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December 19, 2020

By Isaac Mizrahi -  Co-President / ALMA

2020 is the year when the majority of all Americans under seventeen years old will be from a minority background, a process that will culminate with a so-called “minority-majority” population by the mid-2040s. These demographic changes will bring about a significant transformation to Corporate America, and during the next few months, I will discuss some of these consequences, in each article targeting one specific area of our business environment.

Since the beginning of the year, I’ve been writing about how the minority-majority demographic changes in America are currently impacting and will continue to shape the way we do business in this country. These articles have covered areas such as Sports, Music, Technology, Health & Wellness, Entertainment, Regional Shifts, Multiracial Families, Small Business, and the Marketing and Advertising of businesses.

This month, as we conclude this series, we focus on what learnings these different articles have in common and, most importantly, how leading marketers across the U.S. are applying them.

1 - The Way Business Was Managed in the Past Won’t Work Anymore

The demographic changes we face as a country bring challenges and opportunities for corporations as new consumption patterns, different communication needs, distinct attitudes, and behaviors emerge. Understanding and, ideally, preempting these transformational changes will require a new set of tools for CMOs across America—a professional fluent in multicultural marketing.

“Long gone are the days of having separate people or separate teams focus on multicultural marketing. Every marketer and every person on agency teams must build complete plans with a multicultural and cross-cultural connection at the very heart of them. At the core of that work must also be the intuitive cultural understanding of each consumer group – infused into each and every person working on the business.”  Shelley Haus, Chief Marketing Officer, Ulta Beauty

2 - Multicultural Marketing Is Not a Niche Segment Anymore

Treating multicultural marketing as a niche discipline has, over time, helped organizations deprioritize marketing to multicultural segments. After all, once a program is considered a niche, it automatically becomes optional or dependent on the notorious search for "incremental budget."

Multicultural marketing as a discipline deserves the same status other important marketing disciplines like media, shopper marketing, and PR, among others, already have.

“If you’re not growing with multicultural consumers today, you’re not going to grow. The under 18 population in the U.S. is already a multicultural majority with GenZ as the most racially and ethnically diverse generation. As marketers, we should always reevaluate with whom we are trying to reach and build deeper empathy and connection with people to ensure they’re feeling seen. Marketing today means marketing in a multicultural world.”  Brad Hiranaga, Chief Brand Officer, General Mills

3 - Total Market is Over, but a New Model Is Still in the Works

If you still believe that one-size-fits-all when it comes to consumer marketing in the U.S., you're probably three to five years behind where the market has gone. The idea of Total Market as one single approach towards consumers has failed miserably by denying corporations a better shot at one of the few growth opportunities in the marketplace—the multicultural segment.

However, a new model is still in the works, but we won't have a model that will work for just any company type. We have seen successful brands orchestrating a calendar that combines moments of mass reach messages with stronger segmented focus moments.

“One of our key values at McDonald’s is that we open our doors to everyone. As marketers, it’s our responsibility to understand our multicultural consumers intimately and keep them at the center of our growth plans. In the last year, we’ve walked away from Total Market. Today, we kick off all our projects with a round-robin grounding in the insights from all of our different segments. This has brought specificity and inspiration to our marketing and is helping us connect in relevant and authentic ways.”  Morgan Flatley, Chief Marketing and Digital Customer Experience Officer, McDonald’s USA

4 - Expertise and Specialization Are Required to Avoid Improvisation

The era of improvisation by avoiding investing in dedicated specialists to lead multicultural marketing efforts is over. CMOs need to surround themselves with executives, agencies, consultants that have the experience and the know-how to support them. Having one employee from a multicultural background and/or the company's ERG group leading multicultural marketing efforts will probably fail, and this failure will cost millions of dollars.

“We are also re-thinking how we staff, hire, partner with agencies, fund, and build our plans. This has been driven by a clear expectation from me that our business requires this shift to lead with the multicultural consumer for the future. We are pleased with the steps we are making, but we will need to continue to evolve to stay relevant to this changing customer landscape and the minority-majority shift. I see this as part of the challenge of marketing, the constant evolution, and curiosity of staying connected with our broad consumer base.”  Morgan Flatley, Chief Marketing and Digital Customer Experience Officer, McDonald’s USA

5 - Multicultural Marketing Requires a Robust and Comprehensive Plan

The days of multicultural marketing being expressed by a few ads during Black History Month or Hispanic Heritage Month are over. CMOs need to lead the process of creating plans that put multicultural consumers at the center of their growth targets and include business aspects beyond communications, including product development, distribution, employee recruitment, pricing, product mix, and packaging, among other needs.

Moreover, these plans need to be properly funded, proportionally to the size of the opportunity and the importance of these consumers to the company's goals.

“At P&G, we fundamentally believe that building our multicultural business is good business. As such, we are building multicultural marketing into the fabric of how we build brands vs. bolting it on as a separate effort. Our intent is to make these efforts part of our winning strategies – to help widen our advantages across the vectors of superiority…improve productivity…strengthen our organization…and lead constructive disruption across the value chain.”  Jeronimo Escudero – Senior Director Brand Innovation, P&G

6 – Culture is the New Marketing Currency

For decades, multicultural marketing has been reduced to marketing in Spanish, Mandarin, or stereotypical ways to approach the African American segment. Nowadays, multicultural marketing is more sophisticated as stakes are much higher from a business standpoint.

Marketers require a more in-depth understanding of how culture shapes multicultural consumers' attitudes and behaviors and, more importantly, how multicultural consumers shape the country’s broader cultural scene.

“We’ve gone from multicultural marketing to marketing to a multicultural world. Brands can no longer win if they are not steeped in and committed to advancing culture in a meaningful way. In today’s world, cultural credibility is the pathway to commercial viability.”  Kim Paige, EVP, Chief Marketing Officer, BET Networks & Live Events

7 – The Minority-Majority Demographic Shift Is Real

Today, the majority of America's population under 17 years old is already from a minority background. Moreover, this demographic trend is progressing for years to come, reaching a moment in the early to mid-2040s, where the entire country's population will be from a minority background. It's important to reinforce that this is not an opinion. This is not some political statement or wishful thinking, this is a reality, and the business community should set their views aside and prepare to deal with this entirely different marketplace environment.

“America is in the middle of a demographic revolution. These are major, transformative changes in the demography of our country that fundamentally reshape our economy, society, and American identity. Diverse communities are leading this change and reshaping how we communicate, how we consume content, and what defines American culture. As brands come to the table, ‘reaching out’ isn't enough. Brands must be authentic, develop relationships based on trust and a unique understanding of the diverse consumer experience. That takes time, focus, and effort. Diverse consumers are your next best consumer, your biggest fan in social media, and your winning strategy as our American demography evolves.”  Stacie de Armas – SVP Diverse Consumer and Insights & Initiatives DE&I Practice, Nielsen

I sincerely hope that these simple (but complex) learnings help CMOs in one way or another across Corporate America become more versed on what could turn out to be the largest source of growth for the benefit of their brands consequently their companies' bottom line.

 

 

 

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