Hispanics are an important segment to win on beauty sales. Not only are these consumers driving key growth in beauty sales, they’re big and their spending power is growing—and should continue to do so into the future.
According to the U.S. Census Bureau, approximately 56 million Hispanics currently live in the U.S, accounting for 17.6% of the total population. With these numbers has also come a voracious spending power. Hispanic purchasing power in 2014 was $1.3 trillion, and that figure is expected to rise to $1.7 trillion in 2019, according to the Selig Center for Economic Growth. In addition, these consumers are young—with a median age of 27, compared with 42 for white non-Hispanics, 35 for Asian-Americans, and 32 for African-Americans—giving them more years of effective buying power.
A strong culture of beauty influences these consumers’ buying decisions. Looking good is essential for Latinos—both women and men. In fact, seven of Hispanics’ top 10 non-edibles consumer packaged goods categories come from the health and beauty department: fragrances, hair care, diapers, men’s toiletries, cosmetics, deodorant and sanitary protection. One category in particular where Hispanics are driving growth is cosmetics.
But this isn’t the full story.
Given this demographic’s large size, it shouldn’t come as a surprise that it’s made up of several distinct sub-segments. And just as Hispanics are not all the same, they do not all shop for the same things. They are motivated by different cultural mindsets and have different attitudes and beliefs towards beauty. Understanding what motivates them and affects their product and brand choices is essential for staying relevant and winning with these consumers.
In collaboration with Culturati, we’ve identified four key attitude-based segments within this demographic:
- Latinistas (culturally Hispanic). Traditional, one-third are second or third generation and more than half prefer to speak Spanish but can use English if needed.
- Heritage Keepers (bicultural). Progressive, but Hispanic-centered and focused on preserving their heritage. Most of them are first generation and prefer to speak in Spanish.
- Savvy Blenders (bicultural). Very progressive. Embrace diversity and are focused both on preserving their heritage and blending cultures. They are bilingual and their language preference is highly situational. Half of them are second generation, one-third are first generation and one-third are third generation of U.S. Hispanics.
- Ameri-Fans (culturally American). Progressive with a diluted Hispanic heritage and closest to the average mainstream consumer. The majority is second or third generation and prefers to speak in English.
All of these segments spend heavily on cosmetics. However, Savvy Blenders and Ameri-Fans are spending the most. What products they’re buying also differs. Savvy Blenders are most likely to buy lip cosmetics out of the four segments, while Latinistas and Heritage Keepers are more likely to buy ethnic beauty care than Savvy Blenders or Ameri-Fans.
As Hispanics adopt more progressive values, they become more sophisticated in their choices and use more specialty products. Savvy Blenders and Ameri-Fans are more likely to use multiple products than Latinistas or Heritage Keepers, seeing greater benefits from a combination of products with specific benefits versus a single multi-purpose product. These consumers are also more open to new product information and spend more time researching products before going to the store. This gives them additional tools to identify specialized products and learn about the benefits these provide.
By looking deeper at how Hispanic sub-segments are buying different products, marketers can identify opportunities to reach these different consumers. For example, by illustrating how using specialized facial cosmetics in tandem can help Latinistas and Heritage Keepers better achieve their desired outcome, marketers can create campaigns that truly reach these consumers. Digging deeper and understanding the drivers behind the behaviors present an opportunity for marketers to meaningfully connect with consumers to grow their business.
This new Nielsen-Culturati Hispanic Segmentation combines the power of Nielsen’s Homescan Expanded Hispanic Panel data with an in-depth understanding of Culturati’s attitudes and values-based U.S. Hispanic segmentation model. Nielsen’s Homescan Expanded Hispanic Panel captures household purchasing behavior across all outlets on a continuous basis from 10,000 English-preferred, bilingual and Spanish-preferred households. Spanish-preferred households are recruited door-to-door in eight U.S. markets, providing coverage of approximately 50% of the Spanish-speaking U.S. population. Culturati’s acculturation model leverages a rigorous methodology to add dimension to the bicultural space. The study used a two-phased qualitative and quantitative approach. The first phase was qualitative and consisted of 28 triads and 15 in-home ethnographies based in Chicago, LA and Miami. The second phase was quantitative and surveyed 1,077 Hispanic consumers in eight key Hispanic markets: Los Angeles, New York, Houston, Chicago, Miami, Dallas, Phoenix and Atlanta. This phase also included a general market benchmark of 200 consumers.