Targeting The Buying Power Of Black America
Buying Power of Black America
By D.A. Barber.
The spending power of “Black America” is approaching a trillion dollars, making it the 16th largest market in the world and on the verge of surpassing the gross national income of Mexico, according a new report.
According to a monetary break down of the black consumer market, “The Buying Power of Black America” report notes that now may be a good time for businesses to “develop a strategy for increasing their share of the black American market.” As the nation recovers from the recession, “black consumers represent a margin of profitability in most consumer product categories.”
The 105-page report, based on U.S. Department of Commerce data, says black consumers spent $836 billion in 2011 on “clothing, entertainment, food, beverages, toys, consumer technology, cosmetics, autos, travel, and dozens of other categories.”
According to the report, “the top five categories showing an increase in spending between 2010 and 2011 were Appliances, $2.7billion (29 percent); Sports and Recreational Equipment, $850 million (28 percent); Personal and Professional Services, $5 billion (27 percent); Computers, $5 billion (21 percent); and Non-Alcoholic Beverages, $4.3billion (16 percent).”
But more telling was how and which companies were targeting these black consumers through advertising.
“The largest single investment that Corporate America makes in the Black community is in advertising,” said Ken Smikle, president of Target Market News and editor of the report. “That investment is about $2 billion a year, but it should be at least twice that amount given the importance of the market and the role these consumers play in any company’s bottom line.”
The report ranked the major companies by the dollars they spent on advertising in black media outlets and that ranking says something about how corporate America views the spending habits of black America: The No.1 company Procter & Gamble, spent $78.9 million in 2011, while the No.80 company, Apple, spent just $1.6 million.
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