Rising Ethnic Markets in the US. How can Retailers profit?
The US population is experiencing increasing ethnic birth rates. From 2010 to 2020, Hispanic and Asian populations will make up 68% of the total US population growth, with the Hispanic population growth accounting for 53% of that.
In order to adjust to the growing diverse population, ethnic retailers have created their own breakout segment of the industry which is outpacing regular retail. These retailers range in all types of ethnic specialties, targeting key ethnic shoppers. Their success depends on a number of circumstances such as targeting the right cultural calendar, selling home brands and maintaining the right local assortment. These retailers win on authenticity. Ethnic retailers rely on a heavily targeted audience which greatly impacts the merchandise categories they carry as well as impacts other retailers in the market who are looking to compete for the same shoppers. Supermarkets can, and are, learning from these specialized stores.
As seen in the chart above, Hispanics are the fastest growing ethnic population in the US, according to RetailNet Group. This modern Hispanic consumer's shopping habits have predominantly veered away from stereotypical Hispanic shopping patterns that many US companies continue to market to. One of GMDC's strategic partners, Nielsen, says:
"...today, one-third of the US Hispanic population makes $50-$100K, contributing to 37% of the total US Hispanic spending power!"
This segment of the US Hispanic population is referred to as upscale Hispanic and it is growing faster than any other. By the year 2050, it’s predicted that there will be 35 million upscale Hispanics. Compared to non-Hispanics, upscale Hispanics show a high interest in purchasing technological products, designer shoes and shopping at children’s stores. When it comes to high-end cosmetics, upscale Hispanics are 137% more likely to purchase them than upscale non-Hispanics. To make these purchases, upscale Hispanics tend to be very prominent digital shoppers. In the past 12 months, this group has spent $3.7 billion in online purchases. Their top purchases made online from greatest to least are clothing/accessories, airline tickets, hotels/car rentals, health & beauty, and home accessories. These are just a few of the emerging trends seen within the US Hispanic population. Because of how fast this group is growing, it’s essential for retailers to begin equipping their businesses in order to best meet the needs of this emerging Hispanic consumer.
As ethnic markets are continuing to expand into urban areas, and grow in product consumption, what is your company doing to market to these heavily influential cultural demographics?
To learn more about the fastest growing ethnic consumer, and how Hispanic cultural shifts can be adopted and transform your company strategies into profit, visit GMDC’s online Content Library:
GMDC is the only trade association dedicated to building suppliers’ businesses in the GM and HBW industries based on retailer priorities throughout the US and Canada.
If you have interest or questions about how to meet with retailers and suppliers that have expertise and resources in Canada for you to go to market, please contact Patrick Spear, GMDC President, at [email protected]
Or, send me your thoughts, comments or experience based on this article. We’d like to hear from you. Mark Mechelse, GMDC Director Industry Insights & Communications, at [email protected]