Hispanics as a group are often analyzed as consumers because their cumulative buying power is so wildly attractive to corporations.
In this second installment of our three-part series for National Hispanic Heritage Month, we take a look at some research that’s been done on this growing demographic.
Latino versus Hispanic
The terms Hispanic and Latino are not necessarily interchangeable. Hispanic generally refers to descendants from geographic locations that speak Spanish as a primary language. Latino generally refers to descendants of Latin America.
Why is this important? Companies that try to appeal to this market often lump everyone into a single group — whether Hispanic or Latino. It can potentially offend specific segments of this population.
For example, people from Brazil are technically not Hispanic since Brazilians speak Portuguese, not Spanish. The lesson is to know and understand your consumer target market before you try to appeal to them.
Consumer behavior analyst company Nielsen offers interesting insights into the shopping behavior of the Hispanic market. Here are some highlights:
- S.-born Hispanics tend to spend more than non-U.S.-born Hispanics.
- Hispanics typically spend more per shopping trip than non-Hispanics.
- S.-born Hispanics generally have higher incomes than non-U.S.-born Hispanics.
- 79% of Hispanics own smart phones.
- 35% of Hispanic households speak both Spanish and English at home.
- The spending power of Hispanics as a whole is estimated at around $1.4 trillion.
Morgan Stanley predicts Hispanics’ spending as a consumer group will exceed that of millennials and the over-65 demographic within five years. This means companies would do well to research and understand this group since they will likely become heavy hitters in the U.S. consumer market
Yet, interestingly enough, some companies consider Hispanics a “hidden market” and wonder if it’s worth the expense and resources to appeal to them.
If the predictions are correct, then, yes, it is indeed worth it to try to attract Hispanic consumers.
Next week we’ll look at ways companies can appeal to Hispanics to gain them as customers.