They’re being called the most influential segment since the baby boomers. They accounted for 29 percent of the overall Hispanic spend in 2012, a number which is predicted to swell to 37 percent by the end of the year.
Who are these consumers and how will they influence the economic landscape of the future? According to a new Nielsen study presented by AHAA, The Voice of Hispanic Marketing, in late May 2013, they are “Upscale Hispanics.”
Upscale Hispanics are defined by the study as the segment of the population with annual household incomes between $50,000 and $99,999. They account for 15 million of the overall Hispanic population in the U.S., claim a median household income of $71,000 and are considered one of the most viable and sophisticated markets today. Predicted to command 40 percent of Hispanic spending power by the end of this year, this consumer segment is expected to proliferate to 35 million by 2050, more half of today’s overall Hispanic population. So who are they and what are they all about? The study revealed some interesting data about America’s new yuppies.
Power Latinos top consumers. Who they are and where they live
Upscale Hispanics are young, family driven and on the move. Seventy five percent are under the age of 45 and have households of 4 or more people. Sixty percent live in the Southwest Pacific region, mainly Los Angeles, with many of the rest spread throughout the country’s top Latino markets including New York, Miami and Houston but surprisingly they are also core to secondary and emerging Latino consumer markets including Honolulu, DC and Salt Lake City. Oklahoma City and Raleigh are two emerging markets that have seen the largest recent Hispanic growth at 191 percent and 175 percent respectively over the last 13 years.
Nearly all are fully bilingual and consume media both in English and Spanish almost equally. What’s interesting about language preference among this segment is that Spanish dominance is actually growing, an historic anomaly for immigrants in the U.S. From 2010 to 2012 language preference for Spanish over English among Upscales grew by 18 percent. These consumers also tend to travel more than the general population and are more likely to travel abroad than their white counterparts. Most upscale Latinos identify themselves as bicultural and enjoy advantages unique to living in “dos mundos” according to the study.
Upscale Hispanics are tech savvy and connected. They appreciate a simplified but constantly online lifestyle and have traditionally been early adopters of technology, consistently over-indexing the general population with mobile device usage by more than 16 percent.
Nearly 34 percent manage their finances using mobile devices compared to only 22 percent of upscale non-Hispanics. They also spend a greater percentage of their disposable income on computers and wireless technology. The study also revealed that Upscale Hispanics are the heaviest consumers of personal care and beauty products eclipsing the general population as well as other Hispanics by an average of 40 percent. Not only do they shop more frequently for these products but they also spend more per trip and are more likely to purchase higher end brands.
Education and jobs
In terms of education, business and investments, power Latinos exhibit perhaps the most impressive and impactful behavior shifts in history, making them a vital prospect for marketers. Hispanics are outpacing the rest of the population in jobs recovery and their employment rates are higher today than when the Great Recession began. Contrary to general population attitudes and assumptions, Latinos are gaining fast and furious clout in the professional labor markets, a fact that directly correlates with their steady increase in higher education attainment levels. Today 39 percent of Upscale Hispanics are part of the white collar workforce compared to 50 percent of non-Hispanics. In only one year, from 2010 to 2011 college enrollments among Hispanics increased by 15 percent and graduation rates are up year over year for the last 10 years.
In hot pursuit of the American dream
A powerful characteristic among Upscale Hispanics is their entrepreneurial nature and their propensity for investing in the future. Latino business ownership rates have soared over the last ten years and despite ongoing challenges in terms of access to credit and capital, over a half million Upscale Hispanic households have one member that own a business- that’s 1 in every 8 households.
They are financially sophisticated and are gaining presence on Wall Street with 43 percent investing in stocks and mutual funds compared to 54 percent of their non-Hispanic counterparts. They participate in retirement and pension plans at about the same rate as other upscale segments but show a preference by nearly 2 to 1 for Keogh plans over 401K and traditional IRAs.
Originally published on VOXXI as Power Latinos to play a vital role in rebuilding the middle class