TRANSLATED FROM LA PRENSA, May 19, 2014
May 19, 2014. Miami. EFEUSA.- According to a recent study released by AHAA and Nielsen, Hispanics with income above $50, 000 per year represent 40% of this minority’s buying power. They like luxury goods and quality products, particularly from those that approach them with a positive attitude.
The study “Upscale Latinos 2.0” is a joint project between AHAA and Nielsen with the goal of understanding the behavior and motivation of the Hispanic segment with an income between $50,000 and $100,000 (around 15 Million).
“We called those consumers with a higher buying power ‘upscale.’ It is a segment that is 27% of the Hispanic population, but that represents 40% of the buying power of all Hispanics,” said Carlos Santiago, Chair of the Research Committee at AHAA, in an interview with EFE agency.
This study follows another that was conducted for first time last year to define the characteristics and identify the Hispanics of this ‘upscale’ segment, clarified Santiago, who is also president of the consulting firm, Santiago Solutions Group.
With a sample of more than 9,000 households, the study sought to understand the motivations and consumption habits of this population toward products or brands considered “prestigious or luxury.”
According to the analysis, the profile of this consumer is young, U.S born, and bicultural. The researchers divided this ‘upscale’ segment into three kinds of consumers: “luxury seekers” (35%), “social seekers” (18%) and “sensible seekers” (47%).
The first group, “luxury seekers” consists of those who feel strongly attracted to luxury, feel good about themselves and are seeking rewards. The second group, “social seekers” are those who seek ‘refined’ luxury and seek social acceptance through it. The third group, “sensible seekers” are interested luxury items of value, and purchases them if they are convenient for them.
“The buyer of the first segment is looking for products or brands that lead to this level of recognition that has to do with their aspirational values. They do not do it to show-off, but as an individual wanting a reward. This is a very important segment for the market,” Santiago said.
He noted that upscale Hispanics are 24% more likely to buy luxury items, when compared to the non-Hispanic population with similar income. Also, 59% of this upscale Hispanic segment are the “Millennial” generation, who became adults with the coming of the new millennium; as opposed to 31% Millennials in the general market population. According to Santiago, this fact is very valuable information for brands because having young consumers allows them to establish a relationship of trust and loyalty that can last many years.
The study emphasizes an important aspect for any economy: consumers’ optimism, which is how confident they feel about their needs, their future or their jobs. According to this study, upscale Hispanics scored higher than non-Hispanics in their confidence index to questions like: having resources in the next twelve months to cover their food, income, living in a good neighborhood, accessing good education, having insurance, or paying credit cards.
“Whenever there is talk of the economy recovering, it needs consumer confidence. The higher the optimism, the higher the push to the economy. When people think their income is rising and progressing, they spend more and invest more, “Santiago emphasized.
According to this index, we see that upscale Hispanics feel secure vis-a-vis their economic responsibilities today, but they are also concerned about their future savings for both their retirement as well as higher education of their children.
“This upscale Hispanic is the type of consumer that every economy needs to grow. Without this optimism, others don’t move. There is not only the $500 billion dollars they spend, but the influence they have on others,” concluded Santiago.