCM.
Whether you market basic staples such as toilet paper, groceries or school supplies, or luxury items such as luxury cars or the latest tech, your future success undeniably must include a consistent, fluent, and comprehensive Hispanic marketing component. Obviously, the strategic approach will be dictated by the product or service to be marketed, because, as we well know, not all Hispanics are alike, and they are defined by many diverse groups – just like the general market.
Invest in the Hispanic Consumer or Perish
As the HCM continues to become more affluent and a bigger driver of overall market growth, the per capita marketing spending gap between the general market Hispanic consumers will only result in diminishing returns. The general market represents a mature consumer while Hispanics are an assertive, youthful, and increasingly critical economic segment.
Marketers who fail to reassess their marketing practices and do not allocate the proper resources to grow their Hispanic customer base – the segment that will drive consumer spending for the foreseeable future – may be facing an existential danger. Like it or not, this is the truth that will set you free.
Patricia Testa – Managing Partner – D2H Partners, LLC – 2022
About d2H Partners – Los Angeles based full-service Hispanic Advertising Agency focused on D2C and B2B Spanish language campaigns targeting immigrant, first-generation and “billenial” Hispanics. d2H specializes in creating, adapting, and delivering targeted messages to Latinos to profitably enculturate your message, media and metrics.