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August 15, 2012

Hispanic Affluence and Buying Power On the Rise

By Shankar Pandiath, TMCnet Contributor

There are over 52 million Hispanics in America and they currently represent the majority of the population growth for the next five years. According to an annual UGA Selig Center Multicultural Economy study, the current Hispanic buying power is projected to grow over the next several years despite the current economic recession. The report projects that the buying power of Hispanics, an ethnic group is projected to rise from the projected $1 trillion (in 2010) to $1.5 trillion (in 2015). This would account for about 11 percent of the country’s entire buying power. In addition to their surging affluence, brand loyalty is also very strong with this ethnic group.

The director of the Selig Center and the author of the above report, Jeff Humphreys, projects that the underlying growth trends for this ethnic group is very strong, irrespective of the recession. The report defined buying power as money that is available for spending after taxes and indicated that the buying power of this group is immense and exceeds that of the general population. The Hispanic market alone is larger than the GDP of Indonesia.

Eye, a leading mall media provider recently conducted a study to better understand the behavior of the Hispanic Shopper’s preferences and buying habits. It was not surprising that over 62 percent of the Hispanic people accepted offers on their phone, making them ideal candidates for offers and couponing. They also added that the Hispanic shopper is educated and is a person who seeks out information on sales and offers prior to visiting a mall. They are avid shoppers who are greatly influenced by promotion deals, and over 68 percent of them, view the mall as a place to hang out with family and friends.

The Hispanics are an important factor to future business success with over 68 percent of them spending time watching a movie or video over the Internet. They also spend over 20 percent more time watching video on their mobile phones.  In addition, more than 28 percent of this ethnic group are more likely to own a smartphone than the average non-Hispanic White segment. The Hispanics also outpace all the other ethnic groups in mobile data service consumption and rely a lot on their mobile devices for internet connectivity.

Hence, what does this information mean for marketers and brands?  Marketers should waste no time in marketing products to this segment and should concentrate on investing in mobile, social media, online video and other digital media marketing tactics that target this ethnic group. Hispanics are fast outpacing the rest of the population in smartphone usage. The smartphone usage growth was around 26 percent for Hispanics and 18% for the rest of the population in 2010. As more Hispanics buy products online, it is evident that mobile marketing will have to increase capital spending so as to make the most of this opportunity. 

Targeting this demographic with smartphone advertising campaigns would be the most ideal marketing strategy as the group spends much time tweeting, and using social media apps over their mobile phones. Hence marketers should waste no time in reaching out to this growing ethnic group through the new social media.

Franklin Rios, president of Luminar, said many marketers looking to capitalize on this market segment have really failed to connect with the Hispanic consumer. He added that Luminar looks forward to providing their clients and marketers with considerable insight on the Latino market that can positively impact their return on investment.

Want to learn more about the growing communications opportunities in Latin America? Don’t miss LatinComm Conference & Expo taking place Oct. 2-5, in Austin, TX.  Stay in touch with everything happening at LatinComm. Follow us on Twitter.

Edited by Amanda Ciccatelli
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