by Terry Soto/multicultural marketing expert
Coming out of the 2010 census, Peter Franchese, the founder of American Demographics magazine wrote a compelling white paper entitled What the Census Means for Marketing and Advertising. He stated that, “The concept of an ‘average American’ is gone, probably forever.” His preliminary 2010 Census projections point to the U.S. as a multicultural nation, a multigenerational society and a multi-segmented household economy. On the heels of the 2020 Census, his words are more meaningful than ever.
According to Nielsen, multicultural consumers are the fastest growing segment of the U.S. population. The U.S. multicultural population is now more than 120 million strong and represents 38 percent of the country’s population. It is on a growth fast-track and is projected to be the majority population by 2044. In just 2015, Nielsen reported the multicultural population was growing by 2.3 million people per year, 191,932 people every month, 6,310 people every day and 263 people every hour.
Generationally, the U.S. population has morphed into a dichotomy of young and old each with very different views of the world. Generationally, half (46 percent) of children under 18, and 40 percent of Gen Y and Gen X are multicultural while 66 percent to 80 percent of Boomers and 65-plus, respectively are Non-Hispanic White with older generations having a very difficult time accepting, understanding and relating to the changing America.
Commenting on one of my articles on strategic relevance on retailwire.com, Dan Stanek, EVP of Big Red Rooster said, “One of the underlying reasons companies have been slow to stay current with the changing marketplace is that innovation is more difficult when leaders are much older than the target market and they do not understand how they think.”
Is he right? It’s a thorny question to ponder, but one that must be asked. Is the older age skew of America’s business leaders affecting their ability to stay current with changing demographics? Could it be that the generational and cultural divide affects older generations’ ability to see the value in pursuing the growing numbers in the multicultural marketplace? Might it be uncomfortable for them to pursue markets other than the ones they know so well? Adaptability and successful innovation require a broadening definition of our country’s consumer population.
With $3.5 trillion in buying power, the size and economic clout of the multicultural population continues to grow; U.S. retailers must consider the incremental revenue potential this population’s growth represents. Leaders (especially those from the Boomer and senior generations) who recognize this population’s financial strength and can successfully lead the reframing of this population as a viable revenue growth opportunity for their organizations stand to benefit greatly.
The key is to see and move beyond the obvious and the tried and true. Being successful will require stepping out of comfort zones and outdated thinking and becoming familiar with and embracing the new and different.
The goal is for retailers to become relevant to these growing group of consumers. Being relevant requires gaining comfort and familiarity with these consumers. It requires developing an understanding and appreciation of multicultural populations as human beings who have the same needs as other consumers, albeit with some nuances driven by their cultural backgrounds.
Smart retailers will work to gain this understanding and ensure their organizations can implement market strategies that resonate among the multicultural shoppers they want to attract. Customer experience is the differentiator in today’s shopping environment. Retailers will want to ensure positive customer experiences for all their customers—experiences that will keep these culturally diverse consumers coming back and, hopefully, delighting them to the point that they spread the word.
This requires consideration of multicultural insights for product and service innovation, communication execution, media selection, distribution channels, human resources, merchandising, operations and technology infrastructure.
So, the adage, “know thy customer” becomes more and more important as the population grows more and more diverse. Some questions you may want to ask internally should include:
- What are the opportunities in our footprint?
- How can we use current data resources available to us to calculate the potential?
- Does our company have the internal capabilities and competencies to optimize our position?
- How do we make multicultural marketing and merchandising a core competency within our company?
- Who are the best partners to get us there?
- Who needs to be accountable?
Multicultural populations are by far one of the strongest revenue growth opportunities of the 21st century. This is exciting news for American businesses looking for new revenue flows. As the United States continues to transform demographically and culturally, American consumers’ preferences and needs are shifting. Explosive population growth, significantly younger profiles and powerful spending power increasingly position multicultural consumers as an economic force for the foreseeable future.
Effectively expanding a business model to this growing population opportunity requires leadership-led cultural change, strategic thinking and investment of resources (people, time, and money) to implement relevantly. It doesn’t happen overnight. There are no shortcuts and there is no magic bullet. Like any strategy expansion into a new market, it can take months and sometimes years, but when implemented in line with the company’s strategic direction, applying the same proven processes and investments commensurate to the task, the results are always accelerated revenue flows and market share growth from repeat business, high customer satisfaction and fierce loyalty.
Capitalizing on this market opportunity will be disruptive. But when thinking of the big successes in business of late, disruptors play a big part, and those companies that lead the disruption are always the biggest winners.
Terry Soto is CEO of About Marketing Solutions Inc. and is one of the country’s foremost experts on top line growth in new cultural markets. Soto has advised myriad Fortune 500 executives in the U.S. and Internationally on how to accelerate growth and gain competitive advantage in multicultural markets. Soto’s newest book, The 3.5 Trillion Advantage – A Marketer’s Guide to Revenue Growth In Today’s America shows executives in charge of topline growth how to “quick start” or “step up” success in the most economically viable consumer market of the 21st century. Soto is a member of the Forbes Business Council and is a regular contributor on Forbes.com and Forbes’ expert panels.