Remember the saying, “He who has the gold makes the rules?” There’s one market segment that’s making the rules now, yet few marketers and luxury brands seem to be aware of either the segment or the new rules. As a result, they fail to capture a meaningful portion of $110 billion in purchasing power from this vastly undetected and grossly under-served audience.
So who is this market segment that has the gold and is making new rules, and how can you adapt to and benefit from knowing their rules?
This rapidly expanding group is the Royaltons(TM)-affluent ethnic consumers, primarily composed of African Americans, Hispanic Americans, and Asian Americans. Although they represent a broad range of professions and careers, they all share universal traits, interests, and desires that make them an understandable, distinguishable, and powerful group. They have money to spend and are waiting for the smartest marketers to help them to decide where and how to spend their $110 billion. It’s an untapped market and uncluttered space for any brand or business-especially luxury brands such as BMW, Mercedes-Benz, Tiffany & Co., Chanel, Neiman Marcus and others-to stand out and capture significant market share.
Research shows that in the mid-Atlantic region alone (NY, NJ, and PA), there are over 235,275 individual Royalton’s over the age of sixteen who earn $100,000 or more and 83,753 households that earn $200,000 or more.
So how to capture this market? Progressive marketers and entrepreneurs will take three simple-yet powerful-steps to create brand loyalty among Royaltons(TM): 1) acknowledge them, 2) understand them, and 3) cater to them.
You’re familiar with personas, profiling, and identifying your target market to segment your customers and understand why they buy. This process separates and differentiates between men and women, young and old, conservative and liberal, etc. But why do so few identify ethnicities in their market segmentation process?
Don’t be afraid to separate black and white, Asian and Hispanic, and so forth in your marketing processes. Frankly, it’s no different than traditional marketing rules-it merely represents a heightened sensitivity to the fact that diverse ethnic groups want to be recognized and authentically paid attention to, just like seniors, teenagers, and women.
When done casually or haphazardly, diversity marketing fails miserably. This is not about “throwing a bone” to Hispanics just because their population is increasing, or being “sensitive” to African Americans because of history-it’s about deeply understanding and sincerely caring about who these diverse ethnic individuals are, how they think, why they buy, and what’s important to them.
In short, you need legitimate market research that provides genuine, detailed answers to these critical questions. No surprise here-you must understand Royaltons(TM) in order to reach them and benefit from them. The only surprise is why it’s taking most marketers so long to understand this simple fact.
A thorough marketing audit may also be in order for your company, which will help uncover latent opportunities and also pinpoint where you are vulnerable to your competition. Luxury brands who take on this challenge may be surprised to discover assets that they already have to leverage, assets that they have not yet seen because they simply haven’t had eyes to see.
As with any target group, never make the mistake of marketing to ethnic consumers from your perspective and asking them to come to you. Deliberately cater to them by getting on their turf, seeing through their eyes, and speaking their language. Don’t ask them to come to you-you go to them and serve them on their terms.
For example, partner up with membership-based ethnic organizations, utilize appropriate ethnicity-based publications in your advertising, hire a more diverse workforce and consider instituting a Diversity Advisory Board in your company. Build lasting and meaningful relationships with ethnic groups by getting outside of your own perspective and into theirs. Institute policies and procedures that transform your company culture into one that recognizes, appreciates, and serves diversity.
Affluent ethnic consumers-the Royaltons(TM)-are here, and they’re here to stay. They represent one of the most untapped opportunities in American business today. They have the gold and they’re making the rules. The only question is which luxury brands will choose to acknowledge, understand, and cater to them in order to garner a significant portion of their $110 billion in raw purchasing power.
Are you ready to lead this charge and make serious inroads into this dramatically under-served market? Or will you stand idly by while your competition serves ethnic consumers better and captures the market share that could have been yours? Gaining the trust and loyalty of Royaltons(TM) is the opportunity of a lifetime for luxury brands and marketers with the wisdom, foresight, and progressive culture to recognize it for what it is.
Hoffman is a marketing strategist, consultant, and founder of Diversity Affluence™, the authoritative voice of, and advocate for, the affluent ethnic consumer. As the first company of its kind, Diversity Affluence™ helps brands and businesses understand and market to a wide range of Royaltons™ (affluent ethnic consumers).