The buying power of the African-American market segment increased by 27% from 2010 to 2015, and currently stands well over $1 trillion. The growing rate of African-Americans earning a college degree has enabled higher salaries, household incomes and savings. Not only are they a group possessing substantial economic power, but extensive cultural influence as well. As the African-American population continues to grow, the trends, lifestyles and interests of these consumers will continue shifting. Brands should continue to evolve their media and marketing strategy to stay relevant among this influential segment.
Below are the essential insights to help you understand the purchase power and spending trends of African-American consumers:
Household income and savings
From 2005 to 2014, African-American households earning more than $100K grew from one billion to two billion. Moreover, those with a household income between $75K-$100K rose by a whopping 25%. Median African-American household savings is relatively lower than the general population, with the average at $40K compared to $97K. Various factors contribute to this number, including households with single mothers, debt, and wealth inequality. However, 14% of African-American women possess annual incomes of $50K or more.
Areas of higher expenditure
African-American consumers with an income of over $100K spend 27% more on movie tickets, 17% more on groceries and 12% more on wine than Non-Hispanic White consumers. Top purchases made by the overall African-American population include dining out, apparel, personal care products, home furnishings, appliances and home improvement items. Further, overall African-Americans spend more than all other consumer groups on endowment, annuity, personal insurance, pensions and social security. A breakdown by gender illustrates African-American women spend 44% more on women’s fragrances than Non-Hispanic White women, and 59% pay more for a product that is environmentally safe.
African-American consumers watch 37% more television than any other consumer group. They are loyal fans to diverse movies and TV shows. In addition, 52% read magazines compared to 22% of general consumers, and spend 12 hours a week listening to radio compared to 6 hours of general consumers. However, only one to two billion U.S. dollars are spent annually on Black media, or about one percent of the total spend on digital, radio and print advertising. As avid users of social media, over 60% of African American millennials use Facebook at least once a day, compared to 53% of the general population. If you are seeking to gain traction within the African-American community, your brand will need multicultural experts to activate targeted media.
Sources: Pew Research Center, Nielsen, Media Post, Black Entrepreneur, The Atlantic