Meet the “Goddess,” a luscious, tawny-skinned young female. Though only a mannequin, at size 8, her curvaceous form is sending shock waves across retail display windows from Los Angeles to Manhattan. The “Goddess” is two and a half inches more mannequin then the traditional size 2/4 and her arrival, the fashion press notes, celebrates J.Lo more then Twiggy
America is not just growing more Hispanic, we’re flaunting it.
But recent research data on Hispanic households goes beyond such fashion phenomena, broadening the advertising and marketing community’s knowledge base about this cultural segment in sometimes surprising ways. In fact, if there’s one noticeable trend regarding Hispanic consumer buying habits it’s that Hispanic households are now all over the demographic map.
“One way we try to help our clients understand the Hispanic household is to explain they represent very different subgroups,” says Pedro Blanco, president of the Blanco Lorenz advertising agency. “You have households that are young; households that are old. They can be poor; they can be wealthy. What is very powerful is that all of them share certain psycho-social themes.”
According to Blanco, four key “beliefs” unite Hispanic households: acceptance that they are living between two cultures; that the generation gaps that exist are vivid; that American assimilation — even when hotly pursued — doesn’t necessarily mean letting go of one’s Latino roots; and, family trumps all.
It’s also clear that significant numbers of Hispanic consumers are more highly paid, better-educated and bigger spenders than some would believe. According to a recent Media Audit survey of Hispanic households that go online, a majority have incomes above $50,000 (in fact, 14% make $100,000 or more). Over three-fourths of these consumers use an ATM card; 62% spend over $100 a week on food purchases; and four-times as many plan to buy a luxury car than mainstream Americans who go online. Media Audit based its findings on the answers of Hispanic respondents who accessed the Internet at least once over the last 12 months.
In Media Audit’s Hispanic National Report, 52.5% of Hispanics surveyed in 81 markets are financial optimists; nearly 60% recently shopped for clothes; and over 69% own at least one personal computer. But the results show that there are still marketing opportunities among foreign travelers, mortgage and insurance buyers, and credit card owners, groups where Hispanics generally underindex.
According to recent Synovate data, the salient characteristics of the Hispanic market mirror those of the “ideal” consumer: they are young (25.4 median age); boast families with children (3.5 people per household); and represent a large population (43 million plus). And they are quality conscious but brand loyal with over $575 billion in annual buying power. Most important, Hispanic households are growing: currently one out of seven Americans is Hispanic. By 2050, they will represent one out of three.
Not surprisingly, this growth is directly affecting home purchases.
“According to Fannie Mae, 50% of all first-time home buyers are Hispanic,” says Joe Schramm, president of Schramm Sports & Entertainment, “which is why Sears [Roebuck & Co.], Ikea [International A/S], Loews [Corp.] and Home Depot [Inc.] are currently running special campaigns targeting Latinos.”
Schramm also cites data from the 2003 Multicultural Report showing food shopping among Hispanics is a cultural event. “Nearly 50% shop once a week; 27% shop two or three times a week; and 35% use coupons,” he says. “They shop frequently; they spend a lot of money; they go with their families. It’s a social experience, and it’s a great place to reach them.”
And, says Blanco, “They love gadgets.” According to Synovate data, over 61% of Hispanic households have CD players; over 52% own DVD players; and 61% not only own cell phones but constantly experiment with the latest bells and whistles.
“Hispanics are soaking up new things,” Blanco says. “They turn over their cell phones constantly; they overindex on speaker phones and other gadgets. Hispanics, with its youth and large families, are the next big thing.”
According to the 2000 U.S. Census, Hispanics represent 14% of all U.S. population, but recent data show Hispanics represent 50% of total population of Los Angeles, 30% of New York City and 25% of Chicago.
“We are embedded in the urban culture,” Blanco says, but, he warns, that doesn’t mean there’s one single urban channel to reach them.
“One of the major mistakes advertisers make in trying to reach the Hispanic household is only using Hispanic media,” Blanco says. “Even as cable MSOs begin to add incremental new Spanish-language channels, they are not the whole story. In a single Hispanic home, you can have someone watching Discovery Kids, someone watching MTV [Music Television], SciFi [Channel], CNBC, as well as novelas or ESPN Deportes.”
In order to understand the “whole story” on Hispanics, Synovate has divided the consumer segment into six categories. The largest category, 26% of all Hispanic households, are the “New Latinos” — relatively young, mostly foreign born, living in America for a significant amount of time, but only partially acculturated with “intermediate levels of cultural tension.” On the other hand, the “American Latino,” which makes up 23% of Hispanic households, is very comfortable living in both worlds. They are also partially acculturated but have low levels of cultural tension. This is the group most inclined to purchase electronic gadgets, sports utility vehicles and fast food.
Yankelovich Partners also uses differing Hispanic profiles for its Monitor Multicultural Marketing Study. “Hispanic Dominant” represents those closest to their original culture. “Intercultural” are those who retain as much as possible of their Hispanic culture and values, while also adopting U.S. Anglo culture. “Assimilated” are persons who’ve moved away from their Hispanic culture to adopt U.S./Anglo culture, language and family values.
And they access information differently. According to Yankelovich, 43% of total Hispanics agree “I get more information about a product when it’s advertised in Spanish.” Some 83% of those who fall in the Hispanic Dominant category express that belief, but only 36% of Intercultural Hispanics and 10% of Assimilated Hispanics are in agreement with that statement.
According to Schramm, recent findings from Media Audit show real marketing opportunities in several areas where Hispanic buyers are underrepresented. While 76% of the general market has health insurance, only 40% of the Hispanics do; while 86% of the general market has a major credit card, only 52% Hispanic households do; while 65% of general market have home Internet access, only 36% of Hispanics do. More dramatically, while 75% of the general market owns life insurance, only 40% of Hispanics are covered.
All of this suggests that marketers can find plenty of growth potential in the Hispanic arena. But Latinos certainly can’t be taken for granted. Blanco points out that the process of learning about Hispanics and understanding their habits and interests is unending.
“The biggest mistakes brands make is thinking that anything they do to reach the Hispanic household is ever enough,” Blanco says. “It actually takes years. Brands must understand they won’t get immediate results.”