As one of the most influential consumer demographics in the United States, the Latine community continues to raise the bar for companies and brands nationwide.
Making up nearly one-fifth of the population, the Selig Center for Economic Growth found that this group accounted for 11.1% of buying power in the United States in 2020 compared to what used to make up only five percent in 1990. This means Latines made up $1.9 trillion in spending power, making us one of the country’s single largest and highest-spending minority groups. What’s most incredible is that this number is expected to grow by $400 billion by 2023.
This community’s influence on the market is undoubtedly on most marketing departments’ radars. The deeper the consumption behavior of this demographic is looked at, the more you realize culture and values are intrinsically woven into the decisions they make daily. While no group is monolithic and the nuances in the Latine community are important to consider, studies show that the overarching themes in these markets are too predominant to ignore.
60% of Hispanic people feel that authenticity is one of the qualities they find most appealing in a brand. Similarly, they seek companies that encourage cultural affinity and stick to what they can relate to. They think twice about where their dollar goes, as evidenced by a report by Edelman Trust Barometer. It showed that 54% of Latines believe that their decision on what brands they choose to support can influence societal issues than voting.
Considering the power in these statistics and the behaviors that distinguish these populations from any other, the accessibility of online shopping and marketing adds an interesting layer here. Social media and online marketing are so impactful that 43% of Hispanics say they’re more likely to find new brands and products through social media, while 39% find them through commercials.
The way we shop has evolved, especially as businesses had to take on the challenge of shifting to digital marketplaces to survive during the pandemic. With the endless array and variety of stores at our fingertips, purchasing things at the tap of a button has become easier and more accessible than ever.
Online shopping has become a norm and a necessity, especially as people grow more accustomed to getting their essentials (and not-so-essentials) from the comfort of their homes. Along with this convenience comes the freedom of choice. You can research the best deals, the fastest shipping, the best alternatives and weigh the pros and cons in less than ten minutes. From big purchases to weekly groceries, businesses are faced with more competition than ever.
After conducting surveys to examine consumer behavior, PwC found that these changes are historic and dramatic. Moreover, the report found that these behaviors were likely to remain well after the pandemic; the research found that 73% of surveyed consumers who had shifted to digital purchases intended to continue.
Taking a closer look
It’s no doubt that with emerging technologies also comes a deep introspection on our purchasing behaviors and where our hard-earned dollar goes–both from a consumer and a business standpoint. Because this rings especially true within the Latine community, there is a new pressure on businesses to have their messages clear and a newfound sense of responsibility to be more conscious of what they’re offering and how they are offering it.
Who is driving this change, though? While many different factors contribute to the success and increased usage of online shopping, research shows that those who utilize online shopping the most are Gen Z and Millennials.
When we take a step back to look at a specific population within this demographic, it’s evident that these generational groups have played a significant role in influencing general consumer choices. On the one hand, the accessibility to buy in any format or channel means they are a mighty group when it comes to establishing trends. While there are distinguishable differences between the attitudes of Gen Z’ers and millennials, they tend to demonstrate common threads in their behaviors. According to a report from McKinsey & Company, “America’s Gen Zers are accelerating a number of trends that millennials started, such as social media engagement and the desire for authenticity.”
This generation tends to evaluate their consumption decisions more analytically and pragmatically. They have demonstrated a heightened sense of awareness which informs their overall choices as buyers. Their choices don’t depend as much on brand loyalty as they do on a company’s commitment to authenticity, uniqueness, and transparency, especially regarding social responsibility, environmental sustainability, and diversity efforts.
When we put these motivations into perspective, we can see a direct relationship between Gen Z and millennials’ habits and how they influence other generations. For example, what started as a platform mainly utilized by people under 20 has become a growing outlet for older users to find community and companies to promote their products or services. TikTok’s instant reach and overnight impact have transformed the platform into a goldmine for brands and companies on a global scale. With products being sold out in less than 24 hours with the help of viral reviews where users rave about the benefits, many see a massive opportunity to expand the use of these audiences and meet their goals as a result.
Another example of the impact Gen Z and Millennial generations are having is the multigenerational relationship that is so predominant in the Latine community. Older generations like Gen X’ers are heavily influenced by word-of-mouth, community, and those they trust, especially those that are Latine. According to an associate partner at McKinsey, “If you look at the influence behaviors of Gen X, they’re much more likely to be influenced by the people sitting at the dinner table. So as they listen to their kids talk to them, they’re being influenced about what they want to buy for themselves.”
Ultimately, the data is clear: the Latine community has an incredible impact on the consumer market, especially the younger generations that make up this population. Gen Z and millennials are transforming and shaping behaviors as they become influencers within their own families and communities. As they continue to show their abuelitas and their tíos the best things available on the market, brands will have to keep up with what makes this demographic so unique and the things they value the most.