Just when you thought you had cracked the nut on the Hispanic Consumer, a new nut has just knocked you on your head. As everyone knows, America’s demographics are shifting, driven in large part by explosive growth in the Hispanic population. According to the Pew Hispanic Center, the Hispanic population in the United States grew from 35 million in 2000 to 52 million in 2011; a whopping 48% growth rate. By 2060 that number is expected to more than double to 129 million, which will make nearly one in three US residents Hispanic, according to the Census Bureau. If the population numbers alone don’t peak a marketer’s interest, surely the estimated $1.5 trillion (that’s trillion with a “t”) in buying power by 2015 will. That $1.5 trillion in buying power would make the US Hispanic market the 14th largest economy in the world if it were its own country. Yet, for years, this consumer segment has been held at arm’s length or worse, ignored by marketers altogether. Perhaps they are confident that their strength in the “general market” will carry them, or are foolish enough not to believe in the importance of the Hispanic consumer to their bottom line. Savvier brands, largely consumer packaged goods companies, know better and have invested a lot in understanding these consumers; others continue to wander aimlessly in a sea of misconceptions and inaccuracies. Many brands have long held beliefs that are simply no longer true; chief among those is a view of Hispanics as largely homogenous, unacculturated, Spanish speaking consumers. Unfortunately for those folks, one sobering, yet immensely important, fact evades them: more and more, the Hispanic consumer is looking and sounding less like the Hispanic consumer of yesteryear’s marketers. Despite what the prevalence of immigration related headlines today might have you believe, the growth in the Hispanic population is not totally a recent occurrence. Latinos have long had a presence in the United States even before the well documented immigration booms of the 80’s, 90’s and 2000’s which led to immense growth in the amount of second, third, fourth and fifth generation Latinos (ever heard of the saying, “the border crossed us, we didn’t cross the border?”). In fact, the past decade’s growth has less to do with immigration than you might expect. The same Pew Hispanic Center study which showed the impressive overall growth of the Hispanic population over the past decade, also notes a 57% growth rate in the native born population over the same period of time. Today, 64% of all Hispanics in the United States were born here. That’s right folks; the growth in the Hispanic population is driven by US-born Latinos, most of whom speak English as their primary language and end up straddling two very distinctive cultural lines.
What evades most marketers is that these consumers are unique: not quite the same behaviorally or attitudinally as their parents or grandparents, but not like their “general market” counterparts either. They form an ever-growing faction of bicultural Latinos. For a crash course in what it mean to be bicultural, check out this clip from the timeless classic, “Selena,” and let Edward James Olmos tell you in his own words (spoiler alert: we have to be more American than Americans and more Latino than Latinos. It’s exhausting!). One study by Horowitz Associates places the percentage of Hispanics who self-identify as a mix of both Latino and American at 39%, a close second to those who identify as fully Latino at 43% (those who say they are fully American lag far behind at 18%). As such, Latinos have largely exhibited a non-traditional acculturation trajectory where full acculturation is no longer the norm or to be expected. In fact, evidence of retro-acculturation, where previously acculturated segments of Latinos work to regain traces of their Hispanic culture, is well documented (as was the case with Selena who was a Mexican-American woman who learned to speak Spanish later in life). Clearly, the realities of Latino acculturation coupled with the projected growth of the population have significant implications that will one day redefine the “general market” as we know it, requiring long term shifts in brand strategies for many.
But before putting the cart in front of the horse, brands must consider what they can do here and now. Tapping into the burgeoning potential of the US Hispanic market requires a concerted effort to understand the consumer beyond language and recognize differences in behaviors, attitudes and beliefs. The most impactful Hispanic strategies incorporate a comprehensive approach to connect with both unacculturated and bicultural consumers. At times, the approach will include similar elements for both, while at others, it will be necessary to target a specific segment. For instance, special media buys during award shows such “Premios Juventud” on Univision have the potential to reach both consumer segments who tune-in in droves to watch the show. However, Univision does not always appeal to the bicultural segment. 45% of Latinos overall watch TV mostly in English; that number jumps to 69% by the second generation and 83% among the third generation and higher. For these consumers, culturally relevant (and I can’t stress culturally relevant enough!) communication on English TV, or bicultural TV such as Mun2 or MTV Tr3s, is likely to be more effective.
Certainly, understanding the Hispanic consumer can be complex and perhaps daunting for some, but it is an unavoidable bridge to cross for most brands. For many, the key will be to do away with long held beliefs. A small step for sure, but it all begins con un granito de arena (with a grain of sand).
Elvis is a Project Manager with CMB’s Financial Services, Insurance and Healthcare Practice and the company’s bicultural Chapin (Guatemalan-American) in residence. He is also founder and president of Casa Guatemala, an educational non-profit organization serving the Latino youth of Waltham, MA.