Minority Growth Represents Retail Opportunity
The increasing percentage of the U.S. demographic profile represented by ethnic minorities presents an opportunity to retailers, according to The Nielsen Company. In particular, retailers who sell CPG products and/or engage in mobile retailing can benefit from shifting U.S. demographics.
Minority Growth Offers CPG Potential
By 2050, more than half of the U.S. population will be non-white (African-American, Asian, Hispanic). In that same time frame, the economic opportunity for brands in the multicultural CPG space is projected to exceed $500 billion.
Multicultural CPG Buying Trends
When compared to the general population, on average…
Hispanic Shoppers
- Tend to spend more on categories for babies and children. Hispanic households represent 11.8% of CPG total spending, but 16.6% of disposable diaper sales.
- Tend to spend more in traditional mass merchandise and warehouse clubs.
- Tend to spend more on food consumed at home.
African American Shoppers
- Tend to spend more on health and beauty products, such as fragrance. African Americans represent 11% of CPG total spending, but 20.3% of dollars spent in beauty supply stores.
- Tend to spend more in drug and dollar stores.
- Tend to spend more on ingredients used to cook from scratch.
- Tend to buy fewer items on deals or with coupons.
- Tend to spend more on food consumed at home.
Asian American Shoppers
- Tend to spend more in club stores. Asian Americans represent 3% of CPG total spending, but 5.5% of dollars spent in warehouse clubs.
- Tend to spend more on categories for babies and children.
- Are more likely to eat outside of the home.
Minorities More Likely to Use Mobile Technology
Compared to the general population, African Americans and Hispanics are both more likely to use mobile technology.
Demographics Show Huge Long-term Upside for Mobile Retail
The global mobile retail market is expected to top $12 billion by 2014, according to [pdf] a new study by Juniper Research. “Mobile Marketing & Retail Strategies: Advertising, Coupons & Smart Posters 2009-2014” indicates that the mobile retail market, which was worth $4.1 billion in 2009, will experience average annual growth of about 24% during the next four years to reach slightly more than $12 billion in 2014.
Considering higher usage rates of mobile technology by African Americans and Hispanics and long-term demographic trends, mobile retail, already showing strong growth trends in the near term, should grow exponentially in the next 40 years.