The Latino consumer is increasingly critical customers, and as they more widely assimilate into the broader culture and influential consumer trends, the way businesses reach them may need to evolve.
That’s one of the takeaways from the latest report on the U.S. Latino economy, which continues to expand rapidly–two and a half times faster than the non-Latino equivalent. Last year, the U.S. Latino economy grew about 13 percent, from $2.8 trillion to $3.2 trillion, according to the report from the Latino Donor Collaborative, a nonprofit dedicated to advancing perceptions of Latinos. This far outstrips GDP growth and makes U.S. Latinos the world’s fifth-largest economy.
Their purchasing power is already evident: Purchases “by and on behalf of Latinos” grew 4 percent from 2011 to 2021, compared with 1.9 percent for non-Latinos. And with a significantly younger population distribution–the most common age range for Latinos being 10 to 14 years old compared with 60 to 64 years among non-Latinos–that influence is only expected to grow. The U.S. Hispanic population reached 63.7 million in 2022.
Thus, business owners must “stay ahead of these substantial changes to ensure they remain relevant and able to meet the needs of their evolving customer base,” the report advises. And that means paying attention to where and how these consumers are now spending as well as recent cultural trends.
Here’s what experts say business owners should consider as they strive to reach these consumers, authentically and strategically.
Research the audience
Business leaders must first understand the trends to develop a strategic approach for reaching Latino consumers. For instance, Latino consumers tend to be more price-conscious than the general U.S. population, and 35 percent actively research the best promotions for purchases, compared with 29 percent of all consumers, according to research from McKinsey & Company.
Recognize the nuances
Understanding trends is important, but leaders must also recognize that Latinos are not a monolithic group, experts say. Most companies will declare, “Here’s my diversity strategy,” Trujillo says, but without considering the nuances of each subsegment, companies will overlook the distinct purchasing characteristics of each group. Consumers’ ages, countries of origin, and first-generation status can impact their purchasing behaviors.
Account for assimilation
While business owners should consider the Latino consumer’s cultural roots, they should also remember that many Latinos have assimilated. Prado recalls seeing brands trying to appeal to Latinos by simply translating their ads into Spanish. Yet more than 70 percent of Hispanics in the U.S. are proficient in English, according to the Pew Research Center. Meanwhile, the number of Hispanics speaking Spanish at home is declining, from 78 percent in 2000 to 68 percent in 2022.
“[Companies] will be trying to reach Gen-Z, Millennial Latinos, but then they’re communicating with them in a way that the data shows is not their primary way of communicating,” Prado says.
Indeed, the Spanish language can be a bit of a “red herring” for businesses, Trujillo says. With more Latino children being born in the U.S., parents will find themselves adopting the lifestyle that their children are exposed to, he adds, and businesses should therefore “talk to Latinos as though they’re mainstream.”
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