Canada is home to a diverse population, including dynamic LGBT (lesbian, gay, bisexual and transgender) communities across the country. And with that diversity comes a growing level of purchase prowess. In fact, despite this group’s small size, the LGBT consumer provides a big opportunity for both retailers and manufacturers.
Across Canada, self-identified LGBT households account for 6% of total households: representation is stronger in Quebec (8%) and British Columbia (7%); Ontario and the Maritimes are home to 5%, while representation in the Prairies comes in at 4%. LGBT households tend to be concentrated in the core of Canadian cities, as 46% call the urban centres their home - 18 percentage points higher than the total population.
The pink dollar, the term used to describe the purchasing power of LGBT spending, accounts for $3.8 billion in consumer packaged goods (CPG) sales across Canada. That translates to $5,400 per household annually, which is less than the $5,835 the average household spends. But hold on to your seats! While LGBT consumers may be spending slightly less than the average, they shop more often. In fact, they make 170 trips per year—10 more than the average Canadian household. That means marketers have many more opportunities to directly interact with a ready-to-spend consumer in a trip-declining industry.
Let’s take a closer look at household dynamics. Canadian LGBT households are smaller than the national average, with 51% being a one person household (vs. 29% nationally), and only 18% of homes having three or more members. Child-free households seem to set the family tone, as only 11% of them report to have children. Fewer member households only help to expand the buying power of a consumer that has more money to spend than the rest of us: Lesbian and gay households each have a higher percentage of consumers making more than $100,000 than the average population.
So where are LGBT spending their CPG dollars? Fifty-two percent is shopping in grocery stores, 13% in mass merchandisers, 12% in warehouse clubs and 9% in drug stores. Being digitally savvy, they spend 1.5 times more on online outlets than the average Canadian. Pet stores also benefit from the pink dollar, as the LGBT drop 21% more money here than the average consumer.
As for shopping habits, LGBT consumers are spending more than their straight counterparts on personal grooming categories like hair care, body care and shaving items. They are a more profitable consumer as they are less likely to shop on deal and use coupons; however lesbians are an exception to the rule, as they tend to cash in on couponing with twice the use as the Canadian norm.
LGBT consumers are early adopters of technology. They are more likely to own and smart TVs smartphones and tablets than the general population. And they want more. Over half (53%) would toss the plastic and let their smartphones become their wallets, almost double the 27% of the general population, while 60% would prefer their loyalty program cards to be accessed via an app on their smart phone, higher than 41% of the average Canadian.
Small but mighty, Canada's LGBT make up some small households with big spending power. With low deal sensitivity, high spending power and an unquenchable thirst for all things technology, the LGBT represent a powerful consumer, worth connecting with.
Based on a Nielsen survey conducted in January 2014 to 5,923 Canadian households, of which 305 were self-identified as LGBT.