All Articles Tagged "spending power"
Black women spend a lot of money and companies should be vying for their business with quality products and marketing that’s crafted to appeal to them. Goes without saying right? Wrong.
Early last week, we reported on new findings from The National Newspaper Publishers Association (aka Black Press of America) and Nielsen predicting that black buying power will total $1.1 trillion in 2015. Today, Advertising Week hosted a panel, “She’s Gonna Have It: Black Women, Their Money, Their Mindset, And Their Motivators” that dealt with the reality of the black female consumer and what companies should be doing to win her over.
The discussion opened with a few facts and figures about the black female market. Among them:
-Between 1991 and 2000, the number of black women getting a college degree rose 172 percent. It rose another 50-plus percent through 2011. “These women are poised to make a lot of money,” said panelist Cynthia Perkins-Roberts, VP of multicultural marketing for the Cabletelevision Advertising Bureau.
-Despite the high levels of unemployment in the black community brought on by The Great Recession, incomes are still rising.
-Thirty-eight percent of black households are led by women.
-”Social media is the game changer when you talk about black women. They are early adopters,” said Alisha Joseph, VP of diverse segments for Wells Fargo.
“Black women need to be marketed to differently because the composition of their households are different,” added Perkins-Roberts. Or, to use a quote that Camille Leak, senior consultant at The Futures Company, posted on the video screens, “Black people are not dark-skinned white people.” (That comes from Tom Burrell, founder of Burrell Communications, BTW, and was met with cheers from the largely female though diverse audience.)
It has always been the case that when you’re reaching diverse markets, you have to use diverse tactics. But that hasn’t always been the practice at companies and brands. Oftentimes, advertising for the black community is same thing used for the mainstream market with a black actor cast to play the lead role. The message is still irrelevant.
Just yesterday, Pamela El, State Farm’s VP of marketing and one of the most influential marketing execs in the industry (as determined by Ad Age) called the way that she’s pitched by the ad agencies seeking her business “infuriating.”
“”It’s so irritating when agencies walk in the door and they feel that they have to bring a black person — and we all know that they don’t have any — so they bring in the intern to present to me,” Business Insider quotes El.
Now that the spending power of black women is being recognized, brands are seeing the value of having a better understanding of this consumer group.
“There needs to be more people of color in the board rooms and companies need to push the insights,” said Perkins-Roberts. “There’s a push now even in the black community to tell the story from a business rationale.”
Those insights acknowledge the unique qualities of black women, something, Leak points out, companies may have been nervous about for fear of being offensive. Because of that, they’re missing out on chances to move product. “A lot of large companies left a lot of money on the table by not getting on the natural hair movement early on,” said Marcia Cole, CEO of Ivy Digital, a digital marketing company.
At the same time, our moderator, Essence and New York Times journalist Lola Ogunnaike, asked whether stereotypes are getting in the way of effectively interacting with black women. In other words, when companies do reach out to black female consumers, they’re going in with the idea that, for instance, black women are “sad” or “lonely.” Actually, they’re quite the opposite. Other info compiled by Leak shows that black women are optimistic, want to enjoy life, look for ways to engage with their communities, seek to show their individuality, and, overall, want to be excited.
The buying power of black women is forcing companies to pay attention to the needs and desires of this community. Those that don’t will get left behind.
The National Newspaper Publishers Association (aka Black Press of America) and Nielsen have released a new report, “African-American Consumers: Still Vital, Still Growing 2012 Report,” finding that black consumers turn to black media outlets to find items of relevance to them. This may seem like a no-brainer, but the report also found that advertising in black media only represents a small portion of the amount spent on advertising as a whole. So there are great opportunities for companies to reach out to this market in places that they’re turning to for information.
“Marketers underestimate the opportunities missed by overlooking Black consumers’ frustration of not having products that meet their needs in their neighborhoods,” NNPA chairman Cloves Campbell says in this story on Politic365. “And companies that don’t advertise using Black media risk having African-Americans perceive them as being dismissive of issues that matter to Black consumers.”
The report found that an overwhelming majority, 91 percent, of blacks think black media is relevant to them. Another big majority, 81 percent, think products advertised in black media are relevant to them. And brand name items represent 82 percent of the purchased in black homes.
However, 2011 advertising in black media outlets was $2.1 billion. In the same year, $120 billion was spent on general mass media advertising. The report predicts that black buying power will total $1.1 trillion in 2015.
The study also highlights the importance of social media and online engagement to the black community. And notes that black consumers, especially older ones, tend to make more shopping trips, spending less than the broader population during each trip.
“As is true among non-Black households, the younger generation of Black households offset fewer overall shopping trips with higher per-trip spending than their older counterparts. But, in all instances, Black households spend less per trip than non-Black households,” the Nielsen blog writes. The black population is 14 percent younger than the broader population with a media age of 32 years old.
This report was timed to release during the Congressional Black Caucus Foundation’s annual conference. We also wrote about the roundtable discussing the link between small business ownership and the wealth gap, which took place during this conference.
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When African American consumers love a product, they really love it. According to a recent study conducted by NewMediaMetrics, blacks are more brand loyal than white consumers. This could be the push needed for African Americans to flex their buying power (which is projected to reach $1.1 trillion by 2015), demand increased advertising targeted to African Americans and media outlets directed toward the black consumer.
“Clearly, the African-American consumer is more passionate about brands than the Caucasian consumer,” said Gary Reisman, co-founder of NewMediaMetrics, in a press statement. “We also see stronger attachment to media properties, so if marketers cross reference the brand data to the media data, they’ll make more effective use of their media spends in reaching both consumer segments.”
NewMediaMetrics co-founder Denise Larson added in the statement, “Perhaps the overall passion that African Americans have for brands will be a ‘wake-up call’ for marketers to strategically think of their brands from the perspective of consumer diversity, especially when it comes to budget and spending priorities.”
In the study NewMediaMetrics, a strategic marketing optimization company, quantified consumers’ emotional attachment to brands and media across a range of demographics and found that African Americans were more attached than whites to 73 percent of the 350 brands looked at by the study. These brands included everything from Lexus and Google to Tide, Macy’s and Oreos.
Emotional attachment (or EA) can boost revenue. Those who are highly attached to a brand contribute 43.7 percent more revenue to a brand, according to NewMediaMetrics. EA also affects levels of media engagement (40 percent more viewing and intensity of viewing). And African-American adults are, according to the findings, attached to 60 broadcast and cable networks at a level of 24 percent, compared to 17 percent for whites.
NewMediaMetrics also says EA sparks positive social chatter; highly attached consumers are 43 percent more likely to talk about products and services to friends and family via social channels. This too is significant because the study revealed that African Americans are 18 percent more attached to Web sites and digital properties than whites.
Women have incredible buying power, but they also have a great deal of anxiety about financial planning.
Studies show that with women increasingly taking a lead financial role in the home or contributing significantly to the household finances, they are having a bigger impact on the way that money is being spent. But women are still apprehensive about making decisions on how that money is invested.
Research cited by USA Today shows that 38 percent of women have “high or moderate” anxiety about retirement; only 12 percent say they have experience with investing; and only 12 percent have tolerance for financial risk.
“If we find ourselves in a position 15 years from now where the husbands start to pass away and the wife doesn’t know what to do in terms of managing money, there’s going to be a lot of bad decisions made, a lot of economic waste and a lot of scared people,” Justin Reckers, a certified financial planner told the newspaper.
A Prudential study cited by the paper shows that in 2012, with more than 1,400 women and 600 men surveyed, found that the majority are the “primary breadwinners” in their families. And for married women and those with partners, 22 percent make more than their men.
Sources in the story say that the financial services industry is still geared towards men and information needs to drop the gender stereotypes.
Women can also help themselves by being proactive about educating themselves in these matters. It’s not only good for you and your future, but that of your family as well.
It’s no secret women like to shop and with the buying power of African-American consumers projected to reach $1.1 trillion by 2015, women will be the primary driver of most of those purchases according to a new report on the State of the African-American Consumer from Nielsen.
It’s a powerful position to be in, although unfortunately one that is directly related to the fact that black women are increasingly serving as the head of household these days. Automobiles and transportation was the only category where men were seen as having greater influence in purchases. Men and women had an equal role in deciding when to spend on electronics or social activities, but in all other areas women were the primary influencers.
In major retail channels, African-Americans spend less than their counterparts. For example, African-Americans spend an average of $52.60 per trip in the supercenter channel which is 16% less than the non-African American average of $62.50. Spending per trip at grocery stores was also 18% less per trip for African-Americans—$34.10 vs. $41.80. That difference may be trumped by the fact that on average African-American households take 8% more shopping trips: 165.7 annually versus 153 for other households.
U.S. companies are loosing out by neglecting a rather attractive and overlooked consumer: American Muslims.
There is an estimate number of six to eight million Muslims in this country that possess an annual spending power between $170 and $200 billion. It is believed that two-thirds of Muslim households make more than $50,000 a year and a quarter earn over $100,000. Miles Young, chief executive officer of Ogilvy & Mather Worldwide, an international advertising, marketing and public relations agency, said in a speech at this past December’s second annual American Muslim Consumer Conference that Muslims are the best-educated religious group in America and over 40% have bachelors’ degrees. Clearly, this is a consumer that companies cannot afford to not attract.
According to the Associated Press, corporations in Europe have long been catering to Muslim communities there. Nestle has about 20 factories with halal-certified production lines and advertises to Western Muslims through its marketing campaign called “Taste of Home.”
So why is it that companies in Europe have been able to successfully attract and retain the interest of their Muslim consumers?
Part of it has to do with Muslims in Europe having lived there for multiple generations, said Ponn Sabra, founder and owner of the online blog community for American Muslim Moms, AmericanMuslimMom.com. Also, “European Muslims are extremely strong in faith, very vocal, [and] much more confident in their practice of our faith than the majority of Muslims living in America.”
It also helps that Muslims in Europe are not stereotyped like Muslims in America, added Sabra. It’s only been recent that businesses in the U.S. have started to tap into the Muslim consumer market. McDonald’s and Wal-Mart have entered the halal arena and last August, Whole Foods began selling its first nationally distributed halal food product—frozen Indian entrees called Saffron Road. But because there is still intensified anti-Muslim feeling throughout the country, this is causing companies to worry that they will be attacked for going after this consumer.
But Muslims do not necessarily want companies to be their advocates against opposition, more so as they would appreciate that companies get to understand their values. Mohammed Abdullah, director of the 2009 Conference, said in a press release, “Muslims want to be acknowledged in mainstream media. You don’t need to change your product of show Muslims in your ads. Instead, consider advertising in a Muslim media outlet. Say Eid Mubarak or Ramadan Kareem during the holidays. The Muslim community will respond. When we see an ad we like we send it to our friends and share it with each other,” he said.
Of course, the worldwide market for Islamically permitted goods, also known as halal, is the best option for companies interested in attracting the American Muslim. The industry includes foods and seasoning that omit alcohol, pork products, cosmetics, finance and clothing. According to Young, the global halal market is worth $2.1 trillion dollars and it is growing at $500 billion dollars a year.
Muslims as entrepreneurs shouldn’t be underestimated either. For example, Tariq Farid developed and launched one of today’s successful and international companies in the floral industry that many know and love as Edible Arrangements.
“The American Muslim Consumer is extremely loyal, wealthy, educated and well-connected on and offline,” said Sabra. “Companies who jump at the opportunity have the potential for life-long happy customers who willfully recommend their products and services.”
(Black Enterprise)–According to a July 2010 poll, 46% of African Americans mostly use their phones to access the Internet, 41% for e-mails, and 33% for Facebook. Despite the breadth of information accessible online, these numbers suggest that members of the Black community are more concerned with entertainment. World music artist David Minott aims to change that by calling millions of African Americans to action in an effort to show them how they’ve been underusing the power at their disposal. With today marking Martin Luther King, Jr. Day, the Jamaican born-and-bred musician announced the launch of his “Our Silence Speaks Volumes: The Black Out” campaign. Over the course of the next two weeks Minott will urge people of color to turn off their cell phones for 24 hours starting on the first day of Black History Month, February 1. According to the US Bureau of Census, the Black community has an excess of $800 billion dollars in expendable income annually, but still lacks the power of ownership.
I have no will power. Well…at least when it comes to shopping. I’ve tried shopping “black” a hundred times, but always lose the gumph! Having lived in D.C. and Brooklyn, one would think it’d be easy. Unfortunately, Koreans don’t have a drop of black in them and the Pakistanis on the corner accept card and cash.