Hispanic buying power and how to reach it
Can your business afford to ignore 60 million people? That’s the current population of the Hispanic community in the US, who represent a buying power of 1.5 trillion dollars. In this post, we’re going to explore Hispanic buying power in the US, and how you can use this knowledge for the benefit of your business.
Understanding Hispanic buying power
Like any market, it’s beneficial to get a clear idea of the demographics you’re trying to reach before beginning your campaign. There are some basics you need to remember when looking to tap into Hispanic buying power:
- With a population of 60 million people, Hispanics represent the second largest demographic in the US.
- A buying power of 1.5 trillion dollars makes Hispanic buying power the second largest in the US.
- Hispanic households have lower incomes than average.
- The Hispanic market speaks two languages.
- Hispanic communities are made up of people from many cultures and backgrounds.
- Two thirds of Hispanics are digital buyers.
- The key states to target to access Hispanic buying power are Arizona, California, New Mexico, and Texas – the Hispanic population in each is over 30% of the total for the state.
Already a sizeable market, it’s important to examine the expectations for the future of Hispanic communities. Notably, it is estimated that in the next 40 years, the Hispanic population in the US will double. In the next 5 years, Hispanic buying power is expected to grow to 1.8 trillion dollars.
It’s also worth noting the historic data that identifies the Hispanic market as something worth pursuing in the long term. Approximately one fifth of all Hispanic households in the US have annual earnings of over $100,000. In the past decade, Hispanics represented 60% of the gains in homeownership in the US. Combined with an increase in college enrollment, the potential for a wealthier generation of Hispanics should not be ignored.
How do you market to 60 million people?
The first thing to remember is that you can’t market to everyone in the Hispanic community at the same time. There exist a number of cultural differences, which all depend on where in the US you look. Key details to pay attention to include:
- Whether they’re first, second or later generation Hispanics
- Their level of education
- Their first language
Each detail is important, and feeds into how you can market to the community.
Generally speaking, Hispanics are community and family focused. This presents both opportunities and challenges for marketers attempting to tap into Hispanic buying power. If you can successfully prompt a purchase within the community, word of mouth is likely to spread information about your product or service. This can be useful for your marketing campaign, and can provide significant opportunities to acquire feedback, but should also come as a warning: people talk.
Early adopters of technology
Reaching a market that’s willing to try new things is important for the growth of an idea. Even if your offering isn’t based in technology, advances in advertising capabilities allow for easier targeting of material to people with specific tastes and from particular backgrounds. Given the average 52 hours per week that Hispanics spend on their phones, taking advantage of targeted advertising allows you to reach more people more quickly.
Hispanic buying power comes in numbers
We noted earlier that more Hispanics are enrolling in college, and that Hispanic buying power was on the rise. With more than 51% of Hispanics below 30 years of age, the market is young. When we consider both the community orientation of Hispanics and their use of smartphones, in particular, marketers can develop a long-term relationship with a growing demographic in the US.
Brand engagement is high
The fourth piece of the marketing puzzle to take note of is the level of brand engagement in Hispanics. When looking to target this group, a localization approach can help distinguish between Hispanics whose families come from different countries. Language is but one factor to remember in trying to access Hispanic buying power, after all. A marketing campaign should target the culture in which your potential customers are thriving, which is likely to be different across the US.
Culture is influenced by a number of factors, including available wealth and the demographic diversity of a community, along with previously mentioned factors such as the first language of a household, which generation your target market belongs to, and the level of education they have received.
Understanding your audience is the first step to effective marketing. By breaking down barriers in communication and understanding, we can help your brand utilize Hispanic buying power, now and into the future.