Retailers under-estimate affluent ethnic consumers

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By: Wise Marketer Staff |

Posted on February 12, 2007

When it comes to marketing and advertising campaigns and tactics, American affluent ethnic consumers are one of the most under served sectors of the population - but this can now be addressed, according to Diversity Affluence.

According to trend forecaster and marketing consultant, Andrea Hoffman, CEO for Diversity Affluence, by neglecting the American affluent ethnic consumers marketers are leaving billions of dollars on the table. One of the reasons for this is that, up until now, there has been little or no information on the sector.

Hoffman has created a new term, "Royaltons", to refer to this largely untapped segment of consumers. With an annual individual income of at least US$100,000 and a household income of at least US$200,000, the term Royaltons is derived from the word "royalty": a small but affluent group of influential people.

Largely ignored
According to a Diversity Affluence January 2007 report, Royaltons earning US$200,000-plus in household income have amassed US$110 billion dollars in purchasing power. "Smart marketers will benefit immeasurably from paying attention to these influential consumers, who have been patiently waiting to be engaged for years, and have been largely ignored by most marketers," says Hoffman. "Our research among this segment of Royaltons concludes that they have money to spend and are waiting for the smarter marketers to help them decide how and where to spend it."

Ethnic breakdown
Of the Royaltons in the US, 48% are Asian, 30% are Hispanic and 22% are African-American/Black. When these figures are applied to the total income of the group, some 52 billion dollars are in the hands of affluent Asian households, 33 billion dollars are in Hispanic households, and 24 billion dollars are in African-American/Black households.

Geographically, the Pacific and Middle Atlantic sectors of the country together account for more than half of all such income.

New report coming
Diversity Affluence is currently preparing a report on the results of focus groups with Royaltons held in Atlanta and New York. This will explore how African American Royaltons differ from the mass affluent in their tastes, buying habits, and marketing preferences.

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