Black consumers are willing to pay more for the right brands. Is yours one of them?
Posted: Sat Dec 07, 2024 10:19 am
Tatiana Portela
Feb 17, 22 | 6 min read
Afro-descendant consumers
Reading time: 5 minutes
Consumer behavior has changed a lot, right? When it comes to African-American consumers and people of African descent in general, this fact is even stronger.
A McKinsey survey found that this segment is willing to pay up to 20% more for the right products and services that meet their needs.
For brands, this is an incredible opportunity to increase their efforts to serve this group.
The question is: How can you be prepared to communicate more effectively with these consumers, in order to achieve better results while promoting racial equity?
The purchasing power of this group is growing rapidly
The fight for racial equality has brought about huge changes on many issues, including purchasing power. As a result, brands are stepping up to meet this new economic force like never before.
Fortunately, the purchasing power of Black people is growing rapidly— from $910 billion in 2019 to a projected $1.7 trillion in 2030. Yet for a long time, businesses have not viewed these consumers as their priority ethnic targets.
But - positively - this scenario is slowly changing.
Take a recent example: This month, Target introduced 40 new beauty brands to its lineup , and half of them are from Black-founded or Black-owned companies.
The announcement is part of the retailer's list of tunisia consumer email initiative to spend more than $2 billion with ethnically-owned businesses by 2025.
Some large companies are taking the initiative to better cater to this group, while also providing room for small and large businesses they own to grow.
The roots of dissatisfaction
In the United States, African Americans have been underbanked since the industrial revolution. Many of them face daily challenges that inevitably affect their chances of success. But even those who have access to products and services can feel dissatisfied with the lack of understanding of their aesthetics.
Serving these customers better will not only benefit them, but brands as well. Those who refuse to accept this scenario will be the ones who lose the most.
Capturing the attention of this growing economic bloc can lead to long-term relationships: 68% of McKinsey respondents reported they are loyal to brands that best meet their needs.
Providing value, respecting diversity and designing products for the preferences of this ethnic-cultural group is a win-win situation. In other words, we could expect both social and economic benefits.
It is very important that people of African descent are able to contribute to the economy as workers and consumers, gaining access to resources and the opportunity to succeed.
Of course, their tastes aren’t a monolith. Each individual has a particular way of interacting with brands. However, most customers in this group seek out more inclusive and trustworthy brands, evaluating each stated social mission and credibility among their communities, in addition to product quality.
How can I make my brand meet the needs of this audience?
First things first: don’t do it just for profit . Companies that claim to be inclusive to the world but fail to adopt inclusive measures within the workplace are often exposed and lose credibility.
You need to foster representation across all departments and initiatives, and this goes far beyond marketing campaigns.
After adopting this mindset, you can pay more attention to your strategies. Here is a list of 5 steps worth taking to win the credibility, heart, and also the preference of consumers from this ethnic group:
1. Employ a representative workforce
Representation goes way beyond putting a person in a TV commercial or a magazine ad. There are deeper elements that should concern you.
For example, what is the percentage of African-Americans in your company? What is the percentage of these people in senior positions?
You need to hire decision makers, leaders, and marketing professionals who understand and can speak to the consumer communities in this segment.
Keep in mind that your brand will only provide services and products optimized for this audience if there is a workforce that represents it within the company.
Representation in a company means full ability to access the deepest desires and particularities. It is harder to think differently when everyone on your team looks the same .
2. Promote policies for this audience
Make sure your products are accessible to these communities. Promote diverse suppliers for Black-owned or Black-focused brands. Stakeholders and partners should also be anti-racist and take inclusive measures.
One example of these efforts is the initiative of retail brand Target. Cassandra Jones, vice president and general manager of beauty and cosmetics at Target, stated: “With the addition of nearly 40 new beauty brands, we are raising the bar on our premium beauty experience.”
Among these new brands, twenty of them belong to Afro-descendant entrepreneurs. This could be a great opportunity for other companies to follow the example of a global brand.
Support brands and give them room to grow. Engage company leadership to strengthen or create a position on the importance of racial diversity and the fight against racism .
3. Offer products and services that satisfy the tastes and needs of this group
For decades, beauty and personal care brands have catered almost exclusively to the needs of white consumers.
However, the willingness to explore new products and services is a human characteristic that has nothing to do with race. 81% of those surveyed by McKinsey said they want to switch brands. This data suggests that dissatisfaction with current options is widespread.
Promoting respect for all people in the planning of products, services and customer service is an urgent need.
Keep in mind that a brand that is not seen is not remembered. Likewise, an audience that does not see itself represented does not have your brand as an option.
Feb 17, 22 | 6 min read
Afro-descendant consumers
Reading time: 5 minutes
Consumer behavior has changed a lot, right? When it comes to African-American consumers and people of African descent in general, this fact is even stronger.
A McKinsey survey found that this segment is willing to pay up to 20% more for the right products and services that meet their needs.
For brands, this is an incredible opportunity to increase their efforts to serve this group.
The question is: How can you be prepared to communicate more effectively with these consumers, in order to achieve better results while promoting racial equity?
The purchasing power of this group is growing rapidly
The fight for racial equality has brought about huge changes on many issues, including purchasing power. As a result, brands are stepping up to meet this new economic force like never before.
Fortunately, the purchasing power of Black people is growing rapidly— from $910 billion in 2019 to a projected $1.7 trillion in 2030. Yet for a long time, businesses have not viewed these consumers as their priority ethnic targets.
But - positively - this scenario is slowly changing.
Take a recent example: This month, Target introduced 40 new beauty brands to its lineup , and half of them are from Black-founded or Black-owned companies.
The announcement is part of the retailer's list of tunisia consumer email initiative to spend more than $2 billion with ethnically-owned businesses by 2025.
Some large companies are taking the initiative to better cater to this group, while also providing room for small and large businesses they own to grow.
The roots of dissatisfaction
In the United States, African Americans have been underbanked since the industrial revolution. Many of them face daily challenges that inevitably affect their chances of success. But even those who have access to products and services can feel dissatisfied with the lack of understanding of their aesthetics.
Serving these customers better will not only benefit them, but brands as well. Those who refuse to accept this scenario will be the ones who lose the most.
Capturing the attention of this growing economic bloc can lead to long-term relationships: 68% of McKinsey respondents reported they are loyal to brands that best meet their needs.
Providing value, respecting diversity and designing products for the preferences of this ethnic-cultural group is a win-win situation. In other words, we could expect both social and economic benefits.
It is very important that people of African descent are able to contribute to the economy as workers and consumers, gaining access to resources and the opportunity to succeed.
Of course, their tastes aren’t a monolith. Each individual has a particular way of interacting with brands. However, most customers in this group seek out more inclusive and trustworthy brands, evaluating each stated social mission and credibility among their communities, in addition to product quality.
How can I make my brand meet the needs of this audience?
First things first: don’t do it just for profit . Companies that claim to be inclusive to the world but fail to adopt inclusive measures within the workplace are often exposed and lose credibility.
You need to foster representation across all departments and initiatives, and this goes far beyond marketing campaigns.
After adopting this mindset, you can pay more attention to your strategies. Here is a list of 5 steps worth taking to win the credibility, heart, and also the preference of consumers from this ethnic group:
1. Employ a representative workforce
Representation goes way beyond putting a person in a TV commercial or a magazine ad. There are deeper elements that should concern you.
For example, what is the percentage of African-Americans in your company? What is the percentage of these people in senior positions?
You need to hire decision makers, leaders, and marketing professionals who understand and can speak to the consumer communities in this segment.
Keep in mind that your brand will only provide services and products optimized for this audience if there is a workforce that represents it within the company.
Representation in a company means full ability to access the deepest desires and particularities. It is harder to think differently when everyone on your team looks the same .
2. Promote policies for this audience
Make sure your products are accessible to these communities. Promote diverse suppliers for Black-owned or Black-focused brands. Stakeholders and partners should also be anti-racist and take inclusive measures.
One example of these efforts is the initiative of retail brand Target. Cassandra Jones, vice president and general manager of beauty and cosmetics at Target, stated: “With the addition of nearly 40 new beauty brands, we are raising the bar on our premium beauty experience.”
Among these new brands, twenty of them belong to Afro-descendant entrepreneurs. This could be a great opportunity for other companies to follow the example of a global brand.
Support brands and give them room to grow. Engage company leadership to strengthen or create a position on the importance of racial diversity and the fight against racism .
3. Offer products and services that satisfy the tastes and needs of this group
For decades, beauty and personal care brands have catered almost exclusively to the needs of white consumers.
However, the willingness to explore new products and services is a human characteristic that has nothing to do with race. 81% of those surveyed by McKinsey said they want to switch brands. This data suggests that dissatisfaction with current options is widespread.
Promoting respect for all people in the planning of products, services and customer service is an urgent need.
Keep in mind that a brand that is not seen is not remembered. Likewise, an audience that does not see itself represented does not have your brand as an option.