Black consumer’s buying clout seen influencing Thanksgiving and Black Friday holiday shopping

Black consumer’s buying clout seen influencing Thanksgiving and Black Friday holiday shopping

BCN Executive Editor Wesley Brown – Nov. 22, 2021 — As millions of shoppers plan to spend hundreds of billions of dollars this holiday season after nearly two years of COVID-19-induced isolation, the buying of Black consumers is increasingly impacting a larger share of the nation’s economy.

In late August, the University of Georgia’s Selig Center for Economic Growth released its 30th Multicultural Economy report, highlighting the population of the United States has grown more racially and ethnically diverse and so has the nation’s buying power. 

The key takeaway for the 2021 report is that African Americans, Hispanics and Asian Americans today Hispanics wield formidable economic clout, which means top retailers and other online and brick-and-mortar merchants can no longer take a one-size-fits-all approach to marketing consumer goods and services.

“The buying power estimates and differences in spending by race and/or ethnicity suggest that as the nation’s consumer market becomes more diverse, advertising, products and media must be tailored to each market segment,” said Jeff Humphreys, director of the Selig Center in Athens, Ga., and author of the Multicultural Economy report. 

Based on data provided by the U.S. Census Bureau, the U.S. Bureau of Economic Analysis and other sources, the Selig Center estimates the buying power for African American, Asian American and Native American consumers, which has exploded over the past 30 years, up from $458 billion in 1990 to $3 trillion in 2020.  In addition to increasing sheer size, their combined share of the nation’s total buying power increased from 10.6% in 1990 to 17.2% in 2020.  

In 2020, African American economic clout energized the U.S. consumer market as never before.  The buying power of African Americans rose to $1.6 trillion, or 9% of the nation’s total buying power. In 2020, the 10 states with the larg­est African American markets are Texas ($149 billion), New York ($141 billion), Georgia ($118 billion), Califor­nia ($118 billion), Florida ($116 billion), Maryland ($86 billion), North Carolina ($75 billion), Virginia ($67 billion), Il­linois ($63 billion) and New Jersey ($57 billion).

The states with the fastest growth in Black buying power between 2010-2020 are North Dakota (316%), South Dakota (146%), Hawaii (113%), Idaho (109%), Washington (104%), New Hampshire (104%), Oregon (103%), Wyoming (103%), Arizona (103%) and Nevada (101%).

After a decade of strong growth, the Hispanic market is the largest minority market in the U.S. and continues to expand briskly. The group’s spending power grew to $1.9 trillion in 2020, an increase of 87% from 2010. Hispanic buying power also has grown substantially over the last 30 years, from $213 billion in 1990 to $1.9 trillion in 2020. Hispanic buying power accounted for 11.1% of U.S. buying power in 2020, up from only 5% in 1990.

Humphreys said the diversification of the U.S. consumer market has been driven by many factors, including population growth, favorable demographics, entrepreneurial activity and rising levels of educational attainment,

“A major factor underpinning the growth of the nation’s minority markets is that African Americans, Asians and Hispanics continue to become more highly educated, which allows proportionally more Blacks, Asians and Hispanics to enter occupations with higher average salaries,” he said.

In 2020, the 10 states with the largest Hispanic markets, in order, are California ($506 billion), Texas ($361 billion), Florida ($208 billion), New York ($139 billion), New Jersey ($70 billion), Illinois ($68 billion), Arizona ($63 billion), Colorado ($40 billion), New Mexico ($32 billion) and Washington ($31 billion).

The states with the fastest growth in the Hispanic market between 2010-2020 are North Dakota (206%), South Dakota (136%), Montana (133%), Idaho (121%), District of Columbia (119%), New Hampshire (118%), Oregon (115%), Washington (114%), Massachusetts (113%) and Pennsylvania (112%).

The Multicultural Economy report also includes national market estimates for seven of the largest Hispanic subgroups in the United States.  Persons of Mexican origin constitute the largest subgroup and account for 56% of Hispanic buying power in the U.S.  

Also, nearly 21 million Asian Americans, including Native Hawaiians and Pacific Islanders, represent 6.3% of the U.S. population. The group’s buying power of $1.3 trillion is larger than the annual economic GDP of all but 13 countries.

In 2020, the 10 states with the largest Asian consumer markets are California ($439 billion), New York ($109 billion), Texas ($100 billion), New Jersey ($70 billion), Washington ($58 billion), Illinois ($49 billion), Virginia ($39 billion), Florida ($37 billion), Mas­sachusetts ($36 billion) and Hawaii ($36 billion).

The states with the fastest growth in the Asian market between 2010-2020 are Washington (174%), South Dakota (164%), Utah (157%), Vermont (154%), Indiana (146%), Montana (145%), Texas (153%), Oregon (142%), North Carolina (142%) and Georgia (138%).

The report provides data on 17 subgroups of U.S. Asian consumers, such as Chinese, Indians and Filipinos. The market’s diversity is both a strength and a challenge to marketers, Humphreys said. 

Meanwhile, nearly 2 million more people than last year are expected to shop from Thanksgiving Day through Cyber Monday this year even as consumers have continued the trend of starting their holiday shopping earlier in the year, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics.

“We’re expecting another record-breaking holiday season this year and Thanksgiving weekend will play a major role as it always has,” NRF President and CEO Matthew Shay said. “Nonetheless, consumers are starting earlier than ever to be sure they can get what they want, when they want it, at a price they want to pay. Black Friday stopped being a one-day event years ago, and this year some consumers started shopping for Christmas as early as Halloween. NRF is encouraging consumers to shop safely and shop early, but retailers are confident they have enough inventory on hand to meet holiday demand.”

Fully two-thirds (66 percent) of holiday shoppers surveyed in early November plan to shop Thanksgiving weekend this year. That amounts to an estimated 158.3 million people, up from 156.6 million last year but still below the 165.3 million in pre-pandemic 2019. The survey found 30.6 million plan to shop either in-store or online on Thanksgiving Day, 108 million on Black Friday, 58.1 million on Small Business Saturday, 31.2 million on Sunday and 62.8 million on Cyber Monday. The total of the daily numbers exceeds the overall figure because some consumers will shop multiple days, NRF officials said.

Among those shopping on Thanksgiving Day, 65% are likely to do so in stores, up from 50% last year, when worries about COVID-19 were still keeping many people at home. On Black Friday, 64% are likely to shop in stores, up from 51% last year.

For those shopping during the weekend, deals that are “too good to pass up” remain the top reason, cited by 58%, but tradition continued to come in second at 28%. While Thanksgiving weekend will be busy, 61% of those surveyed had already begun their holiday shopping, about the same as last year’s 59% but up from 51% a decade ago in 2011. The survey found 46% started earlier this year than they typically do. While the bulk of shopping may be yet to come, consumers had completed 28% of their holiday shopping by early November.

“Shopping early is a trend we’ve seen for years and it began long before the pandemic,” Phil Rist, Prosper’s executive vice president of strategy. “While some consumers like the thrill of last-minute shopping and others just procrastinate, many prefer the comfort of having the shopping done early so they can relax and enjoy the season.”

The survey also addressed what consumers plan to buy. Clothing continued to top the list, expected to be given by 53% of shoppers, followed by gift cards at 46%, toys at 39%, books/music/movies/video games at 35% and food/candy at 31 percent as the top five categories.

Gift cards remain a perennial favorite for the flexibility afforded to recipients, with spending expected to total $28.1 billion, the highest since $29.9 billion in 2018. Shoppers plan to buy an average three or four cards this year with an average $48.92 per card, including restaurant cards (cited by 32%), department store cards (26%), bank-issued gift cards (also 26%) and coffee shop cards (20%).

For those buying for children, top toys for boys this year include 1) Lego, 2) cars and trucks, 3) Hot Wheels, 4) PlayStation, 5) video games, 6) Nerf, 7) Paw Patrol, 8) remote control car, 9) Xbox and 10) Pokémon. For girls, the top toys are 1) Barbie, 2) doll, 3) LOL dolls, 4) Lego, 5) Apple products/smartphone, 6) American Girl, baby dolls (tied), 7) apparel/accessories, Frozen (tied), 8) Disney/Disney princess, 9) beauty products and 10) Nintendo Switch.

The survey of 7,837 adult consumers was conducted November 1-10 and has a margin of error of plus or minus 1.1%. The National Retail Federation, the world’s largest retail trade association, represents over 16,000 companies ranging from mom-and-pop establishments to retail conglomerates such as Walmart, Amazon and Target.

NRF’s forecast last month that holiday sales during November and December will grow between 8.5 percent and 10.5 percent over 2020 to between $843.4 billion and $859 billion – setting records for both the growth rate and total amount spent. Consumers are expected to spend an average $997.73.

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