Companies and businesses are missing out on key opportunities to partner with Hispanic and African-American consumers — particularly when it comes to home ownership and banking. The Hispanic population is growing at a faster pace than any other subset; however, not much is being done to acquire them as customers or help them reach their full financial potential. Furthermore, as president and lead strategist of Culturally Connected Communications, Pam Jones notes, “We have noticed expanding middle- and higher-income segments of African-American consumers that have become key components of growth in financial services. Marketers shouldn’t underestimate the momentum that these consumers bring to the financial services sector.”
The impact of Hispanic population growth on the U.S. economic landscape is undeniable. Hispanics are a dominant driving force behind technology adoption, housing demand, labor force growth, entrepreneurial pursuits and more. Case in point: Hispanics are outspending non-Hispanics in fashion, cosmetics, mobile phones, gaming, diapers, and increasingly, in housing. In fact, within the next five years, Hispanics will represent half of all new homeowners in the U.S.
Latinos are passionate about homeownership: They are more likely than non-Hispanics to prefer owning a home and place greater emphasis on what it means to be a homeowner. This was demonstrated in the 2013 Fannie Mae study that found Latinos place greater emphasis on home ownership than the rest of the population. So what does this mean for businesses? The millions of Hispanics moving to new homes every year, and forming new households, are eager to set-up and fix-up—and they spend a lot of money doing so. If companies and businesses ignore new movers, they will neglect a critically important acquisition segment.
The bottom line for marketers who provide products and services for homeowners—especially Latino homeowners—is this: Homeownership begets the desire for new furniture, appliances, and electronics; it creates the need for new Internet and TV service providers; and fuels the search to find the closest Latino restaurants and markets. Pursuant of a new kind of American dream, Hispanics will continue to shape this country as they seek to establish their rightful place as homeowners, consumers, and influencers.
While the African-American population continues to face daunting economic challenges, key social and economic indicators point to a significant increase in the number of middle- and higher-income African-Americans over the past ten years. During this period, the number of African-American households with an income of $100,000 or more rose 83%, while the number of African-Americans employed in management and professional occupations grew from 3.8 million to 4.8 million, an increase of 26%.
Furthermore, between 2006 and 2016, the number of African-Americans with checking accounts increased 30%, while the number of other consumers with checking accounts essentially stayed the same. Growth in the number of those using various financial services was also higher for African-Americans in the case of savings accounts (29% vs. 20%), credit cards (22% vs. 5%) and debit cards (85% vs. 62%). Their high level of economic growth and engagement in financial services suggest that middle- and higher-income African-American consumers will remain influencers to watch. Indeed, multicultural movers and bankers have ushered in a new wave of opportunities for not only themselves but also marketers.