U.S. Hispanics Will Reboot the Post-COVID Economy
As the U.S. begins to see the light at the end of the COVID tunnel, the focus will turn towards the post COVID economy and how brands can drive growth. Smart marketers have discovered that investing in a digital-first approach, targeting U.S. Hispanics, represents a viable engine for post-pandemic growth. This is what they know:
Hispanics Were Driving Growth Pre-COVID
Before the pandemic changed everything in early 2020, Hispanics were a critical growth driver of the U.S. economy. According to a report authored by California Lutheran University and summarized by CNBC:
- Consumption among U.S. Hispanics was growing 72% faster than non-U.S. Hispanics from 2010 – 2017.
- GDP among U.S. Hispanics increased to $2.3 trillion in 2017 up from $1.7 trillion in 2010, that’s the third-highest growth rate among all global economies – that’s faster than China and India according to Forbes.
- U.S. Hispanics accounted for 82% of the growth in labor-force participation between 2010 and 2017, despite accounting for less than 20% of the total population.
- Population growth among U.S. Hispanics has remained steady at around 2%, compared to less than 0.5% for the U.S. overall during the period 2011 – 2018.
U.S. Hispanic Consumers WIll Drive Post-COVID Growth
Unfortunately, COVID had a disproportionate, negative impact on the U.S. Hispanics community.
- Hispanics accounted for nearly a third of all COVID cases and were four times more likely to be hospitalized as non-Hispanic Whites.
- Unemployment rate hit 18.4% for Hispanics in June vs 14.4% overall. For Hispanics women, the gap was larger 20.5% vs. 16.9%.
- Vaccination rates among Hispanics are currently at 30.6% vs. 41% of White Americans .
That said, brands who engage the Hispanic community today and pay attention to hard data will see a clear opportunity to employ a digital-first approach to connecting with this segment to drive growth. Most importantly, U.S. Hispanics are hopeful about their post pandemic economic future and have accelerated their adoption of digital technologies – these facts coupled with the following Hispanic economic realities should be a clear call-to-action for marketers.
- Consumer Confidence: U.S. Hispanics are most likely to be “Recovery Optimists” according to a recent Nielsen study.
- Improving Employment: Recent data from the Bureau of Labor Statistics indicates that U.S. Hispanic unemployment has rebounded falling to 7.9% in April 2021. This is a significant improvement from the pandemic peak of over 18%.
- Increased Savings: 44% of Hispanics said they were able to save more, compared to 39% of all adults.
- Planning Major Purchases: 53% of U.S. Hispanics said they were able to make “major” purchases” vs. 43% of adults.
- Hispanic respondents say they are twice as likely to buy a new house in the next 12 months.
In a Post-COVID World, A Digital-First, Culturally Relevant Approach is Critical for Reaching Hispanics
Hispanic adoption of digital technology was booming pre-COVID and has only accelerated as a result of the pandemic. Recent studies by Univision found that Hispanics have not only embraced e-commerce during COVID but will continue to outpace non-Hispanics in online shopping afterward. 63% of Hispanics visited online stores during the pandemic, a jump from 47% pre-pandemic, and a solid 53% state that they will continue to shop online after the pandemic ends. Compare these figures to non-Hispanics where 40% shopped online before COVID, 56% during, and 48% plan to do so after COVID ends.
Just as Hispanics have accelerated their digital shopping behavior because of COVID, so too must brands be digital-first when engaging the Hispanic segment. To successfully engage, brands need to understand what is driving the growth in Hispanic online shopping adoption, what motivates them to buy online, and what categories are most popular among this group.
Larger Households: U.S. Hispanics on average have 3.3 people per household (vs. 2.4 in Non-Hispanic), which translates to larger online basket sizes as Hispanics are buying online for more people
- U.S. Hispanic households spend over $500,000 more than non-Hispanic white households over the course of their resident’s lifetimes
Key E-Commerce Motivators: Compared to Non-Hispanics, USHs are motivated to buy online to:
- Save Time – 58% USH vs. 52% Non-Hispanic
- Find Lower Prices – 53% USH vs. 47% Non-Hispanic
- Discover Unique Items – 22% USH vs. 17% Non-Hispanic
Core Categories: The most popular online purchase categories among Hispanic include Apparel, Food and Beverage, Cleaning, and Home Care. In addition, U.S. Hispanics are more likely to purchase subscription plans and direct to consumer brands vs non-Hispanic whites
The most successful brands will be cognizant of the data behind the Hispanic online opportunity, but will also leverage an insight-driven, culturally relevant approach. Understanding the digital implications of Hispanic household dynamics and the role of the Spanish language are examples of how brands can leverage cultural insights to win with this segment. For example:
Younger, English-preferring & bilingual USH are buying online for the household
- Nearly one third of USH consumers live in multigenerational households, with acculturated members acting as “Digital Sherpas” for older or Spanish-dominant family members.
- 50% of USH have made online purchases for family members and 78% have translated online content.
Spanish language advertising is a key factor in growing the segment
- 86% of USH appreciate brands and companies who advertise in Spanish.
- 70% of U.S. Hispanic agree that if an advertiser runs ads in Spanish it makes them more likely to visit their website, even if it’s only available in English.
Brands who understand these nuances for example would employ a multi-segment, multi-lingual approach to engaging with online Hispanics.
As we move to a new phase in the post-pandemic economy, with COVID seemingly in the rearview mirror, compelling data points to the Hispanic digital consumer as a clear opportunity for growth. Smart marketers will heed the call to action and invest in the Hispanic market to reboot the post-COVID economy.
Photo credit: Nenad Stojkovic/Flickr Creative Commons with overlay by Captura Group