Dive Brief:
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Thanks to both income growth and population growth, Hispanics of all ages in the U.S. will drive consumer spending beyond millennials’ influence by 2020, according to a research report from Morgan Stanley analysts, MarketWatch reports.
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Retail spending by Hispanic-Americans will rise by 1.6 percentage points by 2020, more than millennial spending growth of 0.6 percentage points and spending growth by 65-years-old-plus whites of 0.4 percentage points, according to the report.
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With a median age of 29, there are plenty of Hispanic millennials, for that matter: Some 60% are millennial-age or younger, according to Pew Research Center data cited by MarketWatch.
Dive Insight:
Hispanic-Americans live in every state, and are both upwardly mobile and mobile-first. The Census Bureau counted 55.4 million Hispanic-Americans in 2014, or 17.4% of the U.S. population, and they’re projected to number 106 million by 2050. Plus, according to the Morgan Stanley report, Hispanic-American wealth is also growing.
“The aging of the population and the rise of millennials will continue to impact the consumer landscape over the next five years,” reads the Morgan Stanley report. “However, the share of consumer wallet controlled by the Hispanic population will experience the fastest pace of growth, driven by the addition of 8.2 million people—or 52% of total U.S. population growth—and above-average per capita income growth.”
Some retailers have already taken notice. Perhaps most notably, Target has focused several marketing campaigns to reach Hispanic shoppers of baby products and other categories. And last year it launched an advertising campaign dubbed #SinTraducción (“without translation”) that the retailer’s SVP of marketing Rick Gomez told eMarketer “celebrates the untranslatable moments in our Hispanic guests’ lives.”
In addition, CVS Pharmacy last month expanded its Hispanic-focused “CVS y más” initiative, first launched in Miami last year, to nine Los Angeles-area stores.
Morgan Stanley states that other companies poised to benefit from growth among Hispanics include Burlington Stores and Ross Stores in the off-price retail sector as well as Apple in the tech sector.
