The African-American Consumer: Is the cultural divide breaking down?

African-Americans have learned to flex their market muscle and powerful influence on both conventional buying and new media use patterns, helping to bridge the cultural divide. At 34 million strong, African-American consumers comprise 12% of the U.S. population, representing the second largest ethnic group after Hispanics. African-American buying power is expected to grow 34% over the next four years, reaching some $921 billion by 2011, according to the Selig Center for Economic Growth.

Impressive stats

Marketers looking to target a high-growth, high-potential audience need look no further. The African-American population segment is projected to increase more than four times faster than the white segment by 2025 (26% vs. 6%). Another reason to tap into the potential of the African-American market is the high degree of home ownership (43%) and education level, which links directly to earning potential (23% of African-Americans hold a bachelor’s degree).

Spread the wealth

The Selig Center Buying Power Study found that the African-American market is much more geographically dispersed than other minority markets, and that five states boasted substantial African-American economies in 2006, measuring more than $50 billion each; New York ($75.6 billion), Texas ($58.1 billion), California ($55.7 billion), Georgia ($54.4 billion) and Florida ($52.7 billion). In addition to being spread across the map (see top 10 markets below ranked by DMA), African-American shoppers are equally varied in where and how they buy.

The where of it

While there are virtually no differences in channel preferences among African-American and non–African-American households when it comes to shopping at grocery, mass merchandisers and warehouse club stores, a higher proportion of African-Americans are more likely to be found shopping the aisles of convenience-oriented formats like drug, dollar and convenience/gas stores, based on Homescan panel household penetration figures.

The gap is closing for preference variances among African-American and non–African-American shoppers.

And, but for three alternative retail channels where shopping patterns differ dramatically, the gap is closing for preference variances among African-American and non–African-American shoppers. Among the differences, about half (46%) of African-American households patronize beauty supply stores—almost three times the rate for non–African-American households. Strategy note to traditional retailers looking to better appeal to the African American consumer: change assortment by including more ethnic beauty products.

Significantly less African-Americans frequent pet stores with a 15 percentage

point differential – representing an opportunity to increase penetration with more targeted programs in urban locations where this outlet is sparse. And 77% of non–African-Americans shop at hardware and home improvement stores compared with just 70% of African-Americans – location again is a likely differentiator.

Of the alternative channels where African-Americans show higher penetration rates compared with non-African-American shoppers, automotive supply stores and electronics stores follow beauty supply stores as the most popular.

These ethnic shoppers make more shopping trips each year than the average household (175 versus 165), but spend less per trip ($39 vs. $44).

As to how African-Americans shop, a 2007 Nielsen Consumer Panel Services study revealed that these ethnic shoppers make more shopping trips each year than the average household (175 versus 165), but spend less per trip ($39 vs. $44).

Category preferences account for many differences in basket size and trip frequency. Predictably, 59% of African-American households purchase ethnic health and beauty aids, versus a mere 2% of non–African-American households. Other product categories with large differentials by ethnicity include feminine hygiene products, fresheners and deodorizers, dried vegetables and grains, flour, baby needs, refrigerated juices and drinks, non-carbonated beverages, gum, skin care and table syrups and molasses.

African-Americans outspend remaining U.S. households in a number of large product categories including baby food, shelf stable juices and drinks, frozen unprepared meat/poultry and seafood, packaged deli meat, personal soap and bath additives as well as ethnic health and beauty aids.

Big numbers, small screen

TV viewing patterns and preferences are similarly revealing. According to the 2007 Nielsen Media Research Report on Television, the number of TV households increased 19.6% between 1990 and 2006 to 110.2 million. Twelve percent of those, or 13.28 million, represent African-American TV households. The average African-American viewing home skews seven years younger than the Total U.S. figure, at 30.2 years old. Additionally, the average African-American TV household is slightly larger in number and features a greater percentage of women and younger persons than the Total U.S counts.

Across the board, by age and gender, African-Americans spent more view time than other households.

Gauging the view

In a summer 2007 Television-At-A-Glance snapshot, Nielsen Media Research reported average daily viewing statistics that showed African-Americans spending 10 hours 48 minutes per day watching TV, nearly three hours more each day than the U.S. total. Across the board, by age and gender, African-Americans spent more view time than other households. Total day viewing exceeds that of Total U.S. by 41%, with adults 55+ recording the highest viewing levels. Interestingly, it is African-American men who devote the most time to the tube in every measured daypart, including late night.

African-Americans are embracing and using the newest technologies at rates that exceed the national average.

Early adapters

African-Americans are embracing and using the newest technologies at rates that exceed the national average. In data from the Nielsen Company’s Home Technology Report and Horowitz & Associates, Inc.’s State of Cable and Broadband Urban Markets 2007 Study, new products and technologies like HDTV televisions, movies on demand (both free and subscription) and HDTV services are in use at higher rates in African-American households compared with white, Hispanic and Asian households.

Adoption of video-capable, interactive cell phones, PDA’s and gaming devices are also on par with or exceed national average in both purchase and use in those same households. Even in areas where they did not exceed national average (DVR usage), African-American consumers were within three percentage points or less in purchasing and using those products. This is in line with the tendency for African-Americans to over index in overall TV consumption, subscription to premium services and on demand usage. Further it confirms that African-Americans as a whole are early adapters of new technologies.

“Our data indicate that African-American demand for and usage of advanced interactive and mobile services continues to trend at the high end of the national average, said Paul Lindstrom, SVP Custom Research for Nielsen. Adriana Waterston, Vice President Marketing and Business Development for Horowitz Associates, Inc. adds, “As access to these new technologies continues to rise, African-Americans will be some of the best customers for advanced and portable entertainment services.”

Converging interests

“Never in the 20 years that the data from Nielsen Media Research has been systematically compared based on race has such a convergence between black and white TV tastes emerged.” –Baltimore Sun, August 12, 2007

In a landmark turn of events this year, black and white viewers both tuned in to the same seven shows in their respective listings.

Once upon a time, the only top 10 TV show to appear on both the African-American and Total U.S. viewers list was Monday Night Football. In a landmark turn of events this year, black and white viewers both tuned in to the same seven shows in their respective listings. Experts ascribe much of the change to a lack of choice, less Afro-centric programming, the merger of the WB and UPN networks, and the rise of reality TV that erases racial boundaries.

American Idol is the “perfect storm” exemplar of this type of programming, where the competitor roster accurately reflects the diversity that is America. Three finalists, including the ultimate winner Jordin Sparks, and Melinda Doolittle, who many believe to be the finest voice ever to appear in the competition, were women of color. African-Americans and other ethnic minorities find themselves mainstreamed on the airwaves thanks to featured players and producers responsible for current programming. True to historical precedent, the arts are once again proving to be the catalyst that bridges the cultural divide.

Breaking the Myth: More Time at Work = Less Time with Children

The African-American population segment is projected to increase more than four times faster than the white segment by 2025 (26% vs. 6%).

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