Ho, Ho, Ho! Where’d The Money Go?: Hispanics and Holiday Spending Trends for 2017
MÁS EN ESTA SECCIÓN
Santa, Los Reyes Magos, and El Niño Jesús all have some competition this year.
Hispanics, one of the fastest growing demographic cohorts in The United States, barge into department stores and boost online traffic on Amazon with over a trillion dollars in buying power (Nielsen reports the figure at $1.4 trillion, to be exact).
As Accenture pointed out in their latest analytics report on Latinos and media representation:
“A country of this size would be the world’s 14th largest economy ahead of Spain and approximately equal to the gross domestic product (GDP) of the Russian Federation or Australia.”
Hispanic buying power is expected to reach $1.8 trillion dollars by 2021.
With a steadily and rapidly population growth that has been forecasted to go from a current 18% of the U.S. population (57 million people) to 36% by 2050, it looks like Hispanic purchasing power won’t be dwindling anytime soon.
And as those numbers increase, more advertisers are becoming aware of this vigorously expanding Hispanic influence on the economy.
They reel them in just when they're at their most vulnerable, sensitive, and attuned to their families: the holidays.
As a whole, The National Retail Federation estimated that U.S. consumers would be spending about $967 billion for "the holidays"- defined as the time between Thanksgiving and ending with Christmas -which translates to an uptick of about 6% compared with last year.
ThinkNow Research, a Hispanic-focused information firm, estimated that Hispanics would be planning to spend 33% more this holiday season than they did last year (and this figure includes spending for Three Kings Day).
However, that same ThinkNow survey found that the percentage of purchases made in-store versus online drastically dropped for 2017, averaging to a 6% decrease. NPD Group reported an 11% decrease.
Despite what stereotypes have led us to believe about millennials and the rise of Internet dependence, retail sales still take the lead for shopping sprees.
In Deloitte's 2017 Holiday Survey, it was noted that "brick and mortar" stores (from the behemoth Macy's in King of Prussia to a mom-and-pop shop in Fishtown), will collectively rake in almost a trillion dollars in sales from November to January 2018. Compared to the $110 billion predicted for online holiday sales, it seems safe to assume that the retail experience isn't going anywhere for most Americans.
So, why are Hispanics lagging in this consumer trend?
Multiple data analysts and consultants have identified two driving forces leading Hispanics to choose PayPal on their tablets over swiping Wells Fargo debit cards at Uniqlo.
One is more jolly and hopeful than the other, so for the sake of the holidays, let's start with the naughty and get it out of the way:
The President's spew of anti-Mexican, anti-Hispanic, anti-immigrant, "anti-Other" rhetoric on the campaign trail and during press conferences has fearful consumers relying more on their smartphones and less on shopping carts, reported The Financial Times in May, Quartz in July, and later Reuters in August.
The “psychoeconomic” phenomena has been deemed newsworthy for its way of tangibly connecting an Administration’s overt crackdown on and belittlement of Hispanics, with the way in which a rise of Hispanophobia can cause strife and worry over financial safety nets and going anywhere but home or work to purchase the utmost essentials.
This change in buyer behavior is starkest in border towns, where deportation worries loom on a not-so-distant horizon, but it is still ever-present and foreboding for retailers nationwide, who understand that Hispanics are an unstoppable driving force in the U.S. economy. Biran Cornell, Chief Executive of Target, voiced concerns about the sudden loss of in-person Hispanic customers since Inauguration Day.
Anxieties over racial profiling and Customs Enforcement raids are not only limited to the holidays, but this time of year can make anyone particularly emotional and prone to loneliness, especially an ethnic group that is known for its reliance on social connectivity.
Here's the flip-side, for the suppliers and the demanders: Hispanics are dominating the digital space.
Technology enables and empowers all in democracies to have a voice and a platform to virtually assemble. Nevertheless, this potential for engagement is acutely pronounced for the marginalized, for they feel safer behind the screen than "IRL".
Obviously, millions of hardworking and tax-paying Americans hiding from law enforcement in their homes- but being able to access Hulu and JCPenney from their places of refuge and self-imposed prisons! -isn’t exactly utopic progress. But, being able to remain isolated while not feeling alone is, strangely, a gift from the 21st century.
Hispanics have caught onto the benefits of being plugged in.
A Google blog focused on dissecting and explaining the broader picture from the charts and figures in Analytics, thinkwithgoogle, published in both 2014 and 2015 that Hispanics are “underserved” and “untapped” because they are a “digitally savvy group” with “a high rate of ownership of smartphones”.
The Google Consumer Surveys conducted during these two years discerned that:
“Hispanics are 1.5x more likely to buy mobile apps and digital media than non-Hispanics.”
“Hispanics are 17% more likely than non-Hispanics to access the web more through their phone than through a computer.”
Senior level marketers (as determined by Google) have predicted “11-25% of their company’s growth [will be] coming from this demographic in the next three to five years.”
“66% of U.S. Hispanics say they pay attention to online ads- almost 20 percentage points more than the general online population. Among 93% of them take action- whether that’s performing a search, visiting a company’s website, or making a purchase.”
“When an ad includes aspects of Hispanic culture, regardless of language, 88% pay attention, and 41% feel more favorable about a brand that aims to be culturally relevant.”
These findings were further expounded and corroborated upon by Viant, a marketing technology company, which observed that 25% of Hispanics spend more time overall on their phones than the general U.S. population- and the general U.S. population already spends up to five hours swiping and checking notifications every day!
The reasons for amplified tech usage amongst undocumented Hispanics has been theorized, but what of those who are legally in the country, or those who were already born in the United States but identify as Latino/a/x?
Marla Skiko, an expert in consulting marketers on Hispanics, has noted that this group views keeping up with the latest and trendiest machinery as “social currency”, while her contemporaries have gotten the impression that wanting to stay in the loop with the lives of family and friends in other countries or those who are scattered across the United States due to immigration could be what draws Hispanics in.
Most Hispanics don’t even own desktop computers or laptops and rely heavily on their smartphones for their social media, search engine, and shopping needs.
Accenture emphasized a powerful link between underrepresentation of Latinos in U.S. media (1-2% of media roles go to Latinos, even though they account for a significant portion of the nation’s population), which makes this demographic highly susceptible to craving and sharing culturally engaging content. Hence the popularity of Latino YouTubers, Viners, and Buzzfeeders.
Comfort with gadgets and gizmos also alters the way that Hispanics are responding to targeted products and commercials and, as a result, purchasing (a lot!) more than non-Hispanics. And because an estimated 57.4% of Hispanics are truly bilingual, advertisers have more opportunities for creativity and material.
Hispanic purchasing power in The United States, gliding into and upwards the “trillion” mark, can be attributed to genius manipulation from marketers and media makers who have caught onto the economic potential of this demographic, especially during the holidays, which are of major importance to this group which tends to be characterized as family-oriented.
If you consider yourself a Hispanic (or a Latino), take notice of the amount of automatically queued videos and suggested products that are specifically aimed at your cultural identity.
This can be somewhat dangerous for Hispanics, which as the numbers previously mentioned proved, are easily swayed by what they see online.
“You’re in an environment that’s been optimized to grab your attention and a share of your wallet. We talk about how you lose minutes and hours online, but we need to start thinking about how we lose money too.”
How can Hispanics budget and wisely consume targeted information online without making impulsive shopping decisions?
CNBC advises that you should stop “ignoring your bills” and pretend that “credit cards [are] like free money.”
I suggest a free budgeting app called Mint, which is free to download and to use on your desktop and mobile devices.
CNBC also advised in the same article that you should “stop making it hard to save” and to “stop complaining about your paycheck”, and for that, I suggest going to gratuitous financial literacy workshops offered by Clarifi, and stopping by Ask A Manager for hilarious workplace blunders and tips on how to negotiate that raise (or say goodbye to an employer that doesn’t know your worth).