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Buying power projected at $1.1 trillion by 2015
Nashville, TN (Profitable.com) As the economy begins to regain some traction, it has become apparent the African American population is now an economic force to be reckoned with. Their buying power is projected to be $1.1 trillion by 2015. According to the Nielsen Company study, “African-American Consumers: Still Vital, Still Growing,” this population’s growth outpaces the rest of the population by 30 percent. And, the demographic is increasingly younger, is more educated and has higher incomes than is commonly believed. Between 2000 and 2009, the number of African Americans attending some college or earning degrees has grown: 45 percent of men; 54 percent of women. Households earning $75,000 or more grew by more than 60 percent, faster than the rest of the population. African American’s average income nationwide is$47,290.Increasing income and education have caused notable on-line trends. During July 2011 there were 23.9 million active Black Internet users: 76 percent visited social networking sites; 54 percent visited a travel site. Mass merchandisers gained 50 percent of the on-line users, the other 50 percent spent time on current events and global news sites. While on-line nearly 13 percent made airline purchases or reservations; just under 10 percent made hotel reservations.
The Nielsen Company study, commissioned by the National Newspaper Publishers Association, sheds light on the economic potential of African Americans and the important trends in this community. The report’s findings will be presented at the June conference of the National Association of Black Accountants conference in Nashville, Tennessee.
So what does this all mean in business terms? It means African Americans wield tremendous buying power. The Nielsen study showed numerous shopping trends, mostly for household, health and beauty, travel, smart phones and child related items. They have an average of four television sets per household and prefer premium cable channels. Forty-four percent of all new mobile phones purchased by African-Americans are smartphones. Sixty-eight percent used their smartphones for shopping information.
“The Nielsen report is very encouraging because it shows the African American population is a tremendous financial asset to this country’s economic recovery,” says Calvin Harris, Jr. , President & CEO of the National Association of Black Accountants.
There are 43 million African Americans in the United States, 13.7 percent of the total population, the second largest racial minority in the country. The median age is 32 and 47 percent are under 35 years of age. Even with this awesome buying power most mainstream advertisers are not inclusive, do not include African Americans in media and marketing plans and have underestimated the market size.
The Nielsen study offers an in-depth analysis of African-American buying habits, observes trends and provides great insight into a market segment that deserves far more attention from the corporate sector. Many organizations should revisit their outreach efforts to harness the potential of this under-appreciated market. Those efforts could become a significant pathway to economic sustainability in America.
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