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Hispanic Purchasing Power Maintains Despite Rocky Economy
Posted: April 19, 2012
A report from the blog of Kline & Co. finds that Hispanic purchasing power remains resilient despite economic challenges.
The Hispanic market in America is a dynamic, complex market segment composed of multiple groups of distinct cultures. Hispanic, or Latino, is the largest minority group in the country, comprising 16.3% of the total population and growing at a very fast rate. With the ever-increasing population of Hispanics in the United States, there has been a tremendous increase in their spending power as well. Thanks to their culture of high grooming standards, the young Hispanic population uses personal care products frequently and likes to experiment with new products.
The Hispanic community’s expenditure on personal care products and services is slightly higher than the national average. Hispanics are far more brand conscious compared to people of other ethnicities. While trading down from favorite brands to better-priced private label brands is not unusual for the general U.S. consumer, the incidence of such is much lower among Hispanic consumers. Despite the recent recession, the majority of Hispanics continue to buy personal care products of the same brands that they used to.
Many Hispanics purchase personal care products online—with 32% of them purchasing perfume in this manner. Other popular categories for online purchases include face and eye makeup. Kline’s consumer research for Hispanics also found that a majority have used tooth whitening products, with almost 60% of these consumers selecting the Crest brand.
Hispanic consumers tend to be inspired by Latino or Hispanic role models, and role models are growing in influence and number. Some examples include Jennifer Lopez, Javier Bardem, Christina Aguilera, Eva Longoria and Salma Hayek, who in their respective ways have put the Hispanic perspective of beauty in the mainstream, influencing not only the Hispanic population, but others as well.
With the established influence of Hispanics in both the West and South, as well as their growing influence in the East, retailers in these regions are increasingly accommodating and focusing upon the Hispanic marketplace.
Market leaders, such as Walmart, are increasing shelf space for products targeted at the Hispanic market, as well as opening stores specifically aimed at Hispanic customers in areas dominated by Hispanics. Retailers are typically creating more shelf space; tailoring in-store advertising and marketing offers to specifically capture the Hispanic consumer’s interest.
While purchasing power for many Hispanic families has suffered significantly in recent years, often more than many other segments of the population, the purchasing power of Hispanics as a whole remains resilient and uncompromised.