By Clare O’Connor (Forbes)
With 12 days left until Christmas, retailers are pulling out all the stops to attract last-minute shoppers to their brick-and-mortar stores and online iterations alike. Recent data indicates there’s one group they should be paying special attention to, particularly given their propensity to spend big around the holidays: Hispanic Millennials. Here’s why.
Recent data indicates there’s one group they should be paying special attention to, particularly given their propensity to spend big around the holidays: Hispanic Millennials. Here’s why.
They have disposable income.
Young Hispanics between the ages of 20 and 29 carry about $10,000 less debt than other Millennials, according to a September study by PNC Bank. The average Hispanic twenty-something owes $18,000, versus $27,800 for their peers.
Hispanics in this age group are also more likely (45%) to be saving on rent by living with their parents than their counterparts (39%), as well as being more likely than not to know their credit score (57%).
“Their parents have instilled in them the value of money and the importance of budgeting,” said Andrea Bell, editor of retail and consumer research at trend forecaster WGSN Group.
They might still earn less than young people from other backgrounds, but young Hispanics are getting richer, and fast. Nielsen’s Hispanic Retail 360 study for 2013 shows an 89% increase in Hispanic Millenial-led households earning between $50,000 and $100,000 a year in the last decade alone.
In 2003, 11% of American homes with a Hispanic twenty-something at the helm made over $75,000 a year. In 2013, that number has increased to 21%.
They shop less in-store, but spend more.
Hispanic Millennials spend an average of $2 less per shopping transaction than white Americans in their age range, according to Nielsen. However, annually, they spend more on retail purchases — to the tune of almost 10%.
“They shop less in-store, but they buy more key items,” said Bell, who noted that these shoppers make “calculated” buys during back-to-school season as well as before Christmas and Mother’s Day (“They’re very keen to shop with their mothers, more so than their non-Hispanic peers,” she added).
They spend proportionally more on clothes and shoes than other demographics, according to data released by the Association of Hispanic Advertising Agencies. Hispanic women spent an estimated $3.3 billion on brand-name footwear between 2012 and 2013, representing 18% of the total women’s fashion shoe market.
“Latino culture is class-rigid,” said Andrew Speyer, managing director of Wing, the WPP group’s Hispanic advertising agency. “By shopping, they’re buying their way into the American dream.”
Speyer added that some young Hispanics splurge on spending in the run-up to Christmas partly because they deny themselves big-ticket items for the rest of the year. “In immigrant communities, there’s often a culture of sacrifice and self-denial,” he said. “The holidays are the time for indulgence, and demonstrating their accomplishments.”
They’re smartphone shoppers.
According to the 2010 US Census, the median age of Hispanics in the U.S. hovers around 28 — a veritable jackpot for tech-savvy retailers. Across the board, Hispanics lead the way in mobile internet adoption. Over 75% of Hispanics use the web on their phones, compared with 73% of African-Americans and 60% of whites, according to eMarketer data for 2013.
Nielsen research shows that young Hispanics own more smartphones than any other Millennial group. They use apps more, they shop via their phones more and — in a boon for advertisers — they watch around an hour more mobile video per month than other demographics.
Wing’s Andrew Speyer advised retailers looking to capitalize on this group’s smartphone shopping habit to ensure their mobile sites and apps are optimized for Android devices.
“You can’t just think about browsing and transactions on an iPhone,” he said. “Hispanic Millennials are way over-indexed on Android. Think about it: these phones are feature-packed, they’re inexpensive and you can pay as you go with brands like MetroPCS.”
Retailers already proving popular with Hispanic smartphone shoppers include Macy’s, Sears, Gamestop, Walmart and Old Navy, according to data from Experian showing November transactions versus non-Hispanic users.
“Some of these retailers are actively reaching out to these people,” said Speyer, citing Macy’s Hispanic Heritage month events this past fall and Sears’ Nuestra Gente online lifestyle site aimed at Latinas. “Try and integrate mobile and digital into your other comms,” he advised. “Don’t get caught off guard.”
Categories: NGL News