AHAA’s Position on…
Emerging Trends in Hispanic Market
FIVE TRENDS EMERGING ANONG U.S. HISPANICS: THE NEW GENERAL MARKET
Hispanic Consumers Are Reshaping the U.S. (2008)
From food to pop culture, politics to sports, Latinos are making their mark on American society. Although the influence of Latinos on this country is far from new, AHAA has identified five emerging trends among U.S. Hispanics today, which AHAA Chair Jackie Bird shared with corporate marketing executives and presented at the AHAA Conference in San Antonio.
“Hispanics are the new general market,” Bird says. “They truly enjoy the best of both worlds infusing all aspects of American society with Latin style. And there are five important trends occurring among Latino consumers that should be forcing innovation in the way corporate marketers and advertisers reach out and connect with the nearly $930 billion in purchasing power this population wields.” The five trends according to Bird are:
- The steady increase in the number of affluent Hispanics in the U.S.
- The rapid growth of the Hispanic teen segment and their unique lifestyle
- The changing demographic composition in cities across America
- Hispanic consumption of traditional and new media equals or exceeds general consumer use
- The investment of Latino voters in the American political process
“Unlike other immigrants, Latinos haven’t just blended into American culture. Hispanic cultural values, traditions and language are being retained but not to the exclusion of being ‘American,’ rather as a complement to traditional American values.” This bi-cultural blending can be confusing to corporate marketers as simple translations and inserting Hispanic faces into ads is no longer acceptable.
Advertisers are finding that navigating the opportunities and challenges related to this fast-growing and increasingly savvy consumer group is a fundamental plan for growth. But Bird says it’s more than just the sheer numbers that is attractive to marketers. Hispanics total more than 44 million of the U.S. population, approximately 15 percent; however, it’s the influence of this diverse market and the dynamics being created by culturally multi-dimensional Latino consumers that Bird says is critical to consider when creating marketing strategies. Nuanced messaging and content that is uniquely relevant and contextual to cultural factors is essential to effective communication, she notes.
For example, high net worth Hispanics form one of the most lucrative niches in the Hispanic market segment – the first trend Bird attributes to the reshaping of the country and of marketing efforts. Affluent Latinos represent about nine percent of the Hispanic population and most are small business owners - often Latinas – numbering about 2 million in total. From financial firms to luxury merchandisers, advertisers are tapping into the community of wealthy Latinos with great success recognizing the cultural proclivities these prominent consumers hold dear. “Cultural motivations, preferences and cues drive behavior and purchasing decisions,” Bird explains, “and this segment is no exception.”
The second trend that is changing the U.S. consumer landscape is the growing number of Hispanic teens. By 2020, the number of Hispanic teens is expected to increase by 62 percent as compared to 10 percent growth in the number of teens overall. Hispanic youth are celebrating their heritage while creating an identity all their own that separates them from the mainstream, according to Bird.
“Advertisers can’t underestimate the influence Hispanic teens have in their homes and in the marketplace,” she says. “They are outspending their general market counterparts and often are the decision-makers in their households even negotiating mortgages and car loans. They are socially connected and confident with technology. Latin youth are a social force to be watched and courted.”
Many of these Latin teens are native-born leading to the third trend that is changing the complexion of the U.S. consumer: the geographic dispersion of Hispanics throughout America. “No longer are Hispanics grouped in southwestern cities or large metropolitan areas on the East or West coasts,” Bird says. “Attracted by job opportunities and lower cost of living, Latinos are populating rural America and small towns across the U.S. rapidly. While immigration is driving some of the increase, most of the growth is coming naturally. One in four babies born in the U.S. is Hispanic.” The widespread diversity is definitely influencing what was once “mainstream,” she adds.
And as communities of Latinos emerge, Hispanic media proliferates as well. “We are unique in our desire and ability to retain our language and traditions as crucial elements of our self-identity and pride,” Bird says. “Technology and proximity to our countries of origin have simplified communication with our roots but it’s the multi-billion dollar Hispanic media industry that promotes our culture and language daily that has been the most important factor. We have the richest, most robust media infrastructure of any target market segment in the country.”
Latinos are the fastest growing segment of the online population making new media another vehicle to reach Hispanic consumers, grow market share and increase brand recognition. And, Hispanics are early adopters and leaders in the use of digital technology – inherent to their cultural need to communicate and socialize with each other Bird notes.
Finally, as the country embarks on an unprecedented election year, Bird believes it will be Latino voters that will decide the next president of the United States. “Latinos have turned out in record numbers to cast their votes and make their collective voice known in this critical election year,” Bird says. “Democratic government is high on the priority list of Latinos as they seek the American dream.” Hispanic voters will likely make up 11 percent of the electorate in November’s presidential election with the potential to be the “swing vote” in the race. Active support from Spanish-language media encouraging Latinos to seek citizenship and register to vote is paying off, Bird says.
Embracing the cultural shift in the marketplace may take time but for corporate America, the clock is ticking, Bird explains. “These trends will continue to affect the future of our nation and the bottom line for advertisers,” she says. “Hispanics have been responsible for launching entire industries in this country and marketers must keep pace with the consumer evolution or risk being left behind in today’s competitive marketplace.”