By Ariel Solomon
- 58% of Black consumers have taken action as a result of a company’s actions or stance
- Last year Black spending power reached a record $1.6T
Black consumers want brands to keep the same energy around sociopolitical issues, if they want to capture a larger share of their money. With the combined spending of Black households outpacing the growth rate of white households over the past two decades, at 5% vs. 3% respectively, Black consumers are a growing force to be reckoned with. Critically however, these consumers have shown to be more likely to take action, 58% vs. 50% of the total market, either via speaking out against or becoming a patron of businesses based on their political, social, and/or environmental stances.
Why This Matters: In 2021, Black buying power reached a record $1.6 trillion, up from previous years and projected to increase annually. It is common knowledge that Black consumers are major mainstream trendsetters. Perhaps it’s less known that these very leaders of style often don’t feel well served or catered to, and as such are willing to shift their dollars elsewhere.
In fact, the size of that opportunity is nearly $300 billion as per a recent McKinsey study, which concludes that not only are Black consumers willing to shift to “companies that can better deliver what they need. They’ll even pay up to 1.2 times more on average for offerings that are better suited to their needs and preferences.”
There is evidence showing that Black consumers place a high level of intention and value on their purchases. This should serve as both an opportunity and a wake up call to businesses looking to capture the Black consumer. Company practices, minority representation, and sociopolitical stances matter.
Situational Awareness: While businesses typically look at minority and/or lower income communities as those which come with higher risks, the real risk for businesses that are not catering to the Black consumer is a massive missed revenue opportunity. Black consumers watch and take note of business actions which impact their purchasing decisions. It’ll be critical for businesses to keep their promises, exhibit presence amongst the Black community, and take a targeted approach to serving this demographic.
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