Affluent Ethnic Consumers, a demographic nicknamed the "Royaltons" by marketing strategist Andrea Hoffman, still represent a largely untapped market in the US, representing more than US$110 billion in purchasing power each year.
This group is a marketing opportunity that is set to grow, and one which luxury automobile brands can't afford to ignore, according to a recent research report from Hoffman's consultancy, Diversity Affluence.
Baby boomers to whimper?
The simple reasoning behind Hoffman's assertion is that luxury automobile brands face a potential slowdown in demand as the baby boomer generation approaches the retirement age of 65 in ever-greater numbers. In fact, the leading edge of the baby boom (those born in 1945) will turn 65 in the year 2010 - a coming trend that could affect luxury brands as retired consumer spending begins to slow.
"As consumers enter their retirement years, their incomes normally decline as they move away from full-time employment," said Hoffman. The report, entitled 'Marketing Luxury Automobiles to Affluent Ethnic Consumers: Strategic Insights for Generating Sales', was published with this problem in mind, aiming to provide insights into the shopping and buying habits - and marketing preferences - of African American and Hispanic Royaltons, specifically.
The way forward
The report suggests that, given the potential decline in demand among general-market baby boomers starting in 2010, luxury automobile marketers should begin to step up their efforts to attract and retain affluent ethnic consumers.
"Brands in general believe that, by virtue of advertising to the masses, they are also reaching the Royalton segment. But, while this is true to some degree, it is not an effective approach," concluded Hoffman. Royaltons are defined by Diversity Affluence as African-American, Asian-American or Hispanic-American consumers with an annual income of US$100,000 or more, or a household income of US$200,000 or more.