Latinos are steadily helping to shape the landscape of America’s economy and have become a game changer for marketers. By 2020, Latinos will represent 35% of the total US population. Within this broad demographic lies a powerful core segment -- Upscale Latinos -- that accounts for nearly 40% of $1.5 trillion that Latinos spend today, and 29% of the Latino population. This spending power is increasing, as the number of Upscale Latinos is expected to grow from 15 million to an estimated 35 million by 2050.
Upscale Latinos, defined by HHIs upwards $100K, are thought to be the most influential segment since the Baby Boomers, and will drive shifts in category consideration, purchasing behaviors and brand relationships. Compared to non-Latinos in the same income bracket, this group tends to be younger (75% are under the age of 45), more tech-savvy, bigger users of mobile banking, have larger families and are more likely to be dual income earners.
They shop more than upscale non-Latinos.
- Are twice as likely to shop high-end and mid-level department stores and buy designer clothing or accessories
- Are 150% more likely to have purchased a computer, laptop or tablet in the last two months
- Outspend on health and beauty products
- Prefer name-brands
Their spending is focused on family. They place a higher value on paying for their children's education, viewing it as an investment. Helping support their elderly parents is of higher importance than for their upscale non-Latino counterparts.
They’re building the American Dream through entrepreneurism. With more than half having attended college, Upscale Latinos are more likely to own businesses than upscale non-Latinos, with Latinas leading the way. They’re generally selfmade, and tend to have strong emotional attachments to their business. They view it as more than a family enterprise -- it’s their legacy and their children’s inheritance. Yet, the next generation tends to see their business with a more practical eye and may be willing to either sell or expand it far beyond what their parents originally envisioned. Latino business owners are also reluctant to go into debt to grow their businesses. Many do not apply for credit for fear of being turned down. They often eschew business advice from professionals, preferring to get advice from other Latinos in the community.
Deeper pockets don’t translate to increased assimilation. Nearly all are fully bilingual and consume media both in English and Spanish almost equally. What’s interesting about language preference among this segment is that Spanish dominance is actually growing, a historic anomaly for immigrants in the U.S. From 2010 to 2012 language preference for Spanish over English among Upscales grew by 18 percent. Acculturation that merges the tradition of the Latino culture with American independence and ambition is at the core of the Latino middle-class and the growing ranks of the wealthy Latino community. Convergence has created a kind of transformation: From work hard to work smart; from modesty to toot your own horn; from stability to what’s next.
“Affluence cuts across acculturation, language, or life stage. This person could be an industrialist coming in from Argentina and landing his G4 in Miami...the guy walking into the bank in paint-splattered overalls who wants to cash a $400 check...or the woman who owns a string of beauty salons. They may not look or speak like the affluent, but they are. They may not have a college degree or an MBA, but their business needs are the same. They need access to capital. They need financial advice. They want to preserve and grow their wealth. They want to take care of their kids and provide for their education. They have all the same goals as everyone else, but this audience is not being well-served.” David Perez, CEO, Latin Force LLC
So what does this mean to marketers?
Upscale Latinos are putting their own spin on the American dream, and brands should help make it happen.
Sources: AHAA and Nielsen: The Voice of Hispanic Marketing (2013), AHAA and Nielsen: Upscale Latinos 2.0: A Renewed Outlook for High-End Marketers (2014), TRPI: Increasing Wealth in the Latino Community (2014), Census Bureau
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