Wealthy African Americans are a largely untapped and widely overlooked demographic despite having US$29.8 billion in purchasing power, according to results from a newly released study.
The paper, entitled 'Marketing to Affluent African Americans: Strategic Insights for Reaching an Untapped Market', is based on online interviews with affluent African Americans as well as a series of regional focus groups held in Atlanta, Chicago, Miami and Washington DC.
It features the results of insights on the behaviours, attitudes, opinions and spending patterns of affluent African Americans - defined as individuals earning at least US$75,000 annually. The paper was the result of a collaboration between Diversity Affluence and Uptown magazine.
Andrea Hoffman, CEO of Diversity Affluence, has coined the term "Royaltons" to refer to American affluent ethnic consumers. African American Royaltons (AARs) are a small but wealthy group of influential people who purchase items such as Rolex watches, luxury cars and who frequently travel internationally.
Hoffman also noted that the intelligence gathered from researching AARs will enable marketers to more effectively reach some of the most powerful and untapped consumers in today's marketplace.
Among the study's main results:
- Royaltons conduct extensive research on luxury items before they buy.
- Decisions influencing their purchase included tailored advertising, personalised service and event marketing at the retail level.
- AARs are aspirational, and focus on trading up to more luxurious brands.
- Fashion is an expected luxury and is equally important to both men and women.
- Men's fashion spending is focused on career and casual wear, while women spend money on purses and shoes.
According to Hoffman, "AARs are a compelling audience because they have money to spend, economic clout and word of mouth influence among their peers that could redefine social networking as we know it. Marketers must educate themselves about this demographics' needs, interests and economic significance."
However, she warned that marketers who rely on worn and dated marketing techniques, use the same celebrities or irrelevant print media images, and copy or incorporate a series of cliches as substitutes for more advanced forms of marketing will fail to make a lasting impression on AARs.
Hoffman also noted that the best way for luxury brands to determine where they stand in the marketplace with this constituency is to conduct a marketing audit to determine the extent of their existing relationship with the AARs or how to reach them. An audit, she added, can determine all the opportunities available to reach AARs and is another way to launch or expand a diversity initiative.
"Black is the new 'green', and any marketer who learns the nuances of this core group of consumers and the vehicles to properly reach them will have access to unlocking AARs' vast buying potential," Hoffman concluded. "This is especially true in these cost conscious times when every company is scrutinised and accountability takes centre stage."