Recent Nielsen data confirms a seismic shift that is occurring in the demographics of American consumers. First released in 2015, Nielsen’s report on The Multicultural Edge revealed that multicultural consumers are “the fastest-growing segment of the U.S. population.” While Hispanics, African-Americans, Asian-Americans and other multicultural groups currently make up around 40% of the population, they are on track to be a numeric majority by 2044.
This young and growing segment of the consumer population is already driving changing trends in groceries and beverages and is poised to greatly impact markets such as technology, entertainment, and fashion and beauty as well. This segment of consumers offers an exciting opportunity and a challenge for today’s brand-makers, entrepreneurs, and innovators. How will we respond?
Diversity is More than a Buzzword
Culture is a powerful motivator. It plays a major role in developing our tastes, our aspirations, and our social consciousness. This new emerging majority of consumers demands that marketers and advertisers embrace diversity as more than just a buzzword. Instead, it must be a guiding principle in efforts to speak authentically to a lived experience that is increasingly intersectional, cross-pollinated, and uninterested in homogeneity.
For too long, American companies have assumed that cultural assimilation would drive diverse consumers towards products and brands geared toward the cultural majority. As that majority becomes the minority over the next several decades, a new approach is necessary. To develop that approach, we must look to the unique experience of this rising class of super-consumers.
Who Are MultiCultural Consumers?
As Nielsen reveals, “92% of the total growth in U.S. population from 2000 to 2014 came from multicultural consumers.” The Hispanic population is the fastest growing, accounting for over half of projected population growth by 2020 according to the U.S. Census Bureau. African-American consumers will be growing at an 18% rate by 2020, with Asian-Americans responsible for 15% of growth. In contrast, the non-Hispanic white population is shrinking, with a 7% share of growth in 2020 and 6% projected by 2030.
This growing group of multicultural consumers are young and forward-thinking, with increasing buying power and influence over consumer trends. As a group, they tend to be media-savvy and socially conscious, driven (befitting their millennial status) by social empowerment and enabled by technology and social media. In fact, multicultural consumers stand out from others in their age bracket as more mobile-connected than most, using smartphones and other mobile devices at higher rates than non-multicultural peers.
The multicultural population’s embrace of technology and connectedness points to another differentiating factor: they are “expressive and inclusive, which allows (them) to simultaneously maintain their cultural heritage and see themselves as part of the new mainstream,” as Nielsen reports. This is perhaps the essential, defining trait of this demographic. They place immense value on their own cultural heritage and identity while simultaneously seeking to break down barriers between themselves and others, creating a new melting pot in which difference is celebrated as a unifying, rather than dividing, factor.
Reaching Tomorrow’s Super Consumers
The challenge for today’s brand-makers, advertisers, and marketers is to engage the unique experiences of multicultural consumers while embracing this “new melting pot” mentality. While initial efforts at reaching these communities have focused on delivering targeted products to distinct subsets (for example, makeup and hair care products created specifically for women of color), the multicultural ethos prizes accessibility and inclusivity. The task of balancing these competing demands is crucial to brands seeking to establish themselves in a wider multicultural market.
In the effort to effectively engage multicultural consumers, representation is key. Diverse experiences, sensitivities, and preferences must be honored in order to built trust and loyalty. The most effective way to do this is to ensure that diverse voices are a foundational part of the product development, branding, and marketing process. Authenticity, a priority for millennials and multicultural consumers in particular, must be front-of-mind at every stage of consumer outreach.
This is why diversity must be more than a buzzword for today’s brands. The best way for companies to prepare for a future in which multicultural consumers are the majority is to immediately begin hiring members of multicultural communities. Partnerships with trusted sources within these diverse communities are another vital way to create authenticity and credibility with the rising multicultural market.
In future installments, I’ll continue to explore how brands can build trust and engagement with multicultural consumers. As Nielsen’s research proves, these young people are the future of the American consumer population. It’s time to embrace the opportunities this new melting pot provides.