A pandemic has upended your 2020 strategy, and you need to stay relevant with the consumers who will power your return to normal growth, regardless of how they are impacted today. These are the insights you need to resonate in response to the COVID-19 crisis and its aftermath. The document available for download provides an excerpt focused on Hispanic consumers. Fill out the form to download detailed insight into the top issues prime for brand activation in the near and midterm for all consumers by race and ethnicity.
COVID-19 has forced all of us to reconsider how we interact with the world.
The uncertainty about how the crisis will evolve and impact us – both as individuals and as a society – has left us without guiderails for how to plan for next month, let alone past 2020. No one can predict the future, but we must be ready for whatever comes next, whenever it comes.
We at Collage have done our best to assess this situation and provide you with answers to three key questions:
1. How will COVID-19 and the public response impact consumer spending?
2. What do consumers expect right now from brands, companies, and other organizations?
3. Which issues remain resonant for consumers beyond the pandemic?
Multicultural Consumer Expenditure Share Grew During the Great Recession
Make no mistake: economic downturns have the harshest personal impacts on the most vulnerable consumers. Peak unemployment rates during the Great Recession were much higher for Hispanic and Black consumers (13.1% and 16.8%, respectively) than for other segments. And with April 2020 national unemployment numbers already expected to be between 15 and 20 percent, we can expect these same segments – which are also more likely to be employed in services directly impacted by social distancing – to feel the brunt of the slowdown.
But despite these setbacks, the Great Recession did not reverse the general historical trend towards increased multicultural share of total consumer expenditures. The key ingredients here are fourfold: (1) younger consumers have higher future earnings potential overall; (2) rising education rates increase the rate at which their future earnings will grow (3) larger families require more spending, and (4) immigration is bolstering household formation, especially for the Asian segments.
These trends guarantee continued and increasing multicultural contribution to expenditure growth even under the dire economic impacts of COVID-19. While individual multicultural households are more likely to see greater price sensitivity in the short term, their growth fundamentals continue to improve.
Multicultural consumers will continue to represent an ever-growing share of your target markets. No consumer brand can afford to abandon any multicultural segment now, no matter what happens in the near term. Their loyalty will be 100% responsible for powering your return to normal growth in the recovery. It is in your immediate interest to let these consumers know you are on their side during these difficult times.
So how do you make that happen?
Multicultural Consumers Want Brands to Be Practical, Not Preachy
About 4 in 5 consumers believe that brands have a responsibility to step up in response to COVID-19. The need for action is especially urgent for multicultural segments, who are receiving news about the pandemic with increasing urgency and concern that others are not taking the situation as seriously as they should.
Underlying this urgency is the reality of immediate financial hardship and health risk. Black and Hispanic communities are more vulnerable both to the pandemic itself and the resulting economic downturn. Given these strains, it is not surprising that donating products and services to those in need and educating people about the need for social distancing are the most valuable things multicultural segments say companies can do in response to COVID-19.
And if you decide to put out messaging around COVID-19, you need to make sure it speaks to the lived realities of your audience. Feel-good messages will fall on deaf ears in communities that feel like their tragedies are not being taken seriously. There are plenty of organizations already on the ground listening and responding to these struggles – so make sure you are really listening before you try to respond as well.