Wednesday, October 2, 2013 | Edited by Daniel Moores
||Nielsen Report: Marketers Should Make African-American Consumers Bigger Priority
A new report by Nielsen stresses to marketers the importance of reaching the 43 million U.S. African-American consumers and offers insight into their media consumption and buying habits that can help aid in tapping into their $1 trillion annual spending.
The report strongly suggests that African-American consumers are more aggressive users of media than any other population group, including watching more television and reading more financial magazines. They are also major online website and social media users and spend more time shopping than other ethnic groups.
Yet, of the $75 billion spent annually on TV, magazine, radio and online advertising in the U.S., only $2.2 billion is spent with media focused on African-American audiences.
The report, titled Resilient, Receptive and Relevant -- The African-American Consumer, states, "Black businesses, agencies and media continue to wrestle with this disparity as it is not reflective of the overall, high-consumption patterns and behavioral trends of the Black consumer."
This is the third report Nielsen has put out in collaboration with the National Newspaper Publishers Association, the 73-year-old federation of close to 200 Black community newspapers from around the country. The NNPA is also known as the Black Press of America.
As a demo group, the African-American population averages 35 years of age with more than half (53%) being under 35. And African-American women are slightly more dominant in number than men, with adult African-American women making up 54% of the Adult Black population and 52% of employed Blacks being female.
"While African-American men continue to dominate as the financial providers for Black households, companies seeking to connect with African-American consumers may want to pay close attention to women," the report states.
Women An Increasingly Vital Force
Women control 43% of the annual spending power for the Black population and 29% of Black women are tabbed the head of their household, compared to 20% for the overall population. Women also own the majority of Black businesses.
"While ongoing attention should be paid to Black men as consumers, Black women are an increasingly vital force within the Black community, given their gains in education, occupational status and business ownership," the report states. "Black women tend to make the majority of the purchasing decisions in their households and may be receptive to marketing messages that acknowledge the dual roles many women play as mothers and working professionals."
The report also points out that African-Americans in large numbers are easy to reach because they are concentrated in large metropolitan cities around the country and also in key Southern cities such as Raleigh, N.C., Memphis, Tenn., Jackson, Miss., and Columbia, S.C.
New York has the largest African-American population with 3.8 million, followed by Atlanta (2.1 million), Chicago (1.74 million), Washington, D.C. (1.67 million), Philadelphia (1.63 million), Houston (1.18 million), Dallas (1.15 million), Detroit (1.08 million) and Miami/Ft. Lauderdale (1.04 million).
The report also finds that Black households shop more frequently than the total market figure, but spend an average of $8 less per trip -- $39 compared to $47.
A greater percentage of upper income Blacks, who earn $100,000 annually or higher, shop at Whole Foods compared to non-Black consumers (16% vs. 11%).
Also, African-American consumers place a high emphasis on the grooming and beauty categories, particularly Ethnic hair and beauty aids. "The beauty supply store channel, in particular, offers consumer packaged goods retailers and manufacturers an opportunity to increase market share as Black shopper penetration and annual spending with this channel both increase with higher income," the report states.
Purchase Preferences -- And Under-Indexing
Other categories heavily purchased by African-Americans include meats and seafood, dry vegetables and grain, refrigerated juices and drinks, spices, women's fragrances and detergents.
Conversely, the report states, African-Americans under-index in buying categories such as breakfast foods, cheese, wine, milk, coffee, desserts and pet care products.
Favorite fast-food restaurants of African-Americans in order are McDonald's, Burger King, Subway, KFC, Wendy's, Taco Bell, Popeye's, Chick-Fil-A, Pizza Hut and Dunkin' Donuts.
The report found that when it comes to media, African-Americans are huge TV watchers. Blacks watch 37% more TV each day than any other group, spending seven hours and 17 minutes per day watching TV, compared to five hours and 18 minutes of viewing for the total market. And Black women, especially in the 18-49 demo, are heavier users than their male counterparts.
The five networks most watched by Blacks in order are: BET, VH1, TV One, Bounce TV and Centric. The 2013 BET Awards delivered an African-American audience 74% higher than the Grammy Awards and nearly three times greater than the Oscar telecast.
Love & Hip Hop Atlanta Rates Highest
The most-watched primetime shows by Blacks in order are: Love & Hip Hop Atlanta on VH1, Scandal (ABC), Real Husbands of Hollywood (BET), Real Housewives of Atlanta (Bravo), T.I. and Tiny (VH1), The Game (BET), Love & Hip Hop (VH1), Hit the Floor (VH1), American Idol (Fox) and Black Ink Crew (VH1).
The report finds African-Americans spent 44% more time each month on education and career websites and 20% more time on family and lifestyle sites than total market consumers. They also spent 21% more time on entertainment sites.
The most used search engine by African-Americans is Google Search with more than 15 million unique visitors per month. Next in order are Yahoo (7.5 million), Bing (6.6 million), Ask.com (6.3 million) and Google Image (5 million).
Facebook is the top social media site visited by African-Americans across all age demos.
Among African-Americans, 77% own smartphones and the apps in which they spent the most time using are (in order) Instagram, Facebook, Twitter, Pandora Radio, eBay Mobile, Facebook Messenger, Yahoo Email, Gmail, YouTube, Google Play, Apple Maps and Google Maps.
Blacks read financial magazines 28% more than other consumers and spend an average of 87 minutes online looking at websites related to finance and investment, which is 12% higher than the overall market, the report states. And Blacks are more likely to read Forbes and Fortune magazines than the total market.
The report offers this advice to marketers:
"Companies mistakenly believe because there are no language barriers, that a general market one-size-fits-all strategy is an effective way to reach African-Americans. Just the opposite is true, It is not language that distinguishes connectivity with African-Americans, but a brand's ability to understand the Black experience and cultural nuances that resonate with Blacks who are more receptive to messages when they feel valued."
So which companies are targeting Black consumers?
Procter & Gamble was the top spender with media focused on Black audiences in 2012, spending $75 million on TV, magazine, Internet and radio advertising. Other top spenders included L'Oreal ($52 million); McDonald's ($38 million); Unilever ($31 million); the U.S. Government ($29 million); Berkshire Hathaway ($28 million); Comcast ($28 million); Hershey ($27 million); Pepsi Co. ($25 million); Walmart ($24 million); Fiat ($24 million); AT&T ($22 million); Verizon ($22 million); Toyota ($21 million); General Motors ($21 million); Sony Corp. ($20 million); Johnson & Johnson ($20 million); Ford ($19 million); Allstate ($19 million); and National Amusements ($19 million).
(Source: Broadcasting & Cable, 09/24/13)
To access the full report, please visit Nielsen's website.
||Study Reveals Hispanic Consumers Are Crucial to Adult Beverage Industry
At nearly 33 million, U.S. Hispanics of legal drinking age (LDA) are important adult beverage consumers, and their influence will expand rapidly.
By 2015, Hispanics will account for 15 percent of the total U.S. LDA population. By 2045, one-quarter of the U.S. LDA population will be Hispanic, according to the Special Trends in Adult Beverage (TAB) Report: Hispanic Consumer Insights, released by Technomic.
"Hispanics are an extremely important demographic group for the adult beverage industry, and many of their preferences and purchase habits are different from the general population," observed Donna Hood Crecca, Senior Director at Technomic. "Currently, the LDA Hispanic population skews young and male, and strongly favors beer, tequila and red wine.
"Similar to the general population, they value variety and competitive pricing when purchasing adult beverages, but they buy them in a broader range of retail outlets," she noted. "They enjoy adult beverages frequently, but consume more drinks and spend more per occasion than the general population, whether at a restaurant or bar or at home."
To help adult beverage suppliers, marketers and operators better anticipate and meet the evolving needs of Hispanic consumers, Technomic added the new report to its Trends in Adult Beverage (TAB) series. Interesting findings include:
(Source: Technomic, 09/18/13)
- Latinos most frequently buy adult beverages at liquor and wine stores (48 percent). However, they are more likely than the overall population to purchase at other types of retail outlets such as convenience stores (19 percent vs. 14 percent).
- Hispanics are more likely than the broader population to have purchased adult beverages online (17 percent vs. 11 percent) in the past year.
- Casual-dining restaurants are frequented by Hispanics, but among them, English-dominant (36 percent) and bilingual (38 percent) consumers are more likely to order adult beverages during their visit than Spanish-dominant (27 percent) consumers, and are also more likely to try new adult beverages in on-premise locations.
- Beer -- particularly imported beer -- is the top adult beverage choice for Hispanic consumers. Mexican beer is more preferred by Hispanics (85 percent) than general consumers (70 percent) when ordering drinks in restaurants and bars.
- Hispanics overindex on red wine varieties in restaurants and bars compared with the general population, particularly red blends (41 percent vs. 28 percent).
||Millennial Shoppers: Big on Browsing, Not Splurging
The millennial generation is easily the most studied demographic since their parents, the Baby Boomers. This is not only because Americans are always fascinated by youth culture, and that millennials are growing up during a period when technology and economic forces are changing rapidly, but also because -- to put it bluntly -- Gen Y represents big bucks.
Roughly 80 million American millennials spend $600 billion annually, and by 2020, it's expected this generation's spending will hit $1.4 trillion per year, or about 30% of all retail sales.
No wonder retailers, marketers, manufacturers, and all kinds of consultants have been trying so desperately over the years to get inside their heads and find out what it is that interests them -- and what they’ll pay for.
Recent studies from The NPD Group, Accenture, and the Shullman Research Center offer some insight as to what drives millennial consumers. In a press release accompanying the NPD report, Marshal Cohen, the group's chief industry analyst, called millennials "the most elusive generation and the most challenging to keep engaged."
While some of the findings in the studies from NPD and others may be surprising, and demonstrate important cultural differences between how millennials and other age groups spend, simple economic circumstances can be credited for much of what sets young consumers apart. For instance, why is it that millennials go shopping quite frequently, but purchase at a significantly lower rate than older consumers? "Because they are the most selective as well as the most economically challenged," Cohen put it simply.
Here are a few more findings about millennial consumers gathered from the studies:
Millennials really love to shop. Indeed, in the Shullman study, 58% of consumers ages 18 to 33 put themselves in the "love to shop" category, compared to 40% of adults overall. And while the data indicates that millennials are more likely to make online purchases than older consumers, young shoppers still do enjoy going to stores. According to the NPD report, 53% of millennials shop in-store at least once a week, and 81% of their dollars are spent in brick-and-mortar stores. "Interviews conducted recently at one of America's largest shopping malls confirmed our survey findings that many members of the digital generation actually prefer visiting stores to shopping online," the Accenture report states.
Millennials purchase less frequently. Young consumers may be out at stores in large numbers, but they're not necessarily buying anything. According to the NPD study, the conversion rate -- percentage of consumers who actually make a purchase -- is lowest among millennials. Whereas seniors make purchases 72% of the time, millenials pull the trigger only on 57% of their shopping (more like browsing) ventures. Gen X and Baby Boomers fall in the middle, with conversion rates of 66% and 69%, respectively.
Again, part of why millennials are so different than older consumers may come down to simple economics: Young consumers, who are either just starting off in careers or are struggling to find work, are likely to have more time than money on their hands. So they have ample opportunity to shop around and check things out before making purchases -- or just deciding that they're not in a good enough financial situation to buy.
Even well-off millennials aren't big splurgers. The Shellman study, which focused on young consumers with household incomes of at least $75,000 annually, found that for 53% of higher-income millennials, their last "luxury" purchase cost under $250. What's more, these consumers were fairly likely to wait and save up before buying anything in the luxury category: 30% reported saving up specifically for the purchase (compared to 16% of adults overall), and only 10% of millennials put the purchase on a credit card (compared to 19% of adults overall).
They're big fans of convenience and cheap prices. It's easy to see economic forces at work yet again in light of the NPD study's findings that "value oriented retailers within the dollar store, second hand, drug store, and off-price channels" are especially appealing to millennial shoppers. Another study, "Millennial Shoppers: Tapping into the Next Growth Segment," released last summer by SymphonyIRI, indicated that millennials tend to be driven more by cheap prices than loyalty to any particular brands, and that they like shopping in drugstore chains like CVS and Walgreens more than other consumer demographics.
The SymphonyIRI survey also showed that millennials have been resorting to classic DIY strategies in order to spend less money, sometimes -- in the case of health care -- to disturbing degrees:
This group is 46 percent more likely to use at-home beauty treatments to save money, and 31 percent more likely to cook from scratch or with limited convenience foods to save money. They are also 18 percent more likely to "self-treat" where possible to avoid spending money on doctor's visits.
(Source: Time, 09/11/13)
Daily Sales Tip: Don't Limit Your Choices
I understand that we're all too busy as it is, and it can be tempting to try to shortcut the sales rep hiring process. Resist the urge.
Many business owners try to streamline hiring by focusing on one or two candidates. A better tactic is to start with 5 or even 10 candidates, knowing that you'll lose a couple at each step of the hiring process. That way, you can compare candidates against each other, rather than just an ideal you have in your mind.
A candidate pool will help you keep the right perspective throughout the interview process.
Source: Sales consultant/speaker Kendra Lee