All Articles Tagged "african-american buying power"
For years Georgia has seen a multitude of black success. Centering in Atlanta, African Americans have succeeded in business from Tyler Perry’s studios to the Black Beauty Institute that strives to encourage more African Americans to take ownership of black beauty supply stores. Although the black community may have seen a dip in its economic stronghold during the recession, a new report shows that African Americans are bouncing back.
According to Public Broadcasting Atlanta, Georgia is the fifth largest African American Consumer Market in the US. A new report from the University of Georgia observes that the numbers have seen a growth. UGA’s director of economic forecasting, Jeff Humphreys says that black buying power has increased from $66 billion in 2010, to $73 billion a year. Black Georgian consumers spend 22 cents of every dollar compared to 8.5 cents nationwide.
He attributes the increase to several factors, including population growth, higher education and entrepreneurship among African Americans living in Georgia.
“So this is a very compelling market for companies targeting African-American consumers, whether with existing products, product development or advertising,” Humphreys said to Public Broadcasting Atlanta.
Now that African Americans in Georgia have the buying power, let’s hope they’re spending the money in the right way with black businesses so that the money stays in the community.
By Brittany Hutson
It’s peculiar how the buying power of the African American market is reported to reach $1 trillion this year, according to market research publisher Packaged Facts; yet the market remains largely untapped by advertisers. With such a consumer market ready to spend so much on goods and services, why are companies missing out?
Melvin Wilson, a digital marketing executive with the multicultural ad agency UniWorld Group, who has clients such as Time Warner Cable and CVS, says a lot of advertisers miss opportunities to own relationships with the African American market. “Marketers will take segments that aren’t necessarily split by race, like mothers, and they’ll try to own that segment and protect it from other competitors,” he says. “I really haven’t seen any marketer take that stance towards African Americans.”
Wilson adds that companies underestimate the power of the Black consumer. “They should be worried about how we’re going to influence other folks into buying stuff,” he says. “There’s a market for premium headphones because Dr. Dre decided to make one. Now there’s kids [of all races] walking around with $379 headphones on.” We collaborated with Wilson to develop a list of seven companies who’ve been successful in their efforts to attract the Black consumer.
By Steven Barboza
Black females are a commanding force in the U.S. economy. Yet for all their economic prowess, their needs and preferences remain a mystery in boardrooms and brand strategy sessions. For lack of knowing what moves these super-consumers, many marketers resort to a one-message-fits-all-consumers approach that’s often unsuitable for black females.
“Most advertisers just don’t get us,” said Sarah Lattimer, president and CEO of Lattimer Communications, an advertising agency specializing in the African American female market. “They don’t understand us. They don’t know how to sell to us, how to talk to us. They don’t know what makes us make the decisions to purchase or not to purchase their products.”
The vast majority of African-American consumer spending is done by females. Some marketers say 85 cents of every $1 spent by blacks last year was spent at the influence of black females. Others estimate black female buying power at upwards of $565 billion last year alone. Either way, the buying habits of this group of consumers could well decide the fortunes of many of the world’s largest corporations.
And yet, many companies, unsure of how to target the market, are stumbling in their efforts to reach black women. In effect, a large number of the nation’s 22 million black females are ineffectively served – and corporations are leaving untold billions of dollars in potential profits on the table.
“I’ll never forget it: one black woman told me that no matter how much Pantene she uses, she will never be able to fling her hair around like the [white] women in those TV commercials,” said Lattimer, relaying the frustration of a participant in a national study of black female consumers.
Lattimer added, “There are certain industries that do a terrible job – automotive, financial services, health care, travel. I don’t think they think [black females] have money or that we’re traveling.”
The Lattimer Communciations study found that 86% of black females believe advertisers need to do a better job understanding and marketing to them.
The buying power of the nation’s 40 million African-Americans, some 13% of the U.S. population, was $910 billion last year, according to the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business. Their economic muscle is mightier than the gross domestic product of Russia or India.
Despite feeling slighted by marketers, African-American females – who comprise 55% of the black population, compared to 52% females in the overall U.S. population – are much more influential than the general female population in consumer transactions. In fact, black females make the lion’s share of buying decisions among African-Americans.
“Black women make 85% of the brand purchasing decisions of black consumers,” said Miriam Muléy, CEO of the 85% Niche, a marketing consulting firm that focuses on women and women of color as key consumers. The general population of females make 62% of brand-buying decisions, according to other researchers.
Muléy cited RL Polk and Yankelovich studies pointing out that black women account for 58% of all new cars and trucks purchased by African Americans, compared to 44% of women in the general population; that black women spend $57 billion on food items per year, and that black females spend 30% more than the general market on personal/beauty products. Facial skin-care products have grown to an estimated $20 billion category worldwide.
A Yankelovich study conducted for a women’s marketing conference found that 59% of women feel misunderstood by food marketers, 66% by health care providers, 74% by automotive marketers, and 84% by investment marketers.
Being misunderstood only leads to being underserved. It’s tough for women to find jeans that hug their curves properly, or for women to get financial advice without feeling patronized, researchers note. This is especially sad, considering U.S. females spend $5 trillion a year.
As a global economic force, women move world markets. They spend $20 trillion a year, and represent the world’s largest market opportunity, one that is more than twice the size of China and India combined, according to Michael J. Silverstein, senior partner in the Boston Consulting Group’s Chicago office and co-author of “Women Want More,” a book about the female economy.