AHAA: The Voice of Hispanic Marketing and Nielsen last year identified affluent Hispanics as the most influential segment since the baby boomers.
AHAA and Nielsen released a second study, Upscale Latinos 2.0: A Renewed Outlook for High-End Marketers, showing that the segment contributes nearly 40 percent of the $1.5 trillion wielded by U.S. Hispanics, and that upscale Hispanics are optimistic about the economy and plan to increase their spending further.
The study was released Wednesday at AHAA's annual Thinking Under the Influence conference in Miami. The study identified department stores, cosmetics and casual dining as key categories for growth.
"Upscale Latinos have demonstrated significant upward mobility across the upscale economy, making them an enormous opportunity for growth for U.S. marketers," Gaby Alcantara-Diaz, president of G ADMarketing Communications and AHAA's education chair, said in a statement.
She added that U.S. Hispanics are "upgrading their lifestyle, sense of self, and family with the pursuit of luxury."
Balancing success, family
Upscale Latinos, which AHAA defines as households earning $50,00-$100,000 a year, tend to be bicultural, skew younger, have larger families and are more likely to be dual income earners than non-Hispanic Upscales.
The "optimism, confidence and increased spending make this segment an imperative to the U.S. economy and prestige brands," Monica Gil, senior vice president and general manager, Multicultural Growth & Strategy, Nielsen, said in a statement.
Members of the segment lead healthier lifestyles, provide health coverage for their families and invest in their children's college education, according to the study.
While they are as likely to plan for retirement as Upscale non-Hispanics, providing for their parents in old age is more important to them.
Among the study's other findings:
• Upscale Hispanics spent $3.7 billion in online purchases in the past 12 months on clothing, airline tickets, and health and beauty care.
• 40 percent of Upscale Hispanics purchased home furnishings and appliances during the past year -- 18 percent more likely than Upscale non-Hispanics.
• Hispanic Upscales are big on home electronics; children's clothing; designer shoes, clothing and accessories; and home improvements.
One segment, 3 mindsets
Within the $500 billion Upscale Latino segment, there are three attitudinal subgroups, according to the study. Each reports strong ties to Hispanic culture and 30 to 40 percent voice a strong cultural duality.
• Luxury Seekers (42 percent) are drawn to high-end products to reward themselves. This attitudinal segment is 24 percent more developed among Upscale Latinos than among non-Hispanic Upscales.
• Sensible Seekers (40 percent) tend to wait on buying high-end goods until it "makes sense." This attitudinal segment is almost 20 percent smaller among Upscale Latinos.
• Social Seekers (18 percent) seek recognition and social status through high-end goods and services.
Upscale Latinos are twice as likely as non-Hispanic Upscales to pay a premium price for high-end department store brands that project success. Luxury Seekers are most comfortable shopping in mid-market stores, which have been successful in attracting and retaining the Upscale Latino shopper.
What it means for marketers
Upscale Latinos share many similarities with Upscale non-Hispanics, but they often derive value from high-end goods and services that feed a nuanced set of needs and desires, according to the study.
Overall, they gravitate toward mid-market and high-end retailers, prestige cosmetics, and core casual restaurants that fit their unique emotional and functional needs, and they're willing to spend more to get what they want.
"This study suggests that opportunities exist to optimize high-end brand efforts by developing an overarching brand message and complementing it with more targeted approaches that respond to particular drivers and detractors within each subgroup," said Carlos Santiago, AHAA research chair and president of Santiago Solutions Group.
"As part of AHAA's thought leadership initiatives, we plan to host a series of webinars with Nielsen that dissect media consumption and explore the categories that present the greatest opportunities for growth."
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