Missed Opportunities in the African American Market

Black consumer
Black disposable income continues to grow

Nielsen’s recent analysis of African American consumer buying habits and trends highlights consumer opportunities for businesses. It also points out possible shortcomings on the part of marketers.

Produced in collaboration with the 72-year-old federation of 200 Black community newspapers, the National Newspaper Publishers Association (NNPA), this was the second of three annual installments of a report on Black buying power, consumer behavior and lifestyles. African Americans comprise “a consumer group which continues to experience population growth, has unique generational behavioral trends and characteristics and are still a viable market segment full of business opportunities,” according to the report.

Nielsen’s predictions were largely consistent with those made by the Selig Center in 2010 regarding African American consumers’ spending habits. Nielsen projects buying power of $1.1 trillion by 2015 compared to Selig’s forecast of $1.31 billion in 2017.

The Selig Center for Economic Growth produces reports and commissioned studies. Jeff Humphreys, its director and the report’s author, said African Americans had increased their buying power over the past decade by some 60 percent. The study forecast that minority markets would continue growing faster than the majority market, where buying power increased by 49 percent over the past decade.

Defining buying power as disposable income, or money available after taxes, Mr. Humphreys added, “the report provides businesses with a valuable planning tool for judging start-up or expansion opportunities and for tailoring advertising, products and media to individual market segments.”

Nielsen’s insights include analysis of advertising spend in Black media and percentages of Blacks believing Black media is more relevant to them as well as what Black households purchase and use. Age and family composition were broken down along with estimates of where people shop, how much time they spend in various outlets and media used.

Of those insights, perhaps the most significant is the relatively small amount spent on targeted advertising — only one percent of that spent on mainstream audiences — this “despite the fact that Blacks are more brand loyal, watch more TV and less time shifted (DVR) programming than any other demographic group.”


By; Bernice Hurst