2010 Trend Predictions for Affluent Ethnic Consumers
Posted On June 28, 2023
As the fiscal year comes to a close this June, luxury marketers are beginning to think of new ways to reach new consumers. Given the myriad of changes in the marketing and media landscape, there is still a highly-qualified consumer segment that is untapped and easy to reach. These consumers are not your usual suspects. And the first luxury provider to execute a strong, non-traditional marketing strategy will attract their attention.
Who are these consumers? Here are some answers:
1. Meet the Royaltons. Multicultural and mass marketers often refer to ethnic consumers as “minorities.” However, within this large demographic is the growing body of affluent ethnic consumers, and they need to be viewed quite differently. In their 2008 strategic planning sessions, luxury goods purveyors should place special emphasis on this multi-ethnic group, known as “Royaltons.” Royaltons is a term derived from the word “royalty”, meaning “of or relating to a monarch; a person or thing occupying a dominant position”.
This understated but highly influential consumer segment offers a wealth of opportunities and increased sales for luxury providers. It is estimated that less than two percent of marketing budgets are devoted to attracting this target audience because luxury brands target the super-rich consumer or the more obviously wealthy consumer.
For example, Hispanics represent our largest minority, now numbering about 42 million. Of those, six percent earn more than $100,000. However, Merrill Lynch estimates that this relatively small segment of wealthy Hispanics will spend $300 billion this year, representing almost two-thirds of the total purchasing power of Hispanics. Hispanics account for 5 to 10 percent of elite college enrollments; some 40,000 Hispanics are physicians.
America’s most prosperous consumer group: Asian Americans, who now number about 13 million. The number of Asian-American families with incomes of more than $200,000 is about the same (156,000) as Hispanic and African-American families combined, according to Packaged Facts. This group represents between 10 and 25 percent of elite college enrollments. Within this group, Asian Indians are the wealthiest and fastest growing ethnic group. Almost 40 percent of all Indians have a professional degree.
A less familiar ethnic group, Russian-Americans, have arrived in a rage: some four million people. They are twice as likely to have graduated from college as the general US population and 50 percent more likely to report an income of $75,000 or more. They consume luxury items at a fast pace.
For luxury marketers in 2008 to better allocate their money to the Royaltons, it is important that they take an aggressively proactive “portfolio stance” to research, analyze and strategize across the landscape of opportunities. This should include a consumer model, marketing audit, proprietary research, and a well-crafted strategic plan that leverages existing human capital or identifies new sources of business intelligence.
We anticipate this as the biggest effort luxury marketers can tackle in 2008. Don’t expect overnight miracles.
2. The New Mass Marketing Have you heard the news? Mass marketing is out. Target marketing is all the rage.
Let’s take a specific set of target groups, Royaltons (rich ethnic consumers), and build a new mass marketing program. Is that how it works.
You’ve determined that you want to target a group of royals, including African Americans, Asian Americans, Hispanic Americans, and Russian Americans. Each will have its own concentric circle that includes both niche and grassroots efforts: sponsorships, influencer programs, marketing partnerships, online engagements, retail events/promotions, charity support, and more. These individual concentric circles will work together to build critical mass which in turn translates into the new mass marketing. And if you were wondering what resonates with this group, in general, try high-touch engagements that allow consumers to interact with the brand. Traditional advertising is a waste of your marketing dollars.
Targeting smaller groups of influencers profitably may require more time and effort up front, but the rewards of building a plan for the future, dabbling in each “community,” and developing a meaningful and authentic dialogue with this consumer, will be priceless in the end.
Our recommendation: Don’t let your lack of research or awareness of diversity hinder your brand growth. Hire a well-rounded diversity expert to act as your chief integration officer. This expert will design a methodology for your diversity initiative that includes standard operating procedure guidelines.
3. Women and Wine With all the talk in recent years about marketing to the largest group of buying consumers and influencers (women), we predict that wine marketers will eventually put more effort into attract wealthy female consumers. After all, according to a 2006 Gallup poll, women make 55% of wine purchases in America. According to another survey, nearly a quarter of women’s wine purchases exceed $100.
Evidence suggests that wine marketers are beginning to recognize the trend, with wine clubs, websites and ladies’ nights in bars all designed to appeal to female drinkers. There’s a low-calorie, low-alcohol wine, White Lie Early Season chardonnay, with an alcohol content of 9.8 percent, compared to 13 percent and 14 percent found in some vintages. Displays of rosé and white wines in bottles bearing such flowery names as Seduction have been derided by website womenwine.com as the Virginia Slims of the wine trade. Wine marketers need to understand the most contemporary, wealthy, and successful women. They are not looking for fancy wine coolers. Unless you are marketing a wine that benefits the Susan G. Komen Foundation, it is not advisable to wear pink or anything that speaks to the “child” within a woman.
Aggressive marketers with leadership cultures will customize programs that also target Royaltons through member-based organizations and associations. This is a great niche that is currently not being filled by any wine marketer (or other marketer). Well-to-do ethnic women feel more pressure than their white counterparts to be respected and feel a sense of achievement and therefore work harder to achieve it. If you want to reach this time-pressed consumer, offer programs that combine your desire for work/life balance and the respect you’ve likely earned.
Our recommendation: If wine companies want to achieve brand dominance, they need to create experiences that maximize women’s social lives and enhance their businesses and careers.
We anticipate that more emphasis will be placed on product differentiation at the retail level that aims to facilitate the shopping experience and purchase decision. This will be accomplished through on-site and off-site events, including in-store tastings on weekends, sponsored invitation-only wine dinners at select restaurants, and sponsorships of high-profile events from professional organizations and social events for women.