(ThyBlackMan.com) African Americans are a major force to be reckoned with in today’s economy, especially when it comes to how much they pour into it. Estimates put it at about 1 trillion dollars annually and perhaps more. Any business, regardless of the type, would be wise to find out what drives African American’s spending habits. And for any businesses that are not making the most out of catering to this segment of the population, they do so at their own economic peril. Blacks themselves must get beyond the misguided notion that we are primarily consumers of others goods and services; nothing could be farther from the truth, however, when African-Americans make money, we spend it. We don’t use it to invest or produce; as we should. With a buying power of nearly 1 trillion annually, if Blacks were a country, they’d be the 16th largest country in the world.
The business community must consciously understand the three things that propel African Americans and their spending habits. This information was published recently by the research arm of Terkat Consultants Inc; Stanley G Buford, President. Blacks make more shopping trips than all other demographics, but spend less money, on average per trip. Blacks in higher income groups, also spend 300 percent more with “high end” retail grocers more than any other high-income household. Savvy retailors must first ask, what is the nature of their purchases? Second, what is trending with them at any given time? And finally, what attracts them. We will get into them in the order just listed.
Actually, the nature of their purchases pretty much mirrors other ethnicities, with a few exceptions; those obviously being products or services that are geared specifically to African Americans. For example, the top purchase is food, which should come as no surprise as everyone has to eat. Next up on the list is apparel followed by health care and household furnishings. However, even those pale in comparison to the top category – housing. The civil rights era is largely responsible for gains in this area.
Perhaps just as important (if not more) is knowing what Blacks purchasing trends are. Obviously these change over time so it is wise to know what is popular and driving sales at any given point in time. One thing that the Terkat research data has found is that Blacks tend to overwhelmingly prefer purchasing products and services that are advertised in Black media.
African Americans who are in the Baby Boomer demographic spend significant time at stores and supermarkets, frequent fast food establishments and health clubs. They also prefer their sources of media to be by way of print and television over the internet. Not surprisingly, those in the Generation Y category chose game consoles, smart phones and Black radio stations as their primary form of media.
Now for what attracts African American buyers; well, it’s obvious from the previous stats that advertising in Black media helps. Also, African Americans tend to purchase from companies who feature Blacks in their advertising campaigns. Another thing to do is find out who is the most successful when it comes to attracting Blacks and their enormous purchasing power and taking cues from them.
African Americans are also attracted to companies and their products that have testimonials of happy African American customers who extol their virtues and recommend them to other people, black or otherwise. Businesses that contribute to and play a part in the black community are also found to be attractive to African Americans. Two of the biggest and most successful examples of this are Toyota and Procter & Gamble.
Staff Writer; Stanley G. Buford
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